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QUARTER 1 2017

Reflection: A tool you need How global politics can affect local business Improving your company culture Inside the engine room, after the holiday’s... Startup business

Consolidation: What to do when business is good

Give your business the boost it deserves

Innovative short-term finance facilities designed to help businesses and start-ups get ahead. Speak with our business finance specialists about a unique way to get more cash into your bank account, without disrupting present banking arrangements. Set up a standby facility now, and only incur fees when you use it. It’s as simple as 1-2-3. 1 Tell us what you need. We will visit you, and you tell us about your business and what you need: your industry, your turnover, your customers and your finance need. 2 We’ll present a non-obligation offer. If we can help, we’ll tell you how along with all applicable terms and charges. If we can not help, we’ll do our best to refer you to someone who can. 3 Set-up, grant access, and use. We’ll establish an on-demand standby finance facility for you to call on when you need it. If your circumstances change, we’ll change the facility to suit.

Our national Business Finance Specialists are available at all times, and are waiting for your call. Contact Fifo Capital today 0800 86 34 36


Covisory comprises four specialist businesses providing Accounting and Advisory services. We specialise in International and Domestic Tax Services, Trust Management, Succession Planning, Strategic and Business Planning, Accounting Services and Business Valuations. Established in 2007, Covisory has grown from one business to four with a diversity of clients. Covisory clients are owners of family businesses, operating both in New Zealand and globally. Our specialists work either one-on-one or alongside our clients’ team of professional advisers to develop appropriate short and long term solutions. We build strong relationships with our clients based around trust, accessibility, and responsiveness. There is no ‘one size fits all’ about our services. Our solutions are bespoke to each client, drawing on our up-to-date specialist knowledge and our years of experience. providing one-onone expert advice.

Welcome As we enter another New Year, there is often much consideration of what the year may bring personally, for the business, and economically overall with the economy. 2017 will mark an interesting year with the New Zealand political elections and the possibility of a softening or at least not as rapidly increasing property market.

There is also growing concern that shares and other investments are overpriced, particularly if interest rates are to increase in the future as we are starting to see in the US. People always have choices; choices about what to invest their money in, when to sell, and other significant matters that they need to choose from multiple options. However, we cannot forget history in making the decisions that we make today. Patterns or cycles repeat. For residential property in New Zealand you only need to think back to the property down turns of 1987, 1997, 2007 and the next one being‌ Talk of the new normal and a new financial world are immature and disrespectful of the past. History is a cruel teacher and one that often repeats its message. So whether 2017 will see a downturn, a flattening or an upturn will remain to be seen. But it is something that we all need to be weary of. At some stage share and investment markets will need to make some corrections, just like the property market will as well. The question is what will cause this, how severe it will be and how long it will last. We need to keep that in mind when we make our decisions for the current year.

This year Covisory celebrates its 10th anniversary. From small beginnings it has become a more diverse group offering a wide range of services to meet the needs of its clients. We have enjoyed the journey so far and look forward to seeing what the next 10 years brings as well. Whatever it may be, it is a journey that we look forward to continuing with you and we want to thank you for being part of our history and our future. Just like with investment and business decisions, we too have choices to make. We hope that the choices that we make are those that you need and that continue to meet your needs as we continue to evolve as people and as an organisation. Finally, we trust that you managed to have a good Christmas break and a chance to relax, recharge, and spend time with those that you love and care for as that is the reason why we all do what we do, to enjoy those out of work activities with those that are special and dear to us. So may 2017 be a good year for you, but may it be one that you control rather than letting it control you. Nigel Smith Covisory Partners Limited

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Reflection: A tool you need


How global politics can affect local business


Improving your company culture


Organising your marketing campaign


Inside the engine room, after the holiday’s... 11 5 tips to build motivation 14 Productivity hacks _



Questions to ask before franchising your business


Startup business 19 5 things start-ups shouldn’t waste their money on 21 Preventative care for your Business’ cashflow crises _



Consolidation: What to do when business is good


Published by Fifo Capital International Ltd. Headway magazine is published four times a year. Copyright © 2016 by Fifo Capital International Ltd. Email Visit All rights reserved.



Reflection: A tool you need With another 31st December rolling on by Covisory turned 10 years old. Over the holidays my youngest 20+ child quizzed me on whether I had any resolutions for 2017. This led to some interesting conversations on the concept of reflection.

I’m not one of those people who each year makes resolutions. I freely admit that the cynic in me watches to see how long the resolutions of others will last in the coming year. We all know the routine firstly you fall for the line that it’s a new year so you need to make resolutions. You start with good intentions but as life encroaches, those resolutions either drift off into the too hard basket or are just forgotten. These easy to make, on the spur of the moment, influenced by what is the latest trends are doomed to fail. Why? New Year Resolutions have on the most part no meaning. People expect to fail with them, there are no consequences on them if the result is not achieved. Making resolutions is not the problem it is the built-in expectation to fail. If we live our business and personal lives without reflecting on our past experiences, we are bound to make the same mistakes. We cannot break through barriers by doing more of the same. Not only must we invest in action we also should work on deep and sustained reflection on an ongoing basis and not just once a year. Reflecting will not solve all the problems but it will help move you a tiny bit closer. Let’s face it life is busy these days. We are all guilty of spending a lot of our time chasing the immediate reward, the near-term “goal” — in short, the expedient and the


