The Profit- February 2016

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INSPIRING BUSINESS IN HAWKE'S BAY

FEBRUARY – APRIL 2016

THE

Triumphant Success Pitsch Leiser on building cultural capital in HB

CHILD’S BUSINESS

Childcare – a boom sector

ALL BLACK ‘N’ WHITE

AB’s social media guru a Bay man

CAREER CHANGES

Changing trends in modern times

OUR EXPERTS

Business advice & viewpoints


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CONTENTS INSPIRING BUSINESS IN HAWKE'S BAY

FEBRUARY – APRIL 2016

THE

Triumphant Success Pitsch Leiser on building cultural capital in HB

PRO FEATURES 6-7 10-11 14-17 20-21 22 24-27

The Changing Employment World Meet the Bay’s based All Black Digital Media Expert The Business of Childcare Homes on the Move Solar Pump goes Global HB Events lift Economy

Childcare – a boom sector

ALL BLACK ‘N WHITE

AB’s social media guru a Bay man

CAREER CHANGES

changing trends in modern times

OUR EXPERTS

business advice & viewpoints

Cover photo by Tim Whittaker www.tim.co.nz

PRO PRIMARY 28-29 32-33 34-35 36-37

CHILDS BUSINESS

Horse of the Year - a new start Harvesting Trees in Hawke’s Bay Mānuka Liquid Gold Performance highs at Napier Port

PRO EXPERTS 38 41 42 43 44 45 46 47 48

Pro Primary by Brent Paterson Pro Finance by Tobias Taylor Pro RMA by Cameron Drury Pro IT by Wray Wilson Pro Education by EIT Pro HR by Kimberly McKay Pro Legal by Edward Bostock Pro Property by Paul Harvey Pro Business by Cedric Knowles

14-17

PRO REGULARS 4-5 9

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EDITORIAL

What has become of the HB Chamber of Commerce? I was shocked to see that only about 150 people attended the Hawke’s Bay Business Awards gala dinner. This used to be the largest celebration for the business community, and at one stage over 650 people attended the event. The awareness of the awards is at its lowest level. The Profit didn’t receive any media releases about the awards and during the week of the gala dinner I had a conversation with another media source who didn’t know when the event was on. It got me thinking about the relevance and importance of the Chamber and how effective it is compared to other chambers and other business networks. But first a bit of history. The International Chamber of Commerce was formed in 1919 to bring economic prosperity to a world that was still reeling from the devastation of World War I. In NZ there are 29 Chambers divided into four hubs – Northern, Central, Canterbury and Southern. The national chamber website says there are over 22,000 active members. Locally the Chamber goes back even further with the Napier Chamber established in 1883 and Hastings in 1907. They merged in 1993. The chamber’s role is to support and encourage business growth by positively influencing the environment in which businesses operate, by providing training, advice, information and support.

Editor Damon Harvey damon@theprofit.co.nz

It also acts as a voice and advocate on business matters as well as providing a range of

opportunities, products, services and savings to members. So does the Hawke’s Bay Chamber provide all of the above? The short answer is yes – but is it effective? The business that publishes The Profit, Attn! marketing pr, became a member when we set up the business. It helped establish our business. We attended many Chamber after five networking events and we briefed the Chamber on many business initiatives on behalf of our clients. We also provided marketing and event management services to the Chamber for a number of years, so got to know the organisation very well. We worked closely with the two former ceos Richard Heath and Murray Douglas. They were very different in their approach but they were real champions of local business and strongly raised issues that impacted the business community. Murray had a high profile and was instrumental in setting up Business Hawke’s Bay, a business expo and the Napier Port Business Hall of Fame. Since his departure, the Chamber, in my opinion, has lost its punch. Over summer I had several conversations with other business owners who had a similar view. They no longer see value in being a member.# Examples of its demise is the poor entry levels for the awards and low turnout at the gala dinner; a newsletter that lacks any valuable business information; fewer workshops and seminars and I suspect a

falling membership. So, how does the Chamber remain relevant in todays environment as it faces stiff competition from the very organisation it helped set up – Business Hawke’s Bay, as well as organisations like BNI, HB Young Professionals and online networks such as LinkedIn. An interesting observation is the growth of members in the Havelock North Business Association, many from Hastings. My view is that we still need a very strong Chamber. But it needs to redefine itself and go to its current and former members and ask how it can help grow their business as well as contribute to the overall vitality of the business community. It needs to take charge of issues that are impacting on businesses; resurrect the Business Hall of Fame, so we can celebrate leaders that have contributed significantly; overhaul the business awards and create a calendar of worthy events. It’s time for the Chamber to be refreshed and to distinguish itself from others now in the same space. It’s got history, reputation and an international brand to leverage off. It will be interesting to see how the Chamber responds to this opinion. I’m also keen to hear the views from others in the business community. Email me at damon@theprofit.co.nz #We canceled our membership of the Chamber in 2015 based on the issues highlighted in the article. We have not been contacted and asked why we canceled our membership.

EDITOR/PUBLISHER: Damon Harvey 06 878 3196, 021 2886 772, damon@theprofit.co.nz, Twitter – @profithb

THE PROFIT is independently owned by Attn! Marketing PR and is published four times a year. Copyright ©2012: ATTN! Marketing PR

CONTRIBUTORS: Sarah Thornton, Vivienne Haldane, Wray Wilson, Cedric Knowles, Paul Harvey, Brent Paterson, Kimberly McKay, Catherine Wedd Edward Bostock, Cameron Drury, Alisha Neilson and Anna Lorck.

All material appearing in THE PROFIT is copyright and cannot be reproduced without prior

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MARKETING PR


PRO HB

New Car valet awash with business Plans are underway for more car parking space at the Hawke’s Bay Airport terminal to service increasing passenger demand. New space has opened up where the old rental car valet once stood and the Airport is undertaking a customer engagement survey on carparking needs. An existing hanger has been moved onto the Hawke’s Bay Airport Business Park and turned into a new rental car valet facility, doubling space and capacity. The airport’s Aeronautical and Infrastructure Manager Olivia Pierre says the project was a great example of upgrading and adding value to a surplus hanger.. It’s a vast improvement on the old facilities, with the two largest rental car companies working from the facilities and a third rental car company storing their rental cars in the complex. The larger companies are able to service up to 80 cars a day. Hertz Rental Hawke’s Bay managing director Phil Cain says the fit for purpose building has made a big difference to turnaround of vehicles and the greater out put means no one has to wait for a clean car. “Car rental hire is extremely competitive with five companies working from the airport, so

having the best facilities to store and clean cars for a more seamless service improves business”, he says. AB Group (Avis Budget) manager Trish Goddard says it’s great to be working in the new modern facilities, it takes about 15 to 20 minutes for one of our staff to clean the car inside and out

Scrubbing up for business Avis Budget Group Manager Trish Goddard, left, and Hertz Rentals Hawke’s Bay managing director Phil Cain with Hawke’s Bay Airport’s Aeronautical and Infrastructure Manager Olivia Pierre

The functional and practical solution was architecturally designed and project managed by Chris Ainsworth from Paris Magdalinos Architects, with Jody Dallas from Alexander Construction managing the building aspect of the project. The complex offers three office spaces, two wash and dry bays, two storages and working spaces, one bay for a large vehicle, a kitchenette and restroom along with 196 sealed car parks. AB Group, Hertz, Thrifty and Hawke’s Bay Airport all use the new facilities. The old car valet facility, which had 73 carparks, two wash bays and two dry bays has been demolished to create space for

additional car parks to support the growth in passengers using the terminal. Ms Pierre says as the Airport plans to make changes to its terminal car parks, we are actively engaging with customers to understand their needs and plan for our future growth. To complete the survey go to www. hawkesbay-airport.co.nz/to-and-fromairport/car-parking/ All completed surveys will go in the draw to win a $250 prepaid parking card which can be used for any carparks at Hawke’s Bay Airport.

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PRO

HB

Aquarium finds local recycling solution

NETLOGIX CEO JOINS NAPIER PORT BOARD

When the National Aquarium of New Zealand upgraded their filter system, they turned to local experts 3R Group to recycle 40 cubic metres of obsolete plastic. “We’ve moved from plastic bio-balls, which provide a habitat for the good bacteria Rob Yarrall that cleanse waste from the water of the Oceanarium, to a sand-based system,” explains Aquarium manager Rob Yarrall. “The sand gives us a better result however it did leave us with a bit of a disposal problem.” The Aquarium also delivers the Napier District Council Waste Aware programme in schools, so wanted to avoid landfill if possible. “We’re very aware of the consequences of plastic making its way into our oceans, plus we wanted to practice what we preach to kids about doing the right thing with waste, so we really wanted to find a recycling solution.” 3R general manager operations, Gareth Mentzer says they tackled the polypropylene bio-balls by shredding them on-site at the Aquarium using their custom-designed mobile granulator. 900 kg of the shredded plastic was then delivered to Napier’s Polymer Systems International to process the plastic and use it to manufacture new products for the construction industry.

Chinthaka (Chin) Abeywickrama, Chief Executive and Executive Director of transport and logistics company Netlogix was appointed to the Napier Port Board.

Bay firm wins national KiwiSaver award For the seventh year, Cole Murray has won the Grosvenor KiwiSaver Practice of the Year award, proving again that regional financial services firms can deliver big benefits for their clients. The win comes hot on the heels of one of Cole Murray’s insurance advisers, Roseann

NZ Digital

+

Profit

Prior to launching Chinthaka Netlogix in 2013, Chin Abeywickrama was Chief Executive Officer of Fonterra subsidiary Dairy Transport Logistics, Chief Operating Officer of Wellington International Airport, and held various senior management roles at Carter Holt Harvey.

Whakatu Arterial set to begin soon John Roil – the little guy beats his own council The new iway on Havelock Road Local government election year Bumper apple crops Summer event season – Art Deco, Horse of the Year, summer concerts

Napier Port Chairman, Alasdair MacLeod said, “With 25 years’ experience in freight, shipping and logistics, Chin brings a wealth of experience in efficient supply chain management.

-

“I am confident his skills will strengthen our board and provide positive benefits to central New Zealand’s importers and exporters who rely on the port to get their products to market quickly and cost-effectively,” he says.

Loss

Chin replaces John Shaskey who retired from the board due to unforeseen health reasons on 31 August 2015. At the AGM, Wendie Harvey was also reappointed Napier Port Director for a further three-year term after joining the Board in 2013.

The HB Business Awards – just over 150 people attending HDC and its district plan’s impact on business HB Opera House

McConnel receiving an Advisers Institute award win.

than 94,000 New Zealanders enrolled in its schemes.

The Grosvenor award is designed to honour the achievements of an advisory practice dedicated and committed to KiwiSaver and contenders are judged not only the number of members they introduce to the KiwiSaver scheme, but also on the level of support and service they provide.

Winning the Advisers Institute KEPA award places Mrs McConnel in the top 20 percent of advisers in New Zealand.