convenient. We are all obsessed with doing. What we are not so good at is stopping and taking a hard look at Why and What we are doing. Reflection may be a tool talked about in education but there is little application when we move into the workforce. Why not – are we afraid of what we will find? If a business is not doing well it is easier to cast blame for problems on difficult customers or an investor. Alternatively, maybe we look to blame the government bodies regulating the industry, or competitors and who hasn’t blamed the computer or an application for our failures? We do not automatically ask in a situation what am I doing wrong or right? How could I improve? Our culture allows us to avoid personal responsibility – we are guilty of not owning problems or to finding ways to solve them. If we do not take time out of our week, month or year to make room for the deep questions and thinking we fail to grow. We opt for the distracting items that fill our time. It is not about working harder. We need to work smarter and this means having the time for reflection so that we can make changes and improve on past performance. Breakthroughs to a product, a company, a market or industry do not come from being busy and jumping between multiple tasks. Change comes from an opportunity to have

If we live our business and personal lives without reflecting on our past experiences, we are bound to make the same mistakes.

structured periods of reflection. We need time to ponder, to question, to model, and to research. Reflection drives experimentation and sparks innovation. By reviewing the processes and results we add to our understanding, gain insight and allow companies to respond to change. By taking the opportunity to reflect we can make our businesses radically better. In today’s culture, we as individuals and businesses are engineered to Do, we have not been encouraged to reflect. To add reflection to our lives allows us to embed concepts and theories into our practices. It fosters constant thought and innovation that provides the means to allow us to grow as both individuals and professionals. Within Covisory ‘Reflection’ is a core component of how we operate both internally and when we work with customers. If you need assistance, we are always happy to support you with this process. With a new year before us let 2017 be the year to not only learn from our experiences but regularly reflect on those experiences. I will leave you with the words of Margaret J. Wheatley an American writer and management consultant:

“Without reflection, we go blindly on our way, creating more unintended consequences, and failing to achieve anything useful.”

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How global politics can affect local business Re-emerging populism in the US and Europe is having a transformative effect on the West’s relationship with the rest of world small business. As a part of this shift, the global trade environment is showing signs of rapid change as well. Businesses need to track and adapt to these changes as they occur if they want to remain competitive in the global marketplace. Small businesses that operate internationally are especially vulnerable, because they’re global trade less likely to be able to afford the time, labour, and money needed to comply with new regulations or to overcome new trade barriers. Fortunately, it doesn’t all have to be bad news, since investors are unlikely to leave their assets lying dormant during turbulent times at home. Let’s examine a few of the ways that the changing political climate in Europe and America could affect businesses in the coming months and years.

Anti-Globalist trade policies Globalism is becoming a dirty word for right wing parties who explicitly championed globalisation just months ago. As “alt-right” movements gain power, more moderate politicians in their respective countries are increasingly bending to accommodate them. Newly ascended anti-globalist politicians as well as converted former moderates are promising to introduce new barriers to trade, including policies to discourage offshore production and foreign imports. This is done with the intention of bringing production jobs home, but it could have a devastating effect globally as both importer and exporter countries scramble to


adjust. Major manufacturing and export-based economies like China and Japan stand to lose an enormous portion of their markets, and it’s unclear if the US and EU would be able to develop the infrastructure they need to meet their own domestic demand. Though some countries like Australia and New Zealand comfortably avoided the global financial crisis, an economic downturn like this would be a serious blow considering that China, Japan, the EU, and the US make up most of both countries’ most important trading partners.

Fracturing trade agreements The Trans-Pacific Partnership is considered dead in the water, and TTIP is now also expected to fail. These two major agreements mark the stalling of what, up until now, was an unstoppable trend toward global market integration. Fortunately, these developments aren’t very likely to cause new problems for businesses, since these agreements were never put into effect in the first place. Unfortunately, existing agreements are also showing cracks. Donald Trump has pledged to scrap NAFTA, and a leaked memo suggests he intends to go through with it despite some verbal hedging in interviews since the US election. On the European side, Brexit is continuing to cause immense confusion as politicians bicker about what Britain’s new trade relationship with the EU should be. As this goes on, other eurosceptic movements in France, Austria, and the Netherlands are gaining ground. In all cases, raising barriers that separate previously interdependent

economies is likely to result in a massive recession and a spike in unemployment. These developments could have much more serious consequences for business owners at all corners of the world, and not just because they interfere with those countries’ ability to trade efficiently. Beyond their direct consequences, these crumbling trade structures are wreaking havoc on investor confidence.

Increasing market uncertainty This type of slowdown in trade could seriously affect sharemarkets

as investors become increasingly risk averse in the newly uncertain economic environment. Even before the Brexit vote, European investors began pulling out of the European market due to the overall lack of growth in the last decade. Moreover, governments might be forced to use quantitative easing to control interest rates in the event of a significant recession. Even managed inflation can harm investors, who will increasingly seek to protect their wealth by buying hard assets, or investing in economies with more stable currencies. Even though this would slow down global investment in general, those economies that are

likely to maintain better control of both their economies and their currencies stand to benefit from this.

Investors on the hunt Every crisis is also an opportunity, and the loss of investor confidence on one continent can mean more available capital elsewhere. Even as businesses will have to work around turbulent changes with some of their biggest trading partners, they may find themselves buoyed by foreign investment. This will make it somewhat easier to explore new markets, find new suppliers, and diversify your investments as needed. Business owners both big and small can look for ways to use this time of change to facilitate growth and become more resilient in the face of adversity. While the most significant changes in US and European trade policies are currently still just theoretical, business owners need to keep a watchful eye out, both to protect their businesses, and to seize opportunities when they come. Businesses that rely on economies that are likely to be directly affected may want to consider pre-emptive steps to help mitigate their risks. These might include diversifying your operations to a broader market, or setting up financial fall-backs to help tackle any cash flow interruptions.

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Improving your company culture


Building a great company culture is an incredibly difficult but vital part of any highly successful business. They’re so tricky because they require healthy interaction between workers and management, as well as between workers. Businesses don’t have direct control over how work relationships are built between individuals, so they have to set an example through policy to create a work environment that encourages a healthy and productive culture.

Don’t punish your most productive workers

Build many paths to success in your company

The top priority for any manager is to get things done. As a result, top performers can often end up being treated unfairly. The reward for a job well done is more work, and a lot of highly productive workers find themselves picking up the slack of their less effective co-workers. In many instances, managers will actively dump extra projects on their desks, knowing that they’ll be willing to stay late or come in on weekends to get the job done.

Traditionally, highly competent workers are rewarded with pay increases and promotions. Those are great tools, but they need to be applied in a way that makes sense. Many businesses, especially SMEs, only have one track for advancement, and that’s management. This is inherently problematic, because management is its own separate skill that has to be learned. A great engineer, writer, or sales executive isn’t inherently going to make a great manager, or even a moderately competent one.

While this is a natural strategy, it breeds resentment and encourages workers to do less than their best. This is especially true if high and low performers are about equally well recognised and compensated by the company. Good managers must balance these issues by working to improve the effectiveness of less productive workers, and by recognising and compensating the successes of star employees in a meaningful way.

To deal with this, businesses need a better reward and advancement structure. For example, you won’t benefit from your best engineer by putting them in a management position; you’ll only lose your best engineer and get an untrained manager. Instead, your best engineer should be tackling your most complex engineering problems and receive the title, recognition, and ... continued overpage

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compensation that they deserve while continuing to work under an appropriately credentialed and competent manager.

Allow employees to help shape policy As a company grows, it’s natural for it to take on a life of its own that exceeds the grip of just a business owner. Your business’ goals, strategy, and operation are mostly top-down affairs, but how the various organs of the business function and work with each other internally isn’t nearly as clear-cut. It can be immensely beneficial to collect employee feedback and implement their suggestions on things like working conditions, procedures, operating software, tool preferences, and more. These often relatively low-cost adjustments can significantly improve morale, because it gives workers some control over how they do their job. Since workers interact with these things all day, every day, even minor issues can develop into serious long-term annoyances. The trope of the rage-inducing


permanently malfunctioning printer from every office movie ever is an apt symbol of how much of an impact even relatively small issues can cause.

Don’t buy into gimmicks Trendy start-up giants like Uber and Buzzfeed are famous for their gimmicky employee perks, like games, slides instead of stairs, yoga break rooms, free snacks, and more. These benefits look fun and make for great marketing material, but they only work for these businesses because their underlying benefit systems are already robust. Smaller businesses seeking to emulate these ideas without providing much more expensive and significant traditional benefits won’t get far in improving morale. Having an arcade at work can be a fun perk, but it won’t mean anything to an employee that has to deal with inferior health insurance, low pay, expensive parking, day-care bills, and other serious issues that more traditional benefits packages often help employees with.

Allow employees to use your business A few of your employees might just be there to do their job, collect their paycheque, and go home. Most people, however, will be looking to grow and to develop their careers for the future. Some employers feel threatened by this, and actively try to discourage workers from growing and diversifying their skillsets too quickly to keep them there longer. This is likely to backfire. It’s better to encourage employees and even to provide support and assistance in networking them to ensure their future success. Though many will eventually move on, they’ll have a better attitude at work, and leave with a strongly positive opinion of your business. Former employees may well become valuable contacts with other related businesses, and will advocate for you with their future employers as well as other professionals who could be valuable to your operation.

Give your business the boost it deserves Innovative short-term finance facilities designed to help businesses and start-ups get ahead. Speak with our business finance specialists about a unique way to get more cash into your bank account, without disrupting present banking arrangements. Set up a standby facility now, and only incur fees when you use it. It’s as simple as 1-2-3.




Tell us what you need.

We’ll present a nonobligation offer.

Set-up, grant access, and use.

If we can help, we’ll tell you how along with all applicable terms and charges. If we can not help, we’ll do our best to refer you to someone who can.

We’ll establish an ondemand standby finance facility for you to call on when you need it. If your circumstances change, we’ll change the facility to suit.

We will visit you, and you tell us about your business and what you need: your industry, your turnover, your customers and your finance need.

Our national Business Finance Specialists are available at all times, and are waiting for your call. Contact Fifo Capital today. 0800 86 34 36

Organising your marketing campaign Many business owners view marketing as an opaque, more mysterious version of sales. They assume that you can hire a good marketer, put them to work, and wait for the leads to start rolling in. Unfortunately, it’s not that simple, because marketing and lead generation is, in many ways, about developing good rapport between your business and your market as a whole, rather than persuading individual leads. Building a marketing strategy that does this well takes time, research, and experimentation.