Grosvenor is one of this country’s largest KiwiSaver scheme providers, with more

Websites, Digital Marketing & Strategy

Cole Murray director Mike Murray is thrilled with the award wins. “To have won the Grosvenor award again and to have one of our advisers recognised and placed in the top band of her peers is immensely satisfying,” Mike says.

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FEBRUARY - APRIL 2016

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Our Changing Employment World The Rise of the Contractor

By Sarah Thornton

New Zealand’s employment landscape is changing. The traditional model of an employer–employee work relationship is being corroded by a more dynamic and flexible approach to working brought about by technology and an emerging ‘on demand’ employment view by many businesses. Opinion about whether Hawke’s Bay is following this trend is mixed. Freelancing and Contract For Services methods of working are on the rise and the number of websites dedicated to freelance or contract jobs like Yudoozy, The Pond and Zealancer is also increasing. There are pros and cons to being an employee or a contractor; each carries its own benefits and challenges. For the employer, deciding whether to bring an employee into a business or outsource a role to a contractor is a major decision and one that will impact the company’s culture and future. New Zealand employment law recognises the special relationship between an employer and employee and acknowledges it with entitlements. Holidays, sick pay, minimum wage payments, working conditions, KiwiSaver and defence from unfair dismissals are just some of the protections employees are entitled to.

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On the other side of the ledger, the relationship between an employer and a contractor is purely commercial. Each has equal bargaining power but there is not the same level of protection provided to the contractor. Contract For Services (CFS) roles are gaining popularity in private enterprise in Hawke’s Bay but will never overtake the need for employees within a business, says Red Consulting’s Rachel Cornwall. “Discussing whether a particular role is more suited to a CFS scenario or an employee is a weekly conversation I have with business leaders and hiring managers. When there’s a need for a function like accountancy or marketing in the short-term, then CFS is an option,” she says. One of the key advantages for an employer to utilise a contractor is that they are dealing with an expert straight away. Contractors are self-employed so are motivated and usually have a high level of skill. As a commercial arrangement it is easier to terminate a contract either for non-delivery or simply if a project concludes. There are no long-term obligations on the part of the employer and for the contractor, it’s a flexible arrangement.

Rachel Cornwall

Employees on the other hand are an integral part of a business and it is up to the employer to invest in an employee’s training and a career path and to keep them happy. “Employer–employee relationships have a mutual obligation of acting in good faith that isn’t necessarily found with contractors. Loyalty is often questioned by employers when deciding whether to take on a contractor. It’s a disadvantage from a company’s point of view,” adds Rachel. “For some companies, having someone working inside the business as an employee to lead a team or be part of setting the strategic direction of the business is important. Those things are very hard to do when someone is not in the office on a daily basis or who works for other companies.

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“I would suggest that employers think very carefully where a CFS fits into their business; look at the bigger picture,” she adds. Stephanie Maloy is an employment lawyer admitted in both New Zealand and Australia and based in Hawke’s Bay. She is seeing a growing trend for businesses to engage with workers in different ways to the traditional employment model. “There’s now a greater range of solutions and more businesses are looking to temporary labour solutions through the use of short-term, labour hire staff or independent contractors.”


PRO Q&A

“Contract For Services (CFS) roles are gaining popularity in private enterprise in Hawke’s Bay but will never overtake the need for employees within a business.” – Rachel Cornwall

Stephanie provides advice on the difference between employees and contractors and why that distinction matters. “A range of factors determines whether someone is an employee or a contractor and it is important to define the nature of that relationship from the start. Businesses can happily engage with a contractor but it’s not until things go wrong that the nature of the relationship is questioned,” she says. “There can be grey areas around whether a contractor has actually become an employee. The courts will ultimately look at the real nature of the relationship to determine whether this has occurred.” Contractors are not typically subject to a high degree of control by the company they are working for. “Contractors should not be an integral part of that business and should be in business on their own account. A contractor will often supply their own tools, including computers and phones, and will usually work off site. Contractors often work for a range of clients as a specialist – it’s a commercial arrangement but it may not be exclusive. There can be an enjoyable autonomy being able to set your own hours and to work for more than one person,” says Stephanie. An employee will usually be situated in the business’s office, use company email and phones, attend staff functions and be regarded as a core member of staff. “There is a high degree of control by the employer including dictating what hours are worked, how the work is to be done and the training that must be undertaken. It’s a less autonomous, less flexible position but there are advantages in terms of career progression and job security,” she adds. In the real estate and insurance industries, contractors working within a business are common.

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Anna Murphy is a senior client adviser for Aon, specialising in life and disability insurance. She has a CFS with Aon New Zealand to deliver insurance advice and has been working in this capacity in Hawke’s Bay for the past 13 years. Nationally there are 15 Aon advisers who work on a CFS basis around the country. Although Anna is an independent contractor, she spends 90 percent of the time in the office with the other brokers and support staff, all of whom are employees. “My business relies on referrals generated from other parts of Aon, so I need to be in the office with the team,” she says. For Anna, choosing and negotiating to work as an independent contractor was a decision she made when she was working in a marketing role with two small children. “I needed flexibility and a better work–life balance, and the earning potential was there. The relationship I have with Aon as a contractor means I have autonomy, working flexible hours if I need to. The downside is I am not entitled to holiday pay. In the past ten years I have never taken more than two weeks holiday each year, for fear of missing out on vital business.” Loyalty has never been an issue for Anna who says she enjoys the structure of the relationship with Aon and has formed a trusting association with the company. “Clients also like the fact that I’m independent. I think there’s a high level of commitment and consistency as a contractor that is valuable.”

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Anna has one support staff person and is invoiced each month by Aon for those services. She also pays rent for her space in the office and provides all of her own work tools including computer, car and phone. One of the major financial advantages of being a contractor is being able to claim work-related expenses. “If you have a home office you are able to claim a portion of your rates, electricity and other expenses that are directly related to running your business. There are also car expenses, hospitality and equipment expenses that can be claimed. The key is to keep good business records and put aside tax each time you are paid,” says chartered accountant and BDO partner Heather Hallan. “Unlike an employee whose tax is taken care of in the form of PAYE, a self-employed person must be on top of their information and be financially disciplined.” As well as not having leave payments, contractors are also liable for ACC payments. “Foregoing these entitlements could be worth up to 20 percent of their charge out rate. They would need to acquire the tools of the trade whether that’s a computer or a larger capital item, and they should have their own business insurances. Then there can be the constant uncertainty of income flow. For some, that’s a level of risk that’s too hard to manage,” adds Heather.

“While an employer may have clarity from a contractor around cost for a service, it is very important to also have clarity around expectations.”

– Kimberley McKay Like many other organisations, BDO is increasing its outsourcing and ‘offshoring’ globally, utilising companies rather than individuals for functions from cleaning to IT. “If there’s a piece of business or an activity you can’t run in-house, an alternative is to outsource or offshore this to a company with expertise and multiple people. The advantage of that model compared with a sole contractor is that you can access a group of people with different skills and who have a team to back them up.”

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BDO’s HR consultant Kimberly McKay has some advice for employers considering hiring contractors or freelancers. “While an employer may have clarity from a contractor around cost for a service, it is very important to also have clarity around expectations. Document what services a contractor will deliver, in what time frame and to what standard. If a dispute arises, both parties can refer to the contract. Bigger projects will need a fuller agreement and will need to Kimberly McKay consider issues such as intellectual property ownership and confidentiality. It’s creating an understanding for both parties to manage risk. Assess the key risk areas for your business and build a contract to suit.” As a self-employed PR and writer, I like being in charge of my destiny. Yes, the peaks and troughs of income flow can sometimes be challenging but these pale against the flexibility, autonomy and earning potential that come with being a contractor. Through self-employment I’ve discovered that the ubiquitous work– life balance is achievable. There’s a thriving community of talented freelancers working in a variety of industries here in Hawke’s Bay. Contracting may not be for everyone but for me, it’s the new black.


PRO Q&A

The Grand Master What’s your career background? I have a background in arts, events and facility management running my own theatre in Auckland, Capital E in Wellington, ArtSound FM and developing festival and community events for Auckland City Council. More recently I also worked for Internal Affairs with roles at the Office of Ethnic Affairs and Charities Services. What have been some of your career highlights? Setting up Music in Parks and the Living Room Series for Auckland City Council; leading the development of some of the most iconic festivals in Auckland, including Lantern and Pasifika festivals; running Capital E and the National Theatre for Children; developing an exhibition for Museum of Wellington around death and diversity; and starting Pecha Kucha Nights in Wellington. What’s your Hastings?

vision

for

Creative

To be the heart of the arts in Hawke’s Bay.

Pitsch Leiser has revived the arts and culture scene in Hawke’s Bay. Last year he filled the famous Spiegeltent in the Havelock North domain night after night as part of the Harcourts HB Arts Festival. The event returned a profit ensuring that it will continue this year and beyond.

Events can be pretty hard to make money out of in the first year – but you did this for the HB Arts Festival. How was this achieved? Through a lot of hard work and not taking no for an answer, trusting my instincts and inspiring people to participate. Offering great content, a unique environment and attracting the best team I could wish for. How do you see the event evolving? For the next few years I see this as an annual event celebrating the arts through all its facets with a Spiegeltent at the heart of it! Continuing to develop strong partnerships with other regional arts festivals for quality programming, whilst strengthening local partnerships with funders, sponsors, patrons and benefactors and of course our amazing local artistic talent. The festival will also slowly offer experiences across the wider Hawke’s Bay region, from Waipawa to Wairoa, using local venues to introduce people to quality arts experiences. Later we will programme some of the larger acts at the HB Opera House.

How do you pitch events like HB Arts festival to businesses? How do you show them that it will add value to their brand? A quality event lends itself to partners with high quality products and services on offer. We are here to stay and will soon develop into an iconic Hawke’s Bay event for a diverse audience. We are filling a huge gap in Hawke’s Bay’s cultural offering. We connect to community through the best arts experiences on offer in the region, making memories that last forever. Our audiences are discerning, well educated, have disposable income and come from throughout the region and beyond. We are stepping outside the box, leading edge, exciting and entertaining. We are building cultural capital in Hawke’s Bay and beyond. Do you have any other event ideas that you want to bring to life? Yes, plenty, but that will be for another time. If there was one act that you would love to be part of the arts festival, what would it be? Vis a vis Theatre company from the Netherlands. Their show Topolino is still my all time favourite outdoor theatre I have ever seen, right here in New Zealand as part of the New Zealand International Arts Festival in Wellington.

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Online from home for All Black Digital Media Expert David Barton-Ginger proves that when it comes to he moved into IT and started delivering online content, you can do it from anywhere. to learn more about websites. He chooses to live and work in Hawke’s Bay. “I wanted to get into this

space; I had had enough of banking. When I eventually returned home the New Zealand Rugby website was going to get turned off by David has been with NZR for 12 years and as crazy as it seems in the people who ran it and today’s digital world, he was initially only given a three-month contract so they needed someone to to ensure NZR had a website live. come in and get it on a new David recalls how NZR has gone from nearly not having a platform within six weeks. website at all to now being a force on both the rugby field and the “I had a meeting with worldwide web. Therese Walsh (now Dame As Dan Carter was taking his last conversion at the Rugby World Cup, New Zealand Rugby (NZR) digital channels manager David Barton Ginger was creating Facebook, Twitter and Instagram posts from his home in Napier.