Getting your marketing campaign organised properly from the start ensures that you’ll be able to execute it properly as planned.


Organising an effective marketing campaign is tricky, and “effective” can’t always be defined simply as generating leads. Before you launch a marketing campaign for your business, it’s important to understand the different ways you can benefit from that campaign, and what to do to get the most out of your efforts and your investment.

Design a Strategy and Stick to It Marketing strategies can be as simple or as complex as you can imagine. Some small businesses get by with nothing but clever social media marketing, while others operate complex self-reinforcing strategies that integrate online tools like email marketing, social media, SEO, webinars, and PPC ads with traditional offline efforts like paper ads, industry conferences, and public events. Different businesses operate in vastly different environments, and every individual business needs to determine exactly what works for them. What doesn’t work, and what businesses often tend to do, is to try to determine that by adopting a constantly changing amorphous non-strategy. This is a big mistake. Marketing rarely translates directly to immediate increases in revenue, and changing your strategy on a weekly or monthly basis can make it very difficult to definitively determine what actually had an effect and what didn’t. Instead, it’s a good idea to work with a professional to design a campaign that targets specific metrics such as web traffic, call-backs, clicks, and conversions in a controlled manner. That way you can generate a relatively readable data set that you can analyse later to find patterns that relate to your marketing efforts.

Don’t rely on partial financing

Track results over time to gain insights

Whether you’re paying a marketing firm, internal marketing staff, or a contractor, it’s important to budget funds for the entire campaign from the start. It’s a common mistake for business owners to take out only a small loan or to invest a small amount of available capital into launching their marketing efforts, without planning for the future. They simply assume that the campaign will quickly raise revenues enough to become self-sustaining. While that’s technically possible, it’s very unlikely, and can cause serious cash flow issues that can interfere with an otherwise well-designed campaign’s long-term success.

Developing a productive longterm marketing strategy takes time, and often means analysing prior campaigns and making improvements. A few questions to ask might be:

Success in terms of lead generation is difficult to guarantee in any campaign, because so many different factors play a role in determining what will work for any given business. It’s often not going to be clear what social media platforms, which keywords, what kind of content, and what kinds of ads are going to be effective until you engage in some empirical research. In many ways, a regular marketing campaign doubles as market research, and needs to be funded on the assumption that it’ll take time to develop an effective customised approach. Before launching your campaign, talk with your financial representative about what your options are and determine the best way to move forward, whether that’s with a business loan to cover the entire project, or a financial contingency plan in the form of a business line of credit or a standby finance facility.

− What kind of content gets the most shares on social media? − Which social media platforms are referring the most traffic? − When did web traffic spike significantly, and was it related to any marketing efforts? − Are any keyword rankings improving? − Are those improved rankings resulting in increased traffic? − What kinds of emails are most effective, and which result in people requesting to be removed from your email list? Answering these and other related questions can help you isolate which specific efforts are most effective, and which aren’t worth continuing. Additionally, it can help you gain insights about your target market that can make it easier to develop new approaches that are more likely to be successful. After going through this process a few times, you’ll be able to generate the kind of return on investment that you need to grow your business in the long term. Getting your marketing campaign organised properly from the start ensures that you’ll be able to execute it properly as planned. Doing that, in turn, ensures that you’ll be able to receive a valuable return on your investment, whether that’s in satisfying the end goal of generating leads, or in providing critical insights that can be applied to improving future efforts.

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Inside the engine room, after the holiday’s....


5 tips to build motivation The hardest part of the holidays is always right afterward, when we have to get up early and drag ourselves back to our desks. Inexplicably, you might find yourself feeling even more stressed and less motivated than right before the holidays. Getting the energy together to tackle the day can feel like a problem that no amount of coffee can solve. Fortunately, there are a few tips and tricks that you can use to help you dive right in and grab the bull by the horns.


Get Organised

After some time away, it’s common to feel a little lost and not know where to start. Don’t just sit in front of your computer with a cup of coffee and hope that inspiration will strike. Instead, review what you were doing just before the holidays, and quickly scan through your emails. Write down a full list of what you need to check on, who you need to talk to, and what you need to do. Once that’s done, prioritise the list by urgency. With an organised list, you’ll have something to help you focus your attention, and keep you on track.


Talk to your co-workers

It can be hard to really put your nose to the grindstone right away. That’s not a big deal. Spending a bit of extra time by the coffee maker can actually be beneficial, because you need to take time to reconnect with your co-workers. Social interaction builds company culture, and in a healthy company your co-workers can be a powerful motivating force. Not only will it give you the opportunity to coordinate your efforts, it’ll help you to feel like an important and accountable part of the team. The sense that other people that you like and respect are relying on you adds meaning to your work, and helps to take the edge off your stress level.


Turn off your phone

Fresh memories of sleeping in late, relaxing, and sitting on a beach might be nice, but they can also make it hard to focus. To help manage this, it’s a good idea to limit other distractions that you have control over. First and foremost, that means turning off your smartphone while you’re at work. If you need to keep it on for work purposes, just uninstall your social media applications for a few weeks. ... continued overpage

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Doing this will help to make your unproductive periods during the day shorter, and reduce external interruptions throughout the day.


Get a passion project

If you’re seriously demotivated about work, the problem could be larger than just the holidays. Your job, and your career, isn’t something that happens to you, it’s something you do. If you’re committed to building up some meaningful steam, you’ll need to take a measure of control of your job to pursue something that matters to you personally. Your passion project doesn’t have to be grand and glamorous, and it doesn’t necessarily need to fit into your existing responsibilities. It just has to be relevant. Are you dissatisfied with existing procedures in your department? Offer to improve them! Do you want to see a healthier company culture? See if you can take on a formal role in making it happen! These kinds of responsibilities might put more work on your plate, but they’ll help you get out of bed in the morning with a spring in your step.



Punch out and go

If you’re having a hard time readjusting and becoming productive again, it can feel tempting to try to compensate for a lack of productivity by working late. This is not going to work, and it’ll only make you feel even more exhausted the next day. It’s important to take the time to recharge and build a healthy work/ life rhythm. It doesn’t matter if you had a comfortable balance before the holidays; even a few days off can make you feel disoriented and demotivated. To re-establish your equilibrium quickly, set a rigid schedule and stick to it religiously for at least a few weeks. That comfortable pattern will help you to compartmentalise so that you can more easily concentrate during work hours, and to relax at the end of the day. Not only can these tips make it easier to get back into work mode after some time off, they can help to improve your level of engagement all year around. There is no good reason to drag your feet through the work day when just a few changes can make all the difference between a stressful boring grind, and a meaningful and exciting career.

If you’re like us, then one New Year’s Resolution you make every year is finding new ways to be more productive.

Productivity hacks Being highly productive in an office environment is incredibly difficult. Because of this, office workers all over the world are constantly having to battle artificial distractions to get things done. Developing the skills and finding the tools you need to be productive is, in many ways, the key to success in our modern work environment.

1 Cluster your Tasks Don’t work off a simple to-do list. Instead, organise all your tasks into sensible clusters that are related or that should be done in a particular sequence. By doing this, you can organise a lot of individual tasks into a few larger projects. By tackling those projects one at a time youcan ensure that you’re not forced to constantly switch between unrelated tasks. Additionally, this helps you to prioritise finishing related tasks together, so that you don’t end up with a whole list of unfinished projects, instead of 4 completed ones and one unfinished.

2 Build a Timetable Schedule everything out in your calendar every day, and follow your schedule very closely. Include even relatively small tasks, and even non-work activities like ... continued overpage

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coffee breaks or breaks to check social media and respond to text messages. By assigning everything its own time, you can dampen your own internal need to check your phone every time it chimes. Furthermore, your timetable will relentlessly keep you on task.


This is especially important if you, like many modern workers, are always fighting a never-ending email inbox. Your schedule will help to ensure that you spend the bulk of your time on your most important tasks, so you don’t accidentally lose an entire day trying to combat a swarm of minor issues that happened to be at the top of your list while critical tasks go unfinished.

3 Shorten Meetings Very few meetings actually require the full hour for which they’re usually scheduled. Meetings tend to be dull and long-winded in large part because of this excessively large amount of allotted time. There is no reason to spend an hour relaying information that can be

Briefly... summarised in 300 words worth of meeting minutes. Getting rid of these unnecessarily long meetings can save an enormous amount of valuable time. Experiment with shrinking the length of your meetings as much as possible. Group communication should be relatively direct and concise, and making this happen has some important benefits. A meeting that only takes 10 or 15 minutes is short enough to hold the full attention of attendees for the entire duration. Moreover, the meeting will take up less of their available work hours, ensuring that they can take the time to think about, offer feedback on, and act on what was discussed.

4 Control interruptions as much as possible Successfully eliminating interruptions at work is about more than just logging off Facebook. Extraneous noise, colleagues with questions, phone calls, emails, and sudden coffee cravings can all strike at any time. The most important method for managing all kinds of interruptions is establishing a routine for not just when you do certain tasks, but when you’ll interact with other people and media. Dedicate a portion of your day to uninterrupted work, and during that time don’t open your email, don’t respond to calls, don’t get up from your desk, and ask colleagues with other issues to come back later. This way you can redirect common interruptions to the times before or after that high-intensity work time. Being highly predictable is important because it makes it easier for other people to know when you’re going to be unavailable.

5 Clean your work environment Your physical environment affects how you think. A cluttered and dirty workspace can make it more difficult to focus. Keeping surfaces clear and getting rid of fidgety gadgets on your desk helps to keep your attention to your work, and makes it easier to keep your thoughts organised. This also applies to your computer’s desktop. Resist the urge to slowly clutter your desktop up with hundreds of random files and folders. Regularly purge old junk, and organise what’s left in a way that’s easy to navigate visually. You’ll notice the difference immediately. Making yourself highly productive at work is all about very carefully managing your time and your focus. Doing this effectively means getting more work done in less time, without being forced to exhaust yourself fighting constant distractions. You’ll free up valuable time and energy that you can use to develop yourself professionally, or advance your career. Most importantly of all, it’ll make it that much easier to manage work stress, so you’ll be able to more easily stay on top of other distractions and inefficiencies in the future.

Organise tasks into sensible clusters that should be done in a particular sequence. Schedule everything in your calendar, and follow your schedule very closely.