Back then Fraser Holland, now also based in Hawke’s Bay, was NZR’s Terese Walsh) on a Thursday commercial manager and he knew how important it was to have a web and I started on the Monday. presence. “Twelve years later and I’m still there. What’s funny is that another For David, the opportunity was career defining. Up until then he had guy had been offered the role and had turned it down because it been a banker and had just returned from the London banking scene. wasn’t permanent! On a previous visit home to New Zealand, he had met a woman who “There has never been a day when I haven’t wanted to go to work. had completed a website design course and he liked what he heard. He It is such a good job and is constantly changing. I get to work on the wanted to find his creative bent and although he returned to the UK, Internet and talk rugby all day … it’s pretty cool.” The role has changed dramatically since David first began. In the early days it was about providing up-to-date content on one website. Today NZR’s online suite includes www.nzrugby.co.nz, www. allblacks.com, most social media platforms as well as digital media content to these channels.

An IT company selling copiers & printers . . . now that makes sense!

The websites now have more than 4.5 million visits each month while the All Blacks and New Zealand Rugby have a combined social audience of more than five million. This includes more than 3.5 million on Facebook, 580,000 on Twitter, about the same on Instagram, more than half a million on Google Plus and 100,000 YouTube subscribers. When David first started in the roll, his primary responsibility concerned adding new and relevant content to a website; now he must remain up to speed in a constantly evolving world, keeping abreast of new technologies, working with sponsors, developing new digital channels and getting the fans closer to the teams through exclusive behind the scenes content. “I live on my mobile, that’s my life now. The style and direction of content is really focused on mobile.” The digital team at NZR is also ever-evolving and now comprises a videographer and presenter/producer who tour with the All Blacks and take fans behind the scenes. There’s also a digital content producer and in 2016 a digital content editor will join the team. There is a real game plan about what type of content is best suited to each social media platform with various exclusives for each audience. “We used to get a piece of content and simply put it up on all channels. Now we are being more selective about where we put content based on what the end-goal is and the audience we’re trying to reach.

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David Barton-Ginger

“For example, we are being more strategic with our use of Facebook. Not only do we put content on it that drives traffic to our website, primarily through the use of teasers, we now look to have content that is native to Facebook but does not sit anywhere else.” When Richie McCaw announced his retirement, David’s team asked fans via Facebook to provide questions for Richie, the answers of which would be posted exclusively on Facebook. “We went to our Facebook audience and asked for questions to put to Ritchie. Half the interview we did was then dedicated purely to Facebook questions. What was great was the questions weren’t typical of those a journalist would ask, so it made it enjoyable for Richie as well as interesting for fans.”

Snapchat – some insights into social media How has the style of social media content changed? Now more than ever the style of content is really focused towards mobile. The days are gone when a traditional journalist wrote a long feature piece and then someone in a digital environment expected to read that on their mobile device. People now want short, sharp pieces that get to the point quickly. As an example, we did some testing over the Rugby World Cup where we put up traditional style pieces against content such as “Ten things to look out for in the Test match against Argentina” and “Five key things that came out of the Test match against South Africa” and this type of content went bananas. All the stats that came back overwhelmingly showed that the content was viewed through mobile.

Because of NZR’s large Facebook audience, David has a direct business relationship with the Sydney base of the social media mogul, and when the Richie McCaw interview was posted, Facebook supported it by boosting the posts. “We are a big social media brand so it enables us to have direct relationships with the likes of Facebook and Twitter,” he says. In 2016 NZR is set to embark on a digital transformation project that will explore everything from CRM for fans and stakeholders to technology used in the delivery of grassroots rugby to digital marketing and website hosting for provincial unions across New Zealand. “There are a lot of opportunities out there to make New Zealand rugby more efficient, particularly from a digital perspective, and we will cover everything from the technology How is NZR using social media to generate revenue? Although there are revenue generating opportunities with the mass audience the All Blacks and New Zealand Rugby attracts, it is yet to be fully realised. We are now really starting to look at how we monetise it. No one has cracked it from a social media perspective but I’m sure it will happen. A couple of measurables are merchandise and ticketing. We offer special merchandise offers to fans on social media together with pre-access to Test match tickets via our members’ area – Team All Blacks (www.teamallblacks.com). Potential commercial partners of NZR now also look at the union’s digital and social media presence as a key decision factor. Unlike in the past, commercial negotiations also place a value on digital and social media. It is providing a true commercial value, there’s no doubt about it. The case also rings true for players. Those with a large social media following are now more likely to attract a higher value in thirdparty sponsorship and endorsement fees.

NZR uses to what provincial unions.

we

can

offer

“It would be ideal to have a solution where we can gain an economies of scale, cutting the costs for all involved and providing an outstanding service where provincial unions are seen to be offering a far better digital product to their fans. They can then concentrate more on on-field performance, marketing/sponsorship and supporting the local community game. “Imagine a product similar to the Cricket HQ app where you can keep up to date with games and player statistics at all levels. It is something that could work from a rugby perspective and where we could track a five-year-old starting out right through to him becoming a professional rugby player. While it would be great for the players and supporters, it would also be a big help for club and provincial union administrators. What advice do you give a business that’s starting out when it comes to digital marketing? 1. Regardless of the business, start collecting data and information from your customers sooner rather than later, even if you don’t plan on using it for a while. At some stage you might decide to actually target some people and you will have the information already there and you won’t have to start from scratch. 2. Don’t see digital as a sole means to marketing success. Integrated marketing campaigns certainly work best. Once you work out the channels you want to use, the magic is then in how you make them work together for maximum effectiveness in your campaigns. 3. On your digital and social media channels only provide content that is relevant and adds value to your customer. We use this mantra all the time at NZR and regularly rejig content or simply don’t use it if it does not meet these two requirements.

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Boom 2015 signals positive market for 2016 The Hawke’s Bay real estate sector has had ups and downs since the last peak in 2007 but it all turned around midway through 2015 and for Bayleys Hawke’s Bay the upward trend looks set to continue in 2016.

Bayleys Havelock North manager Daniel Moffitt is in a buoyant mood as he looks across the local residential, rural and commercial real estate scene. The firm ended 2015 on a massive high with the level of sale signs unseen since 2007, closing over $23 million in property sales in November including the “exceptional result” for Matarangi, on Craggy Range Road, which fetched just above its ratable value of $4.32m. On the back of the Matarangi Road sale, Bayleys ruled the roost with the sale of numerous notable high-end properties such as Summerlee Lodge for $3.05m; a prominent house in Te Mata Road for $3,82m, a property on Tukituki Road for $1.6m; a luxury home in Durham Drive, Havelock North which sold over its RV of 1,43m, a house in Te Mata Road for $900,000; and 8 hectares of land and buildings on Lawn Road for $710,000. In Napier, there has also been some significant sales with five notable properties selling over $800,000. A Dartmoor Road house sold for $1.35m; a townhouse in Napier sold for $975,000, a lifestyle property in Matarangi sold for $890,000; a house in Breckenridge Lane sold for $870,000 and another in Esk View for $820,000 Due to this success and Bayleys national and international reach, the firm has also secured exclusivity on Mana Lodge, the home owned by the late Sir Paul Holmes and his wife Lady Deborah Holmes. The house went to market just recently and already has strong buyer interest. As a further signal of the positive market, Bayleys have seen an increase in properties being auctioned due to multiple buyer interest. “In recent months we’ve sold a higher proportion of properties by auction and it is once again becoming the preferred option by vendors in a similar way to the last property boom. “We have a between two to four interested buyers for each property, so taking a property to auction is the best approach.’ Daniel said although there has been plenty of hype around Auckland buyer interest in the Hawke’s Bay property market, interest was just as strong from other parts of New Zealand as well as by locals. “There’s been plenty of hype around Aucklanders buying in the provinces but we’ve also had strong interest locally and elsewhere. The sale of Matarangi to a Hawke’s Bay family is proof of this. Upon the sale, former owner John Stace commented publically “we we’re very impressed with Bayleys’ professionalism, their attention to detail, their communicative skills are par excellence and they have been very diligent.”

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Daniel Moffitt, Gary Brooks and Tony Rasmussen

The litmus test for the residential property market will be available housing stock. Stock levels of existing houses is low and there’s only a few residential developments with sites for sale. “Good residential sections are pretty hard to come by. We’re marketing 13 sections in Tukituki Valley but they are at the higher end of the market. There’s some properties in Frimley but some land that could be developed remains off market at the moment. Demand in Napier was evidenced when the Napier City Council sold close to $5 million of property in Parklands. Over 20 people queued at the council for the release of 28 sections and they all sold within an hour and a half.

Bayleys Hawke’s Bay ended 2015 on a massive high closing $23 million in residential property deals in November. Sales volumes in Hawke’s Bay rose 26 percent compared to December 2014. Sales volumes increased by one property from November to December 2015. The media price rose $36,500 (+13 percent) compared to December 2014 and the median number of days to sell improved by 15 days compared to December 2014 to 33 days. In releasing the December stats REINZ said “the property market in Hawke’s Bay has certainly become more robust over the past few months, with a new record median high and indications that demand is now spread right across the price range rather than being strong at some price points and soft at others.


Pipfruit – the star of the primary sector

Bayleys Country team of 10 agents spread from Wairoa through to Wairarapa.

Commercial, Industrial and Rural property markets are also performing strongly. There has been numerous land transactions as well as facility developments and redevelopments, especially within the pipfruit sector.

“We’ve got great coverage and a team that is very experienced,” Tony says.

Bayleys Hawke’s Bay Country manager Tony Rasmussen says the pipfruit sector is on a significant productivity drive with over one million trees planted in 2015. Pipfruit New Zealand is forecasting a four percent increase in apples in 2016 with a huge jump in 2017 by 19 percent. Tony says this is having an impact on packing and coolstore storage space as well as accommodation demand for RSE workers from the Pacific Islands. Tony says there is continued intensification of the Heretaunga Plains land for a range of land use from pipfruit through to cropping. Bayleys sold an 10ha orchard in Crosses Road Havelock North in late November which was leased to one the region’s large apple producers. “Crosses Road had strong interest from within the pipfruit industry as well as lifestyle buyers looking to live in a rural setting but close to town. “The ‘lifestyler-type’ person was interested to tap into an industry that is on a roll and provides a good passive return. “Any bare land is very sought after for anything from apple nurseries to growing apples or cropping.” Tony, who was a Bayleys top 5 national agent in 2014/15 is excited about the

“Firms like Strata Group and Logan Stone could have looked outside of the CBD but have chosen to stay put and also attract Moore Stephens Markhams, Codeblue as well as promote the complex to new businesses to the region.” – Daniel Moffitt

Commercial viewpoint Daniel says commercial investors have also been quick to snap up sought after properties such as 211-219 Karamu road, a multi-tenant office space with high profile anchor tenant Forsyth Barr which was sold to a Wellington investor with an 8.2% yield. Another example was 3 Turner Place in Napier, an industrial building with a strong tenant with long term lease with an 8.5 percent yield which was bought by a Gisborne investor.

The Hastings CBD has had a bit of attention in regards to lower occupancy levels but Daniel says this is cyclical and there’s evidence of renewed interest both from retailers and professional service firms. Several firms have moved into a new development – Business HQ on the corner of Hastings Street and Queens Street. “Firms like Strata Group and Logan Stone could have looked outside of the CBD but have chosen to stay put and also attract Moore Stephens Markhams, Codeblue as well as promote the complex to new businesses to the region. “Kiwibank has also had a positive impact for the Hastings CBD, meanwhile in Napier, the CBD has had a bit of a makeover and this is helping retain existing retailers as well as attracting new retailers,” Daniel says.

Food processing and horticulture developments that are completed or underway include

New apple breed Rockit opens a packing facility in Havelock North

Hill Road coolstore expansion (5400m2)

Henderson Road Coolstores (new facility 9000m2)

Longview coolstore expansion (2000m2 approx)

Mt Erin Coolstore expansion (2500m2 in 2015 and another planned for 2016)

Malbec Packhouse/coolstore expansion (1500m2)

One Pure water facility at Awatoto

Miracle Water facility in Elwood Road

Dry storage facility at Tomoana Warehouse in Elwood Road

Crasborns - new warehouse for Orora (approx 8000m2)

Crasborns building additional 9500m2 for storing

Get Airpoints Dollars™ when you sell with Bayleys. For more information, go to bayleys.co.nz/airpoints or call your local Bayleys office on 0800 Bayleys.

Terms and Conditions apply. Licensed under the REAA 2008.

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Shirley Tobeck with children left to right Brody Manuel, Joe Grace, Jude Booth, Brooke Makris and McKenzie Douglas

A Playground for Business Investment in Hawke’s Bay’s childcare centres has reached fever pitch levels, driving fierce competition for business and leaving parents more spoilt for choice than ever before. Childcare operators, both new and existing, are choosing to expand and reinvest to maximise returns and sustain an increased level of competition in the market. Add to that an increasing participation of mums returning to the workforce, households relying on two parents working and continued government early childhood education (ECE) subsidies paid to providers and demand for childcare has never been stronger. There’s no doubting it, childcare has become a serious business with new centres seemingly popping up everywhere, giving more childcare options for parents and owner/operators extending themselves financially to keep up with the competition. Hawke’s Bay is undergoing a major growth spurt in the number of licensed ECE services. Over the past decade, Hastings ECE services have risen by 25 percent, Napier by 14 percent, Central Hawke’s Bay by 31 percent and Havelock North by a whopping 175 percent. The reality is there will always be a need for quality childcare, just how many childcare options can our region sustain? If competition is considered healthy then Hawke’s Bay is positively glowing. 14

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It could be argued that the risks of expanding or even entering the industry are mitigated somewhat by the sector’s government funding, but get the business model right and provide a quality service where children are put first and the rewards can be sweet. As the face of Little Guppies Early Childcare centres and the woman behind the muralled ‘castle’ on Havelock’s Te Mata Road, Shirley Tobeck is Hawke’s Bay childcare’s colourful character. She’s seen the industry take off rapidly and faced some growing pains since she opened her first centre in Greenmeadows nine years ago. “Ten years ago we had virtually nothing and now parents are spoilt for choice. Childcare centres used to be returning 30 percent and now I’m lucky to make a 6 percent return due to reinvesting, rising compliance costs, wage costs and land leases. Don’t get me wrong, I take home a good living but I’m working for it. “We grew really fast, I only ever meant to have one centre with a roll of 40 but the sheer growth and demand prompted me to expand,” says Shirley. Little Guppies now boasts 98 children across its centres on Guppy Road, Osier Road and Te Mata Road, and with plans afoot to expand by another 30 spaces and build an improved nursery in Havelock, Shirley will soon have almost doubled her business. But she has some words of warning for those seeing the sector as a free lunch.

By Alisha Neilson “It’s not for the faint-hearted. To give staff wage increases, professional development and good resources you need to be 100 percent full, you simply couldn’t sustain yourself any other way. The goalposts are constantly moving in this industry, 20 hours ECE has been amazing for middle-income families but we’re losing more and more funding and with expenses rising, the sector is not as profitable as it used to be.”

Over the past decade, Hastings ECE services have risen by 25 percent, Napier by 14 percent, Central Hawke’s Bay by 31 percent and Havelock North by a whopping 175 percent. Piccolini founder Rachel Strong and husband Jonathan have seen their business increase by a staggering 300 percent in just five years. Through a strategy to expand their brand to three centres in Havelock North, Napier and more recently Hastings, Piccolini now has 225 children on its books. “It may look easy, it may look profitable and the buildings might look flash but like any business, it is an absolute art to get your level of service and quality right,” says Rachel. “We pride ourselves on being a familyowned business with nil responsibility to any shareholders. Yes we’re in growth phase at the moment, we’ve thrown the kitchen sink at this and our return is in the negative but we have faith we’ll succeed,” adds Jonathan.


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underestimated, a lot of people think it’s a great business model and a licence to print money but if you don’t have a genuine passion for children you simply won’t survive. “Whether we like it or not, to remain financially sustainable childcare centres are upsizing and becoming more businesslike in structure, both aesthetically and internally. Owner/operators have to be savvy at walking the fine line between providing families the best care possible and striking the right staffing/roll volumes versus expenses.” Rachel and Jonathan believe business efficiency is better achieved in newer buildings, like their signature Hastings centre. Built over 2,700 m2, the two-storey facility with staff office space upstairs holds a license for 100 children. The Strongs have invested heavily in state-of-the-art resources and equipment and offer distinctively separate areas designed to cater for infants, toddlers and older children. Brendon and Emma Dawson and children

The Strongs are a husband and wife team with four boys under the age of 11. Jonathan left his day job as general manager at Tremains Real Estate three years ago to join the family business full-time. The self-confessed risktakers, who both possess business degrees, are examples of what can be achieved in the industry with good foresight, fortitude and yes, a large amount of faith. When Rachel opened Piccolini’s Havelock North centre

nine years ago at the age of 29, there were only a handful of childcare operators in the village. She’s seen up to eight competitors enter the market since then and while she admits to having moments of ‘why am I in this game?’, her passion for children has always been her motivating factor. “You’ve got to make sure you enter this industry for the right reasons. It’s

Cherry Grove Childcare and Family Centre is the newest kid on the block to open in Havelock North. Licensed for 50 children on a one-acre site (more than 4,000 m2), the centre’s owners – livestock agent Brendon and lawyer Emma Dawson – know a thing or two about running their own businesses. “We wanted our three children to attend a centre with heart and when we started looking around there were very few privately owned centres remaining. Our next criteria

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New general manager Kerry Henderson says a big difference for PORSE home-based care and education is the investment in people, not infrastructure. “Using funding from government, we invest in our educators and staff so they can offer individual programmes tailored to each child, which is easier with lower child to adult ratios. “By using the home and community as the learning environment, it frees up resources for us to spend on people. “We’re lucky to have our own Education and Training Organisation, that is accredited by the New Zealand Qualifications Authority (NZQA) so we can develop fit-for-purpose training and professional development for our sector. “Now that we are part of Evolve Education Group, we have the ability to share our programmes further afield, and by using technology and online forums we’re hoping to extend our reach to parents and families who might also want to learn more about how the brain is wired and fires in the early years.” Havelock North-based mother of three Ursula Maidens has become a global success with Rockmybaby. As Australasia’s largest nanny recruitment service, Rockmybaby has recorded significant growth over the past 10 years, opening franchise branches in Switzerland, the UK, Australia, Israel and Europe.

“Using funding from government, we invest in our educators and staff so they can offer individual programmes tailored to each child, which is easier with lower child to adult ratios.” – Kerry Henderon - PORSE Kerry Henderson with her son Ben

was space for our children to discover and explore, essentially space for kids to be kids,” says Emma. “Our point of difference is being able to offer one drop off to cater for all aged children, and each age/stage group has their own separate space. There are seven spaces in all, with an onsite cook who produces four meals a day.” The Dawsons have an adjoining family centre designed to provide antenatal classes and a facility for parents to meet regularly with their babies. The New Year has seen licensed numbers at Cherry Grove nearing capacity, with some parents booking for a year or two in advance. “Our business plan is to put the children first. We will deliver the best care and education we can in a loving and nurturing environment. The key for us is for the children at Cherry Grove to feel safe and secure so that they can discover and explore in the generous inside and outside spaces. Our catch phrase is ‘Wisdom begins with Wonder’.” There’s little wonder why 20 years on, Hawke’s Bay-born PORSE remains New Zealand’s leading in-home childcare provider. With around 30 percent of the home-based market, PORSE provides care and education for more than 5,000 children and works with more than 4,000 families, 2,000 homebased educators and nearly 2,000 students. PORSE has 240 staff working in 38 community teams across the country, supported by its national office here in Hawke’s Bay. 16

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Ursula owns and runs the global side of the business, while she and business partner Janine Bayley both operate the national arm. “We are all about providing our clients with the whole package, total childcare solutions, this is our point of difference. There are many different parts to our business model – babysitting, nannies, au pairs, ECE providers receive Government funding per child through its bulk fund for full-time care (30+ hrs/week) and rates depend on the number of qualified teachers and service offered. Childcare fees are charged to parents in addition and set by the provider. $ per funded child hour (including Gst)

Under 2

2 and over

20 hours ECE

80%+ registered teachers

$12.48

$6.95

$11.77

50-79% registered teachers

$11.28

$5.98

$10.71

All day and sessional Kindergartens

Sessional teacher-led centre based services. 80%+ registered teachers

$10.77

$4.88

$6.29

50 -79% registered teachers

$9.79

$4.37

$5.72

Quality

$8.84

$4.43

$8.30

Standard

$7.74

$3.90

$7.82

Quality

$8.84

$4.43

$8.30

Standard

$7.74

$3.90

$7.82

Te Kohanga Reo (except those recongised as teacher funding)

Teacher-led home-based ECE services

Table Source Ministry of Education – ECE funding handbook.


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Jonathan and Rachel Strong with Sammy

night nannies, event care, corporate childcare, in-home care and OSCAR [out of school care and recreation programmes for primary and intermediate aged children].” In the past two years, rising demand has seen Rockmybaby open four in-home networks licensed for 320 children in Hawke’s Bay, Waikato, Bay of Plenty and Auckland. While this is part of the company’s strategic growth plan, Ursula is quick to point out that in-home care comes with its own set of challenges. “In-home childcare government funding is much less than what childcare centres receive. Yes, we receive funding from the government but with that comes a whole lot of responsibility, a huge amount of accountability and compliance costs.” Rockmybaby has a rising database of 19,101 clients, 21,644 approved candidates and 17,275 more pending approval; it would seem the sky is the limit for Rockmybaby.