Experiment with shrinking the length of your meetings, it will make you more productive.

Dedicate a portion of your day to completely uninterrupted work.

Inside the engine room, after the holiday’s

Questions to ask before franchising your business Business franchising is a global success story for business owners and investors alike.

Of course, franchising isn’t ideal for every industry or every type business. If you’re thinking about becoming a franchisor yourself, there are a couple of important questions you’ll want to answer first. These will help you determine whether this business model is the right choice for you, and what kinds of challenges you’ll face in building your franchise program.

Can you afford the initial investment? Franchising is very cost effective in general, but becoming a franchisor still requires quite a bit of groundwork and investment. You’ll need guidelines and procedures explaining how franchises should operate, legal paperwork, a training program for new partners, possibly a department with dedicated staff to


help manage franchisees, and a way to market your new franchise system to possible investors. If you aren’t adequately prepared to cover these costs, your core business could suffer from dangerous cash flow interruptions. If your business is doing very well you might be able to simply budget for it, otherwise you’ll need to get access to financing. Whatever the case, it’s important to keep control of your budget so that you can prioritise the success of your primary business, because that is the engine that makes all future growth possible.

Is your business marketable? As a business owner, you spend a lot of time marketing and selling your products to your prospective customers. As a franchisor, that product is going to be your business itself. To be successful, you’ll need to attract investors who are willing to not only invest in your business, but to effectively buy into your industry. Your business will need to convey

Franchising is a clever business model that allows businesses to expand rapidly, because they don’t need to front the capital that they’d usually invest in each new location in order to grow. It’s a naturally symbiotic relationship, where franchisees benefit from the experience, brand, and structure of the franchisor, and the franchisor benefits from the franchisee’s investment.

a sense of being an interesting, challenging, and most of all a rewarding place to be in order to engage with your target audience. Even investors who are impressed by your business may still be resistant to taking the plunge if they feel that running a franchise is going to be too complicated, too risky, or too time consuming for them to manage successfully. In the end, you’ll need to determine for yourself whether and how you can develop a marketing strategy that will attract the investors you need to make your franchising program a success.

How much revenue will your franchisees generate? Once you have an idea of what you’re going to spend on setting up your franchising program, and whether you can market it, it’s time to consider what it’ll take to recoup your investment. Every business is different, so you’ll need to determine how much revenue you can expect

your franchises to generate for you annually. Once you have a figure, you can calculate how many franchises you’ll need to open in order to recover your investment in a set amount of time. Depending on your business, you might be able to make a profit with just one, but industries with narrower profit margins may need to attract many franchise investors just to pay for the franchising infrastructure itself.

How accessible is your industry to franchisees? Getting a franchisee to sign on the dotted line is only the beginning of the journey. Your franchisees are going to represent your brand to the world, and it’s critical that their work lives up to your reputation. To ensure their success, it’s important that your industry is accessible enough that someone without a lot of industry experience will be able to operate it successfully.

The best kinds of franchise opportunities need to be able to bring a return on investment for the franchisee and the parent company without forcing franchisees to spend months or years struggling with a steep learning curve. New franchisees are typically not experienced as entrepreneurs, and usually haven’t spent time working in their franchise’s industry before. If a new franchise can’t get its head above water quickly enough, it might well close down without ever generating any significant amount of revenue. Additionally, its failure would reflect badly on the franchisor, and discourage other potential investors. If any of these issues are a concern for you, don’t be discouraged. Few businesses are completely ideal for franchising, and seeing a bump in the road doesn’t mean that you have to abandon your dreams of building a successful program. Rather, you can use that information to build your program in a way that explicitly addresses any weaknesses.

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Startup business 5 things start-ups shouldn’t waste their money on Entrepreneurs have to work hard to secure the investment and financing they need to start their ventures. Start-up budgets are inherently tight. Every penny you spend in the wrong place is a penny that could have been useful somewhere else. Because of this, it’s critical for entrepreneurs to carefully analyse what they’re spending their money on, and whether they’ll get the long-term value they need from every purchase.



Cookie Cutter Online Marketing

A business isn’t much of anything if it doesn’t have customers. It’s completely justifiable to pour a lot of resources into getting your business’ name out and generating leads. Unfortunately, most entrepreneurs aren’t marketers themselves, and won’t go out of their way to employ a professional who can help them develop a personalised and comprehensive marketing strategy. Instead, they’ll hire one of the many marketing companies that offer conveniently simple cookie cutter online marketing packages. Any marketing company that doesn’t want to consult with you about your business, your goals, and your target audience before offering possible solutions is a waste of money. Every business is unique, and marketing campaigns that don’t take your business’ specific needs into account are unlikely to yield results


Inexperienced workers in over their heads

Start-ups generally can’t afford to pay premium wages, and that often means hiring a lot of entry-level workers. While that might be a great idea for some positions, it can be a big mistake in other cases. People who are trying to acclimate to both your business and their profession at the same time are bound to make significant mistakes. This is particularly bad for start-ups, because it will increase your client turnover rate, and contribute to establishing a negative reputation before you’ve even come out of the gate. Moreover, you’ll be forced to spend additional time and money in training these workers, which can

interfere with the work of the person doing the training. Consequently, you’ll have to spend more on sales and marketing, making the entire organisation less efficient. You’ll need a core of reasonably seasoned and highly competent employees to ensure consistent quality, to build reliable and smooth procedures, and to help establish a healthy company culture. It’s worth it to start smaller if it means producing higher quality work, and building a great reputation right from the start.