Number of licensed ECE services in Hawke’s Bay: Napier

2005 2015

57

65

Hastings/ Havelock North

99

124

CHB

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GHD extends services to digital communication solutions A recent road trip through the central North Island has led professional services consulting business GHD’s Hawke’s Bay manager Tony Harrison to push forward in promoting a full service digital solutions offering that’s set to improve communications between councils and its ratepayers. Tony has been appointed as GHD’s national lead for eSolutions, which aims to connect councils and businesses with their audiences across all platforms, disciplines and devices. Tony Harrison eSolutions can also develop custom apps to deliver work more efficiently, or provide tools to ensure safe work practices. eSolutions have a solid track record having delivered website and custom app builds for over 200 authorities across the USA and Canada as well as a wide range of private sector clients. Tony has teamed up with Canberra-based Molly Campbell who heads the Australian eSolutions business. “During the road trip visiting existing clients there was a lot of interest in the several products which can be delivered off the shelf for very competitive costs or modified to meet specific client needs. “With everyone living increasingly busy lives and using cellphones as our primary means of communication, providing links to your clients or customers and tools for your staff that maximise the digital world are key to running a successful business,” Tony says.

Development of Digital Strategies

One particular digital product that has sparked interest is Pingstreet, which is a local council mobile app that provides residents with real-time access to garbage and recycling calendars, current events, local government info, social media and more. Users can report a problem and contribute to improving their neighbourhood, as well as connect council through Twitter and Facebook feeds and stay up to date on the latest news and events. The product can also be easily modified for commercial and community uses. “Pingstreet has been incredibly successful in other countries. It was launched in Canada and has won multiple awards including a gold award for excellence in economic development from the International Economic Development Council. “Adding eSolutions to the GHD suite of professional services such as civil, structural, geotechnical, traffic, and water engineering in New Zealand was an easy decision to make,” says Tony. “GHD provides solutions that require stakeholder communication and we are seeing more and more digital communication channels which are vital for the supply of upto-the minute information and interactivity”. GHD Hawke’s Bay has gone through fast growth since Tony relocated to Hawke’s Bay in 2009. The business in this time has grown to 11 staff. “While we started the business primarily in the Bay with a roading and transportation focus, it has developed into a multi-disciplinary team of civil, structural, geotechnical, traffic, and water engineers. “The local team also draws on technical specialists from across NZ and sometimes Australia to assist local clients,” he says.

Molly Campbell recently visited GHD clients as part of introduction to eSolutions

This is one of the benefits of working within a company with 8500+ staff across 200+ offices in 90+ countries, local people – globally connected,” Tony adds. Services offered by eSolutions include: • Custom website builds with eSolutions’ i:Create Content Management System, a CMS that allows for professional-level editing even for users with no previous programming knowledge. This leads to long-term cost savings and autonomy but still opens the door to WCAG Level AA accessible websites designed to be responsive to any device. • Data management and collection: webbased storage, automatic updates to entire teams, document management, mobile data collection and automated client reporting; • Stakeholder/customer engagement: Powerful & flexible surveying tools, location based, branded and fully customisable; • 3D animation, visualisations and architectural/ engineering fly-throughs; • Pingstreet: Whilst this product primarily provides services to councils it demonstrates cost effective 2 way communication tools which could also be adapted to suit some commercial or community roles; • Mobile health and safety inspection tools; and • Online recruitment and e-procurement tools. Tony is very excited about the potential for eSolutions and the benefits it can bring to existing and potential clients across Hawke’s Bay and NZ. The eSolutions website www.esolutionsgroup.ca/home/ showcases a wide range of the company’s past digital work.

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Market Analytics What transport planners can learn from big retail By Alison Lee, Principal, Transport Planning, GHD, Auckland Big retailers know their market, they target person between 20-39 years old, university them with bespoke campaigns and even educated, unmarried/not co-habiting, open stores where their market is located. working between 20-40 hours per week, and Can we learn from this approach as childless. transport planners? Knowing one’s target market and where this GHD recently undertook a market analysis target market is located is important to be able study into who uses public transport. The to provide a relevant service to customers. Big study is Auckland-based but the findings have retailers know the importance of knowing their applicability more broadly as we consider market. Do you think McDonalds undertakes how we treat public transport as a ‘mobility their marketing campaigns without knowing who they are targeting? Some retailers take product’ with ‘customers’. Public transport is out there competing this process even further. For example, since with other ‘mobility products’ – primarily 2011 Starbucks has been using GIS analysis cars, which are dominant in the Auckland to determine where to open stores which has market, having 74 percent of market share for produced some of the best unit economics in the history of the company and average work journeys. per-store volumes at record levels. Following It is an interesting focus for a transport the lead of retailers such as Starbucks we planner to be considering the users of public did the same type of analysis. Using market transport in such detail as we are so often profile data we were able to identify that the focussed on improving service levels or areas with the greatest propensity for public standards of infrastructure. Analysing the transport use – where our main market lives. market for the ‘product’ (public transport) in Even considering those currently using public a similar manner which we would expect of transport it is the inner southwestern suburbs a big retailer can uncover new ways to target of Kingsland, Morningside, Mount Eden and public transport in particular areas. surrounds. GHD used Geographic Information Systems As transport planners we can learn from this (GIS) to estimate the relationships between market analytics approach. public transport users and a variety of demographic and geographic variables. To By knowing the public transport market put it plainly it is a process which can be profile, knowing where customers are most used to show us what the demographic and likely to be travelling to and from and the geographic distribution is of people who types of services customers need we will be currently use public transport – and inversely able to produce greater take up of public who is unlikely to use public transport. The transport. market analysis showed that that in Auckland Importantly it can help carve out a greater the typical public transport user profile is a market share for the public transport ‘product’ than its current 7 percent for journey to work

trips and break down some of the market dominance of car users. We may not be selling hamburgers or coffee but public transport is a product that deserves the same type of consideration if we’re going to increase its users. In Hawke’s Bay the public transport system is provided by the Hawke’s Bay Regional Council. It contracts goBus to manage the bus network.

Anyone stuck in an Auckland traffic jam at peak hour will be able to tell you that such car dominance in the commuter market is not producing great results for productivity, liveability or the environment. Last year passengers took 744,962 trips on the service. The number was down from 799,845 trips in 2013/14. The downward trend puts the drop in patronage down to lower petrol prices and improved economic conditions. Council is required to review their fares every year by the NZTA, and last increased them by 3.6 percent in September 2014. But due to the decline in patronage and decrease in the real cost of operating the service, the council has not increased fares as if it did, it could “have a further negative effect on public transport usage.”

Total Annual Passenger Trips and Monthly Averages in Hawke’s Bay Year

Total Annual Trips

Monthly Average

2012-13

761,392

63,449

2013-14

799,845

66,653

2014-15

744,692

2015-16 (YTD)

245,869

62,057 61,467

Passenger Category Percentages 2014-15 2014-15

Trips

%

Adult

122,498

16.8%

Child/High School student

204,468

27.5%

Community Services Cardholder

125,300

16.8%

DHB Appointment Cardholder

3,265

0.4%

Promo/10-trips sold directly by HBRC

14,227

1.9%

Senior

16,357

2.2%

SuperGold Cardholder

115,753

15.5%

Tertiary Student

97,325

13.1%

Transfer

42,561

5.7%

Total

744,692

100.0%

Areas with greatest propensity to use public transport FEBRUARY - APRIL 2016

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Relocate Homes NZ

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On the Move Hayley and Shannon Tawhiti

Shannon and Hayley Tawhiti are on the move in a business that never sleeps. Their Relocate Homes NZ business is changing Hawke’s Bay’s affordable housing landscape by offering a range of options for private homes, investment opportunities and good rental accommodation across the region. The business, is now moving about 100 houses a year and has expanded into Auckland, Tauranga and Waikato with potential to double its capacity. Houses come from a range of sources including private developers wanting to remove older houses so they can build more modern complexes and apartments, to houses being sold to make way for state highways along with unwanted state houses up for demolition. It’s been Shannon’s eye for turning what has become a sow’s ear back into a silk purse which has created the greatest opportunity for his clients, where he offers the total solution from gaining resource consents, earthworks, the relocation and then the complete renovation makeover. For Shannon it has also opened the door to offering a good standard in affordable rental accommodation as a property investor and landlord with 85 properties now on his portfolio. Relocate Homes NZ services a wide range of customers from private home owners, 20

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to farmers and growers wanting staff accommodation, to other property investors and landlords. He is also working with property managers and real-estate agents who are selling and renting property. Driven by his personal values and commitment to raising the bar on New Zealand’s growing demand to service the housing shortage, Shannon says providing warm, dry and affordable rental housing is a must. And, while there are no set rules about providing a base standard of rental accommodation, he’s keen to see the housing conditions across New Zealand improve. “Many of the houses I pick up are unfit to live in, they’re going to end up being demolished and aren’t worth much. But, most still have strong foundations and with a bit of work they can come up well,” he said. The business has four full-time staff based out of Hastings and employs 25 contractors. The operation is like clockwork – from pick up to people moving in. Shannon has developed a good basic design for the state housing stock, which includes making all the houses more open plan to accommodate modern living environments and every house has decking, grassed area and a car park. Anything that’s worth saving, is used, including recycling wooden bench tops, doors, joinery and keeping the character with wooden window frames. “One of the advantages of relocating is we lift the house and get underneath it so we can do floor insulation along with ceiling and walls where necessary, so they are warm

and dry houses, which is really important,” he says. Working to extremely tight timeframes to get properties off and onto a section means much of the relocating happens overnight. While some are transported to his yard at Whakatu, most of the work is done at the house’s new location. “Many of the houses I pick up are unfit to live in, they’re going to end up being demolished and aren’t worth much.” – Shannon Tawhiti

People can wake up in the morning and there is a house on a section in their street. “I’ve learned how important it is to talk to the neighbours and explain the process and what the end product will look like. “It’s very different to watching a new house being built when they see it start from nothing, but with a relocatable the house turns up first, and then we get to work transforming it. However, he says one of the good things about relocating is when people do come and watch. “It’s not every day or night you see a house driving in or out of your street. People are really interested, they come and ask questions about the logistics and how the truck maneuvers in and out” Helping Shannon and Hayley along the way is one of Hawke’s Bay’s most respected and


BUSINESS PROFILE

knowledgeable property surveying experts Shanley & Co.

relocatables, up to three houses, compared to the original single house.

on their Middle Road site has worked out perfectly

Colin Shanley, who has been working with Shannon since their business began, says he sees huge potential for infill housing in Hastings to attract more people to live in the city and also to address forecasted housing supply shortages that will come with increased population and pressure on housing demand.

For example there is a corner section along Oliphant Road, where there was one house on a large corner section, it now has three rentals – all completely renovated and occupied.

With Liz’s parents living in the original house, the Frendins took advantage of the bylaws which allow for a relocatable secondary dwelling of 100m2..

A former Havelock North and Hastings District councillor for 15 years, Colin has also played a critical role in advocating on behalf of ratepayers to get planning rules right for future housing and property development. Together, Shannon and Colin have become a real team as they identify sections that have potential for relocatable housing. With Colin’s steady hand, experience and guidance they are working well together with several projects currently on the move. In Hastings District under the Resource Management provisions a section in the General Residential Zone, greater than 1000m², can have two houses on it as of right and if they are compact

Aucklander Ben Fahey says he’s created so much more value in his property by investing in a relocatable project. He’s saved about $70,000 / 30% compared to the cost of a similar size new building in the Auckland market, and also gets the benefit of a house with real character. Ben found the 115m2 rundown bungalow on Trademe, and was soon talking to Shannon about the move and the work that Shannon’s team could do on the house. They picked the house

With nearby parks and open spaces, many people renting houses don’t want large backyards and maintenance because of the extra work and cost. In Victoria Street, Hastings, a relocatable job is nearing completion with two statehouses moved from Auckland along with a smaller dwelling (Granny-flat) about to be moved onto the back of the front larger section. Again this will see three rental options on a section that had one, making the most of the land available. Turning a relocatable house into a home is an affordable option when compared to a new build and it has other advantages including original character and gaining a extra 20m2 compared to a new build . For Tim and Liz Frendin of Havelock North, finding a relocatable house to fit

up from its original Onehunga location, moved it to his yard in Papakura, and then onto its new sloping site in Maraetai. Shannon even sourced and delivered a nice double garage for Ben for half the cost of a new one. “I was pretty amazed how the move went, the guys were working in pretty ordinary weather conditions, but it went very smoothly and quickly. It arrived

They found an ideal stucco 1930s Art Deco house, one of four Shannon was moving off a site opposite McDonalds in Havelock North. The move to Middle Road required the house, which was kept fully intact, being backed up onto the section about 100 meters. “It was impressive to watch the team work, being Stucco it was very heavy and size wise it was at maximum for the truck. “They did a great job, and they even managed to do it with no cracks in the exterior. It looks great – we’ve got a character house and it stacked up economically with the extra size we needed.” Tim says he can see real advantages for people looking at relocatables as an increasingly popular option. www.relocatehomesnz.co.nz

on 10 November 2015 and after a full renovation including changing the internal layout to open plan, rewiring, plumbing, plastering and painting it’s ready to move into (scheduled for early Feb 2016).” “There’s huge potential for relocating houses as an affordable solution to help with the housing shortage in Auckland.

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“We’re using the sun’s energy to drive the pump. We can deliver water to parts of the farm where it’s never been seen before.” Shane Heaton, Richard Scott and Gavin Streeter

Solar pump a relief for drought-stricken farmers A solar water pump system invented in Hawke’s Bay is helping get much needed water to stock on remote hill country farms and has captured international interest from water-stressed countries. Central Hawke’s Bay electrical and pumping business Isaacs Pumping & Electrical has been developing the technology over the past two years with support from Callaghan Innovation. Isaacs Electrical & Pumping directors Gavin Streeter and Shane Heaton were continually being asked by farmers what options were available to reliably get water to stock without electricity, especially in remote hill country properties. “Solar was the ideal alternative but we needed to ensure we had a motor and pump that farmers could rely on to keep stock troughs full. “We didn’t need to look too far; we selected a pump with a proven track record and which has been servicing farms for over 50 years,” Gavin says. The Callaghan Innovation funding helped develop the controller or the ‘brain’,

which is a circuit board that optimises the use of solar power and monitors water pressure, run times and faults logs. “The system is fully automatic, it operates like a standard pumping system and we have just designed some clever features to maximise the pumping time and protect the motor,” he said. The development of the epump has been a mix of international and Hawke’s Bay suppliers providing equipment and componentry. An Italian company developed the industrial continuous rated motor, Hawke’s Bay engineering firm McLaren Stainless designed and manufactured the outer protective shell and another local firm came up with some of the intellectually protected circuitry. The epump can pump up to 120 metres of head and up to 20 litres per minute in daylight hours and can withstand the harshest environments. It can fill stock troughs on hillsides up to 120 metres on hill country and unlike other options, it can draw both clean and dirty water.

Although the epump was primarily developed for farms, Gavin says other uses include hunting and tramping huts. There is also interest from the Pacific Islands as they look to access reliable water sources as well as international aid projects. “We ramped up production due to El Nino drought conditions while we have interest from a South African company that supports community aid projects. “We see significant export potential for the epump but presently we have been inundated with farmer interest, which we’re now fulfilling.” Hawke’s Bay farmer Richard Scott is on a property that was one of the first to buy the epump, which he says is a “game changer” for the rural sector. “I can now get water at all times of the year. With summer expected to be very dry we can access stock water way out on the farm, whereas before we were relying on systems that were proving unreliable. We would get very dry and we couldn’t carry as much stock. “The epump automatically pumps water without the need for us to travel out to the remotest parts of the farm. We don’t need to worry about water all the time. It has enabled us to lift our stocking rates and be more productive. “We’ve also reduced our carbon footprint by using an environmentally friendly solar system,” says Richard. www.isaacshb.co.nz

planners | engineers | surveyors | environmental + 64 6 835 2096 | 94 Raffles Street, Napier 22

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DEBT REDUCTION Small steps can make a huge difference We are currently experiencing the lowest interest rates I have seen in my banking/finance career to date, and there is a lot of noise in the media from banks and debt reduction companies regarding how you can repay your housing loan quicker and reduce debt. They promise offers of special rates and a system that will help you achieve your debt repayment goals sooner rather than later, however, just the promise of a cheaper interest rate or a debt reduction system does guarantee anything! There are several components to debt repayment that consumers need to be aware of, otherwise it’s all just a pipe dream: 1. Have a goal or a real desire to repay debt.

The words “I’d like to repay my loan off quicker” has no substance if there is no real desire or specific goal to repay debt. This doesn’t need to be complicated. It may be a simple as saying “I’m going to pay an extra $50.00 off my loan principal per week” and doing it. Or having a bigger picture goal which makes a statement regarding repayment of debt with the next ten years, then breaking down that goal into smaller medium to short term goals to make it achievable.

2. There is a time to service debt and a

time to repay debt. For example, you have a young couple, double income no children, in their first home with surplus income available to repay debt over and above the minimum payments. Conversely, this young couple moves into the family mode and start having children. Generally, income is affected and their ability to repay more than the minimum decreases unless one of them is a high income earner. This means when you are in family mode, the strategy changes from debt reduction to survival mode, and providing a comfortable lifestyle for the family, which you would assume to be the number one priority. When circumstances change, then you can flick back to debt reduction. This may be when the children go to school and the joint family income increase through mum or dad returning to work full time or part time, or it may be when the children leave home.

3. Surplus Income – if you don’t have

any surplus income for debt reduction, then it makes it difficult to reduce debt. The only way is to review your budget to see if you can squeeze a surplus out of cutting back, however, if you are cutting back on things you enjoy, then chances are you won’t cut back for long. Many of the debt reduction options rely on squeezing the household budget.

4. There are a lot of loan products that offer

interest cost savings such as revolving credit facilities and off set accounts, however if there isn’t surplus income, then perhaps these facilities are a waste of time. These loan products only work really well if there is a lot of surplus available to accumulate in a revolving credit or off set accounts. Over the many years I have been involved in finance, I haven’t come across many people that have a success story regarding debt repayment with revolving credit facilities, as many consumers lack the fifth component – discipline.

What’s the point of living a certain lifestyle, getting to retirement and still have a housing loan and using your KiwiSaver to continue to repay the housing loan!? The majority of us need to borrow funds to purchase a house, however we don’t need the loan to become a millstone around our financial neck which in turn impacts on lifestyle, relationships and general happiness.

5. Discipline, you can have the lowest

interest rate in town, all the coolest structures in place and plenty of surplus income, however if you lack financial discipline, chances are you will make little progress in trying to achieve debt reduction. Debt reduction companies use the holding clients hand strategy to inforce the desired goal. That works for some people but not for all.

As a Registered Financial Advisor, it is my role to highlight the benefits of debt reduction in association with the client’s finance position, as well as illustrate how a little extra in repayments can save the client a lot in interest cost if they persist with it for the duration of the actual term of the loan. “The majority of us need to borrow funds to purchase a house, however we don’t need the loan to become a millstone around our financial neck which in turn impacts on lifestyle, relationships and general happiness.” – Darrin McCormack

It is also my role to challenge the client’s rationale around servicing debt to repaying debt, and to offer solutions to help them not to become a victim to themselves by paying too much interest to the Bank. Consumers move from one bank to another chasing a debt reduction solution, but in the end, they probably have it in their hands already. All the cheapest rates, loan products and pretty graphs telling you of forecasted saving, will only be forecasts unless you have the ability to pay more than the minimum repayments and make a decision to do so. A lot of rental investors mind sets have changed from negative gearing to high yield rental properties with a goal to repay debt. The strategy here is to eventually be debt free to then live off the rental income.