Scaling Issues

Entrepreneurs don’t go into business with small, measured dreams. Unfortunately, that often translates to overconfidence, and premature attempts to scale their business up. Start-ups who hire employees that they can’t put to work, buy equipment they don’t need, and rent office space they have no use for are wasting resources that could be spent on actually growing their business. By investing in production capacity before finding ways to generate demand, businesses can actually impair their growth. It’s critical for any business on a limited budget to manage their growth strategically, so that every step is self-sustaining, and drives the entire venture forward.


Unnecessary and Expensive Software

CRM or ERP software are tools that are designed to allow businesses to more effectively collect, store, and analyse mass amounts of data. These tools are extremely useful for large enterprises that are juggling complex multifaceted projects for a large number of different clients in a large

and complex organisation. Start-ups often purchase these in an attempt to emulate industry leaders, but this is nearly always a mistake. Start-ups haven’t had time to grow to a large size, bring on a wide and varied customer base, or diversify their services into a large and complex system. Expensive software shouldn’t be necessary at this stage, and might even make life more difficult for a relatively small team.


Image and Social Status

Many entrepreneurs look up to and want to emulate highly successful start-ups that they know of by offering unique amenities to employees, setting up shop in a beautiful central location, and trying to associate their brand with the “start up culture” of Google, Uber, Facebook etc... What they don’t often consider is that many of those same businesses had relatively humble beginnings. Your business’ projected social status doesn’t mean much before you’ve even had time to develop a professional reputation based on your work. By avoiding expenditures that only make your business look successful on the outside, entrepreneurs can ensure that they have more funds to deal with shortfalls and cash flow interruptions. This can help to build that all-important professional reputation. Don’t let useless expenditures eat into your budget. Identifying and avoiding these problem items does more than just help to keep costs down. Carefully analysing them can help you define more clearly what you do need to invest in to ensure that your start up achieves that ultimate long-term success.

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Preventative care for your Business’ cashflow crises Budgets are tricky to manage because costs can get out of control surprisingly quickly. That’s often because we don’t budget for just how expensive problems that might appear relatively minor at first can turn out be. Setbacks don’t normally happen one at a time. One problem often creates several more, eventually cascading into a mess that can break a wellplanned budget entirely.

For example, a late payment by a client might disrupt your cash flow enough to cause purchasing delays that prevent progress on multiple other projects. That, in turn, could put pressure on workers and clients, which can result in even more complications. The key to avoiding these kinds of problems is thinking ahead, and taking preventive measures that can protect you from cascading effects.

Identify critical areas In order to prevent this kind of ripple effect, it’s important to identify specific bottlenecks that can’t be allowed to suffer due to cash flow problems. Those could be just about anything depending on your industry and specific business, but a few examples might be… • Critical resource purchases • Wages • Large irregular expenses • Utility and Tool Maintenance Fees. These costs need to be prioritised and tracked very carefully, because they are critical in facilitating the success of everything else your business does. By tracking and being fully aware of their status as critical factors, you’ll be able to discern exactly when you need to take extraordinary measures to deal with a cash flow disruption in order to avoid a more serious problem.


Plan ahead to accommodate cash flow problems Conventional wisdom and home economics would dictate that you should simply save some money for a rainy day, but that doesn’t necessarily apply to your business. Not only would it often be difficult or impossible to get extra funds for this purpose, small businesses also need to use any liquid capital they have to react to growth opportunities and improve their services in order to compete. Taking these risks is a critical part of sustaining healthy growth. The right way to plan ahead for this kind of issue isn’t about holding on to liquid capital, but rather about setting up financing options ahead of time that can alleviate financial stress when necessary. The most important issue with doing this is ensuring that you can get access to those funds immediately when you need it. A business loan won’t be of much use if you have to wait a month to get access to the funds. Because of this, it’s particularly important to build a personal one to one relationship with a financial institution that’ll work with you to get you the right kind of financing. Get the right kind of financing Unlike larger institutions, Fifo Capital specialises in relationship-based financing for small and medium sized

Communicate your position…

Sharing critical information pertaining to credit and risk with your financiers and shareholders in a timely manner, will help you prevent avoidable unnecessary exposure and risk to your business.

businesses and always provides a 24-hour turnaround on applications for all our financing services. That is, in part, what makes us such a great option for dealing with these kinds of problems. There are a variety of different options that might be right for you, and our representatives work with you to really understand your business so that you get access to the best financing options for your particular situation. Some common solutions would include… Invoice financing If you’re dealing with client payment issues, a great way to nip it in the bud is to use invoice financing. Using this service, you’ll simply sell an invoice to your financial institution for most of its value. You’ll get your

money immediately, and the financial institution collects the payment from the client at the time that it’s due. This kind of financing is secured against the invoice itself, so you don’t have to tie down any other assets. Business loans Business loans are a great option when you need a more significant amount of money in short order. Like with all financing options, you’ll get access to your funds quickly, however these types of loans are typically secured. That means you’ll need to be able to provide invoices, stock, or some other kind of collateral. Standby facilities In terms of planning ahead, standby finance facilities are a perfect

option for any small business. Standby facilities are loans that are negotiated whenever you like, and then held in reserve. You can take the time to do your research and negotiate the loan from a position of strength, instead of doing so when you’re under a major time crunch. After it’s set up, you don’t have to ever draw on the funds unless you actually need them, and aren’t responsible for any interest payments on that loan unless you actually make use of it. Preventing a budget crisis is all about understanding your business, building a great relationship with your financial institution, and planning ahead to deal with those cash flow crises before they have a chance to wreak havoc on your operation.

Startup business


What to do when business is good


Your quarterly earnings look good, all your bills are paid, and client turnover is stable. Your business looks good. Nevertheless, you have the feeling that you might be forgetting something… This instinct is healthy. Business is inherently dynamic, and it’s not a good idea to assume that things are going to stay the way they are, just because they appear sustainable right now. Allowing yourself to become complacent can not only impair your business’ growth, it can also leave you vulnerable to serious setbacks in the future. When things are going well, and you get a chance to breathe, it’s important to use the opportunity to challenge your business to help strengthen it for the future. Of course, it’s also important to be strategic about where you focus your efforts. Simply always driving sales and growth no matter what, isn’t the answer. Instead, you’ll need to critically examine your organisation, and develop strategies to facilitate healthy development and growth.

Find your weak points Smaller businesses spend much of their time, especially while they’re still in their start-up phase, focusing on staying in budget and finding the leads they need to survive. This can force your business to develop (or not develop) in ways that you never intended, and that could leave you vulnerable in the future. To find those weak points, you’ll need to examine your business and ask yourself what you are currently relying on, and whether you’d be able to cope with the loss of those critical factors. Some likely weak points might be… Lack of skill redundancy Many SMEs have a few irreplaceable workers. They know exactly what they’re doing,

and seem to magically make problems disappear. Having highly specialised workers can be a good thing, but it’s not safe to rely on any single person too heavily, especially if no one else really understands how their job works. If this person decides to move on, you might not be able to adequately train a replacement in the time you have, or you might not have the expertise to train that replacement at all. Irreplaceable equipment Do you have a tool that you rely on to operate your business? What happens if it breaks? In many industries, critical equipment is going to be far too expensive to replace out of pocket, and you’ll need to ensure that you have the financial resources needed to cover repairs or replacements. Special reliance on one client Start-ups often grow explosively in stages, but those bursts can be a double-edged sword. If you land a huge new client that forces you to hire more employees, purchase more equipment, and rent additional space, you are going to be reliant on that client in the future. You’ll most likely need to take out a business loan to accommodate the sudden growth, and you’ll need that client’s revenue to service the debt. Focus on Developing Resilience Once you’ve identified where your vulnerabilities are, it’s time to start consolidating and making changes that’ll make your business more durable and more tolerant to future risk. As a result, you’ll be able to tackle bigger challenges and grow more aggressively in the future. Get financial protection Preventing cash flow problems is a familiar and ever-present issue. Fortunately you’ll be able to do something about it pre-emptively if you’ve done a good job at identifying weak spots in your

business. Insurance can protect equipment, and lines of credit, standby loans, and other financing tools can help you cover other unexpected costs to minimise interruptions. Develop your workforce Employees that understand their jobs are good, but employees that understand their co-workers’ jobs are better. Ensuring that employees are somewhat crosstrained and familiar with how their own work fits into the grand scheme of things ensures a more competent and integrated work environment. As a result, it’ll be easier to deal with the loss of an employee and to up-train a new worker without throwing an entire department into chaos. Diversify Avoid relying on individual clients, suppliers, or merchants too much. Whenever possible, seek out a broad range of people and businesses to work with. While it’s simpler to work with fewer businesses and customers, diversification protects you from becoming dependent on someone else’s success.

When to grow The act of addressing these vulnerabilities to build a more resilient organisation can often drive growth all on its own. For example, diversifying your client base by definition entails going out and acquiring new customers. However, at that stage, you aren’t ready to sustainably pursue growth for its own sake. You’re really ready to grow after you’ve successfully consolidated your business. By ensuring that your core business is resilient, you’ve built a solid platform from which to drive expansion. You’ll be able to take bigger risks and grow faster knowing that your business is built on a solid foundation.

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It’s time you dealt with the decision maker Fifo Capital’s business partners aren’t your typical finance people. We know business can be hard enough without having tough conversations with conventional types following rigid approaches. We’re more like friendly colleagues who champion your success. Or the confidant you call to help guide you through any situation. You can talk straight with us knowing you’re in a safe zone. And the person you talk to is a decision maker, so you’ll get answers fast. When you’re ready to experience a caring and efficient approach to business finance, talk to Fifo Capital. We’re good listeners armed with modern tools for success.

Contact Fifo Capital today for more information. 0800 86 34 36

advising on better business Covisory Partners offers expert external reviews of business processes with the explicit aim of improving performance. We work with you to review your company’s operational systems to identify where change, enhancements, or smarter operations could positively affect the bottom line. We help you to work smarter.

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Covisory Connect Q1, 2017  

Our group eMagazine “CONNECT” is here to provide you with thought provoking and enlightening articles, relevant industry news and informatio...

Covisory Connect Q1, 2017  

Our group eMagazine “CONNECT” is here to provide you with thought provoking and enlightening articles, relevant industry news and informatio...

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