Darrin McCormack has 30 years’ experience in the Banking, Broker, advisory industry You can contact Darrin at www.dmconsult.co.nz or 027 476 3816 FEBRUARY - APRIL 2016

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Feature

ELEVATING

Hawke’s Bay’s Events Economy By Alisha Neilson

Hawke’s Bay’s expanding events economy is about to scale new heights through an injection of potent new players and a predicted increase of already record visitor numbers. A bolstered Art Deco Festival, a growing Horse of the Year (HOY) show and the return of Napier’s Mission concerts – not to mention the arrival of Jetstar – are all helping cement Hawke’s Bay as a global events destination, and the region’s latest achievement in securing the Air New Zealand International Marathon removes any further doubt. Successfully pitching for the marathon and the Elite Road National Cycling Champs are just a few tangible benefits of a more focused regional events strategy helping to maximise financial return on Hawke’s Bay events. Adopted two years ago, the collaboration between Hawke’s Bay Tourism, Napier City Council and Hastings District Council will ensure the region shares in the economic success that events can bring to the community. Hawke’s Bay Tourism general manager Annie Dundas heads the group and is ecstatic that an event company with the global stature of Lagardere Unlimited Oceania has chosen Hawke’s Bay ahead of other regions to stage its international marathon to be held on May 14. “We are delighted to welcome this world-class event; early indications are that it will attract 3,000–4,000 participants and generate 6,000– 10,000 guest nights.” One of the tenants of the region’s events strategy is to build a wellbalanced portfolio of events (of which the marathon is just one) with increased potential to deliver stronger economic returns. 24

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“The power of the marketing channels that sit alongside this event in the shape of Air New Zealand is probably one of the most important aspects and why the event will be so successful. We don’t have that strength locally.” Annie believes that even if it means contracting some events like HOY out to national event managers, we are not ‘selling our soul’. “We want Hawke’s Bay to be recognised as an easy place to host an event so it is a balancing act – we need to think ‘bigger picture’ yet build a reputation in the market that we are open for business and here to help.” It’s that ‘go the extra mile’ attitude from our industry leaders that is leaving a positive impression on Lagardere Unlimited Oceania CEO Dave Beeche and his team. “Annie Dundas from Hawke’s Bay Tourism in particular has been a star – proactive, positive and she really understands the opportunities that significant events can provide for a region. “We have found the local vineyards and other landowners very supportive in helping to create the course and allowing us access through their land for the final 10 kilometres of the race, which will create a unique and interesting experience for our participants.” For Dave Beeche, Hawke’s Bay promises to deliver a “destination event”. “Hawke’s Bay appealed because of its positioning as the ‘food bowl of New Zealand’ and its strong wine heritage. The region is a place people like to travel to for events, for example, the Mission Concert and Art Deco weekend. The other aspect was the bike trails, which make for an excellent running surface. In addition, having Sileni Estates Winery as a finish venue will enable us to deliver a great finish line/festival experience to cap off the run, which will give this event a point of difference from other events.” Return on regional investment is fundamental and sporting events have been shown to pack some real pecuniary punch. A recent economic impact report revealed that 19 sports events held over a 20-month period saw them earn a combined $47 million in revenue and contribute $19.73 million to Hawke’s Bay’s GDP.* Investing in sporting infrastructure like the Regional Sports Park has paid dividends and been pivotal in attracting longer events such as the


PRO

The Big Save Elite Road National Champs

Events

“WE WANT HAWKE’S BAY TO BE RECOGNISED AS AN EASY PLACE TO HOST AN EVENT SO IT IS A BALANCING ACT – WE NEED TO THINK ‘BIGGER PICTURE’ YET BUILD A REPUTATION IN THE MARKET THAT WE ARE OPEN FOR BUSINESS AND HERE TO HELP.” – ANNIE DUNDAS in revenue of $3 million and $2.9 million respectively.

Photo courtesy of Alphapix

Visitor numbers are up and the region is tracking exceptionally well economically from visitor nights and spend attributed to events. It is estimated that total revenue from events in Hawke’s Bay (including flow-on effects) is worth $40–50 million per annum to the local economy.

NZ Masters Hockey and NZ Secondary Schools Football tournaments. Other sporting events of significant regional value include Hawke’s Bay Festival of Hockey, the inaugural Summer Cycling Carnival featuring The Big Save Elite Road National Champs, Hawke’s Bay Cricket Camps, Iron Maori and Triple Peaks Challenge. One-off fixtures like the All Blacks Test and NRL Storm matches are just as rewarding, raking

With a GDP economic impact of $11 million last year, Hawke’s Bay’s Tremains Art Deco Festival is arguably our fastest growing internationally recognised event. In 2015, the festival drew crowds of 38,000 to the region, 20 percent of those were foreign visitors. GDP generated from the event has risen steeply in just two years – up from $4.4 million in 2013 – and Art Deco Trust general manager Sally Jackson isn’t surprised. “It is the only event of its kind in New Zealand; it is completely unique and therefore attracts new visitors to our region. It generates significant and positive economic impact for the local community,” says Sally. Quite simply, the Art Deco Festival and its 200+ events has become a Hawke’s

Bay phenomenon. An independent review panel commissioned to help grow the event concluded last year’s festival was a resounding success but with simple changes and increased investment could improve significantly. “The panel made a number of suggestions including addressing the programme design, introducing new ticketed events and increasing the free public events. Broadening engagement has also been improved upon and expansion possibilities investigated,” says Sally. As we have seen with Farmlands HOY, The Art Deco Trust has also contracted in a new event manager, Jonathon Smith, for this year’s event and Sally is welcoming the change. “The trust has been extremely careful to surround and support the new manager with local experts who will assist with the local insights, but we are also extremely excited to see someone from outside the region bringing in fresh new initiatives for the festival. “It is worth considering the benefits of bringing external experts to the table and growing the event as a result.”

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Events

From flapper fashion and pinstripe suits to the country’s top riding pursuits, Hawke’s Bay’s Farmlands Horse of the Year is still the region’s biggest event earner. With operating expenditure of approximately $3 million, revenue generated of more than $26 million and $12 million in GDP last year, HOY remains the goose that laid the golden egg. It’s no secret the contracting out of the event’s management has been a controversial one but incoming event manager Dave Mee of SMC Events is keen to dispel any scepticism. Working alongside our regional events strategy panel has been invaluable for Dave Mee, as a one-stop shop for support, logistical advice and local IP. See feature on pg 28-29. “The group spearheading the marketing for Hawke’s Bay events is well engaged and eager to make it work for all. Intercity politics seem minimal,” Dave says. To stage the southern hemisphere’s largest equine event takes a colossal combined effort, with local goods and service suppliers getting their share of the pie. Equipment rental company Hirepool holds the contract to provide the majority of the event’s 8,000m2 of lineal marquee space, with local event hire company Mardi Gras making up the remainder. In their own pond, Mardigras poses as a big fish and has the lion’s share of Hawke’s Bay’s weddings and corporate events wrapped up, including Art Deco, HOY, FAWC, and The Mission, Black Barn and Church Road concert series, as well as the HB Wine Awards, Holly Hospice and the

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Horse of the Year

Hawke’s Bay Show. In the summer, these events contribute 40 percent of Mardigras’ annual turnover. General manager Greg Gilmour reports business has spiked by up to 30 percent in the past three years and he’s happy with their market positioning. “This year at HOY we need to build credibility with SMC Events, if we don’t meet their standard or time frames we won’t get repeat business. It’s a cut-throat industry but I don’t see the big guys being a threat; in fact personally, I think it’s good for the region importing their expertise,” Greg says. Henry Norton of Sight and Sound Services is another local events supplier who has seen business skyrocket since opening in 2007. As the provider of staging, sound, lighting, power distribution and generators, his

company now employs four full-time staff and covers 80 percent of the region’s main events. “We’re on the up, having doubled turnover every year for the past eight years. We’re constantly having to extend capacity to keep up with demand,” Henry says. “THE GROUP SPEARHEADING THE MARKETING FOR HAWKE’S BAY EVENTS IS WELL ENGAGED AND EAGER TO MAKE IT WORK FOR ALL. INTERCITY POLITICS SEEM MINIMAL.” – DAVE MEE


PRO

Events

Per capita, Taupo outperforms many others, even claiming to be the events capital of New Zealand boasting 420 events per annum. Headline acts like NZ Ironman and the Lake Taupo Cycle Challenge pull in a combined 30,000 participants and spectators and generate nearly $12 million in direct spend. But Taupo events manager Steve Giles says they cannot compete with Hawke’s Bay’s unique points of difference. “Both regions have their own strengths – for us, geography works in our favour but we can’t always rely on the weather, we don’t have the large scale or number of wineries and we can’t do coastal sports.” Art Deco Festival

Hawke’s Bay Festival of Hockey

In January and February, Hawke’s Bay’s events calendar is jam-packed. It’s the vision of our regional events strategy panel to encourage event promoters coming here to target our quieter months, as seen with May’s marathon. Napier City Council events manager Kevin Murphy sits on the panel alongside Annie Dundas and Hastings District Council’s Craig Ireson. He believes that while we perform very well, Hawke’s

Bay could up the ante in the events market and win more hosting rights by establishing a council underwrite fund. “When Team Hawke’s Bay Trust ran the Pheonix game two years ago we pulled $100,000 from 10 businesses, which gave us confidence to stage the event. We need an underwrite fund to entice promoters here with less outlay risk to them. It could be a joint public/privately funded fund to be used maybe once a year to secure big events.”

Compared to 10 years ago, events in Hawke’s Bay has exploded and put us on the map. The difference now is our councils have a game plan. ‘Big gun’ event management teams might be taking hold of some iconic events but the payoffs are sure to outweigh the parochialism. After all, business is business, right? *Sean Bevin, Economic Solutions Ltd.

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Call Colliers to discuss the possibilities Danny Blair 021 826 496

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Horse of the Year Competitor

PRO

Events

A Leap of Faith

Reigns unleashed for new event manager By Alisha Neilson You could argue that for a team without any equine experience, SMC Event Management is taking a giant leap of faith in taking on the event management of Hawke’s Bay’s pinnacle Horse of the Year (HOY). But a track record in staging large-scale national events gave new CEO Dave Mee every confidence in his team’s ability to build on HOY’s acclaimed reputation, while stamping a few of Dave Mee their own trademark changes in the process. Since the departure of hometown HOY hero Kevin Hansen, Dave Mee admits he has some pretty big shoes to fill and is keen to clear the air on what people can expect from his vision for the event. “We want to reaffirm that Farmlands 2016 Horse of the Year will be the same great event it has been in the past, we’ve no plans to ‘makeover’ any particular elements of the show, rather streamline and improve the experience for show-goers. “Visually there will be a few improvements made to the front gates to give spectators an enhanced sense of arrival, and creating more pathways and signage for people to explore what else is going on outside of the main rings is also important.” Since arriving in Hawke’s Bay in 1997, Horse of the Year has grown at a phenomenal rate and is now touted as the largest equestrian event in the southern hemisphere attracting 2,600 horse and rider combinations, 85,000 spectators and 400 volunteers. Add to this 28

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8,000 m2 of retail space and you can quickly understand how HOY has become the $12 million golden goose for the region’s economy. Securing corporate sponsorship outside of the equestrian community is high on Dave Mee’s agenda, not only to ensure the show’s sustainability but also to draw a broader audience and break down perceptions that the event is designed purely for horse enthusiasts. “Currently HOY’s funding base is strongly supported by the equestrian community, and while it is a good community it simply doesn’t have the funding clout of the big multinational corporates. We’re aiming to raise the bar with a lead-in timeframe for some new sponsors of the 2017 show,” said Dave. Preparations are now well underway ahead of this year’s Farmlands Horse of the Year and Dave knows all too well public expectations are high.

The pair has been successfully leveraging their Forbes and Co. brand off Hastings’ Horse of the Year show for the past 18 years, a partnership both feel has been pivotal in promoting their business in the highly competitive equine supplies market. “We’ve watched HOY grow from a small event to the amazing event it is today and we’ve been along for the ride the whole way. It’s now perceived as one of the best shopping experiences on offer anywhere in the country so we always try and go in with enticing specials to meet the market there,” says Clare.

“I wouldn’t have put my hand up if I wasn’t confident that we could pull off a great event, but I am aware of the challenge.“ – Dave Mee

“Most people are comfortable with our arrival and have made us feel supported; however, it would be remiss of me not to acknowledge the legacy Event Pro has left. We want to enhance the amazing job they have done and with such a passionate vibe from the Hawke’s Bay community there’s a great opportunity to add some fresh elements.

They’re right. Nowadays HOY attracts every type of consumer, from the horse lover to the shopping fanatic. It’s even better when they’re shopping-fanatic horse lovers, with Forbes and Co.’s trade stand one of 200 poised every year to satisfy their every need. Though it’s a financial and physical commitment for Blair and Clare, having a presence at HOY more than pays off.

“I wouldn’t have put my hand up if I wasn’t confident that we could pull off a great event but I am aware of the challenge.”

The well-established supplier of equine saddlery, tack and country clothing reported its strongest turnover yet at last year’s HOY. While small by comparison, Blair and Clare fly their flag with competitive flair, backing their industry experience and astute product knowledge to stay profitable despite the industry’s tight margins.

There’s No Business Like Show Business Hawke’s Bay’s affiliation with Horse of the Year goes back a long way, so too does Blair and Clare Forbes’ history with the event.


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saddlers are a dying breed with only a handful of successful saddlers left in the country.” As Christmas is to the rest of us, Horse of the Year is to Blair and Clare. The pair hopes to continue aligning with Hawke’s Bay’s highestprofile event for many years to come. And why wouldn’t they.

Clare and Blair Forbes

When the Forbes’ children quit the show jumping circuit several years back, Clare couldn’t part with the family’s horse truck. Every March it takes on a new life, filled to the gunnels moving shop merchandise to and from the Hastings showgrounds. Trading at HOY is very much a family driven affair for the Forbes team and helped by their wonderful staff, it’s all hands to the pump. “It is hard work and we do end up exhausted but it’s a once-a-year opportunity to promote ourselves. We’re looking forward to getting onboard with the new event managers and are sure it will continue to grow in stature. It’s a well-oiled machine now and we strongly encourage Hawke’s Bay to get behind it.” It’s a dream come true for Clare to work in an industry so close to her heart. Once a successful point-to-point and steeplechase jockey in the UK, Clare Forbes has never been far out of the saddle and Blair jokes that she landed on her feet when she met him at a Wairoa woolshed party in 1986.

From well-established vendors to newer kids on the block, trade spaces at Hastings’ Horse of the Year show are hot property. When a mystery horse cough broke out at the grounds last year, Hawke’s Bay’s equine herbal medicine specialists BetaVet swung into action using their Equi Cough and Echinacea Premier products to successfully stem its spread. As a result, sales of their products were up more than 400 percent on their first year of trading at HOY, six years ago. Obtaining good results and word of mouth among some of racing and show jumping’s biggest names have helped drive sharp growth for BetaVet over the past two years. Managing director Kate Fraser and medical herbalist Paul Mitchell are the brains behind the successful emerging brand and say HOY has helped to position their business.

The brand’s manufacturing and distribution are currently undertaken in Christchurch but with plans afoot to move their manufacturing arm to Hawke’s Bay, BetaVet will soon be exporting to Australia, the US and Hong Kong. “Horses are athletes and like humans, the same principles apply. Our products are not performance enhancers, they are designed to support the health of horses through times of stress and the rigours of competition they endure week in week out.” BetaVet’s bestsellers include Prepare – a nourishing tonic to manage stress, maintain energy production and assist in recovery – GG Calm Paste and Steady Neddy. At HOY, BetaVet’s enquiries to sales conversion rate sits at well over 90 percent, making the show a profitable proposition. “Very few people leave our tent emptyhanded. Our products are an investment but people have faith and trust in what we’re doing and trust that the products are going to work,” says Paul Mitchell. www.hoy.kiwi

“From a sales perspective, it’s really beneficial having HOY as a platform to build on our local industry support. Trading there offers a good opportunity for people to quiz us on particular products and provide all important feedback,” says Paul. Paul and Kate spotted a gap in the equine herbal medicine market several years ago, noticing a demand for crude extract forms of herbs that weren’t

Paul Mitchell ATTN13PRO1407

There’s good reason why this family business has survived so long, a combination of integrity and extraordinary expertise has helped forge the Forbes a loyal following. Saddle fitter Blair is famous around these parts, not just for his specialised repair skills but his wry sense of humour, often seen entertaining his customers (and Clare on the odd occasion!). As Blair puts it: “True

“Anything to do with horses is always moreish to us, we’re dealing with nice people who share the same passion.”

dried. From his Bridge Pa base, Paul uses his herbology expertise to formulate a unique line of liquid products that are more stable, preservable and of higher potency.

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Jetstar Takes Off calls for business community to support

Sustaining competitive air travel comes down to us all There were celebrations when Jetstar confirmed Hawke’s Bay as one of four new regional routes the Australian-owned airline identified as part of its expansion plans, and since the first Auckland to Napier and return flights started in December last year, bookings have been solid. However, many see that getting a second major airline into the region is only the first battle won, keeping both Jetstar and Air New Zealand here is the real challenge. Business Hawke’s Bay (BHB), the region’s business-led economic development agency, was just one of the many parties that lobbied hard and assertively behind the scenes to convince Jetstar management that this region demonstrated the growth needed for a financially viable option. Representatives from Hastings and Napier councils, HB Tourism and BHB all contributed to the proposal that helped secure the service. “We all knew though, that it’s not just a second major airline committing to servicing the region that is the answer, the real challenge is to ensure that each and every airline operating here can be financially viable on an ongoing basis,” says Susan White, BHB’s CEO.

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In addition to the two major airlines, Sounds Air is now operating a Blenheim/Hawke’s Bay service and Kiwi Regional Airlines was to make a decision on either Tauranga or Hawke’s Bay as a route kicking off in February 2016. “It’s critical that for sustainable competition to be maintained throughout the year, the Hawke’s Bay community, and business people in particular, need to embrace air travel as an alternative to driving, and keep flights across the multiple airlines now servicing the region at the financially critical levels. “If we don’t, we run the risk of losing one and saying goodbye to the choice and competitive pricing we are now starting to enjoy,” says Susan. Although it’s early days for solid data on the bookings across the two major airlines, passenger numbers had increased 17 percent at Hawke’s Bay airport since Jetstar’s September announcement, Jetstar head of New Zealand services Grant Kerr told an Icehouse business luncheon in early December. Business travel is estimated at 60 percent of traffic through the airport and although tourism numbers may increase as a result of tourism strategies, the business market looks likely to also grow.

Susan White

FEBRUARY - APRIL 2016

In a survey conducted by BHB as part of its lobbying campaign, 94 percent of local business respondents indicated they would fly more often if fares were consistently lower, with 33 percent looking at between one and five extra flights during the year and 30 percent increasing flights by six to ten.

Mike Purchas, a BHB board member and long-time campaigner for more affordable air travel ex-Hawke’s Bay, says businesses now need to step up and do just that. “Whenever a monopoly exists, people are often sceptical about whether they are getting a fair deal. Competition solves this. If we want a long-term solution, we need competition to remain here for the long-term. The only way that will happen is for it to be commercially sustainable for the airlines. “The economics of reduced airfares on the propensity of people to travel is well understood. Hawke’s Bay has sufficient population that we can expect to see passenger numbers grow as a whole through more affordable air travel.”

“Having more affordable airfares helps businesses save money or do more with their travel expenditure.” – Adele Rose, 3R Group

Mike also observes that underpinning community support was the need for all airlines to deliver on-time performance as this was a paramount consideration, especially for the business market. Marijke Zwaagman, a director with Fresh Perspective Leadership, is based in Auckland but has a business partner working here.


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supply of services, with a specific focus on airlines and regional stakeholders. “As well as facilitation and liaison with the various parties, we’re expecting specific actions to be identified that will contribute directly to business people making and sustaining their connections outside of the region,” says Susan.

Grant Kerr, the head of Jetstar Australia NZ

She says that now that flights are “significantly more affordable” she will be increasing her visits to the region. She also suggests that businesses could more readily access expertise not necessarily available in Hawke’s Bay, connecting with competencies and skill sets elsewhere more easily and affordably. A former marketing director of Auckland Airport, Marijke, along with her Fresh Perspective colleagues, worked with BHB to provide insight into how carriers make their decisions and what sustainability may look like for them. It was important for the

region to realise it isn’t a case of ‘backing one horse or the other’; all carriers need to make a profit and that way, everyone wins, she says. BHB, with support from Hastings District Council and Napier City Council, is now heading the charge to support business connectivity outside the region and in so doing, helping to sustain competition in the air carrier market. A one-year fixed-term role for a strategist is currently being filled to help match the demands of business travellers with the

“This is vital for business growth and in turn, will be reflected in increased numbers of air passengers, critically leading to financially sustainable outcomes for the airlines.” While the work of this strategist is a longerterm proposition, in the shorter term local businesses are starting the good fight. Adele Rose, 3R Group CEO, told the recent Icehouse lunch guests that for the first time, 3R could afford to send a team of 12 Hawke’s Bay-based staff to Auckland for a group-wide strategy development session and take the opportunity for relationship building customer and stakeholder visits. “Having more affordable airfares helps businesses save money or do more with their travel expenditure. 3R falls into the latter camp – we’re definitely looking to grow what we do.”

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Empowering Business in the Central Region

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The Business of Harvesting Trees in Hawke’s Bay By Vivienne Haldane

Pan Pac Forest Products Ltd (Pan Pac) is the largest forestry grower in Hawke’s Bay. They manage 35,000 hectares of their own forest from planting through to harvesting, transport and marketing of logs. Owned by the Japanese company Oji Green Resources – a subsidiary of OJI Group Holdings, Pan Pac was established 43 years ago at Whirinaki, north of Napier. The Pan Pac forests include the local exstate forests. From north to south these are Mohaka, Esk, Kaweka and Gwavas. Tangoio, the other substantial forest, is coastal and located around the Pan Pac mill and Waipatiki. Other large forestry businesses in Hawke’s Bay-East Coast region include Matariki forests, Roger Dickie (NZ) Ltd and Juken (NZ) Ltd, with the latter processing and exporting wood from its Gisborne base. Small-scale forestry forest owners in Hawke’s Bay comprise 42,000 ha collectively, according to an MAF report published in 2008. The report said, forestry harvest in Hawke’s Bay was likely to increase from a current level of 1.7 million cubic metres to 3 million c. m. after 2021, so is this still the case? 32

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“The current harvest is more around the 2 million mark and Pan Pac is consuming around 800-900,000 cubic metres of that, therefore, it sits at about 45-50 percent of the total demand,” says Doug.

Photo by Richard Brimer

The Profit spoke to Pan Pac Forest Products Ltd managing director, Doug Ducker, to find out from their perspective on the current state of forestry harvest and what the future looks like, in Hawke’s Bay.

The volume growth results from forests planted in the early 1990s and to date, one rotation, or nearly 30 years, of harvesting has been completed from the base forests. Access roads and tracks have already been constructed and replanting has taken place in line with Pan Pac’s policy of sustainable management and long-term investment. So what’s happening currently? “From a Pan Pac view point, we have a continuing demand for wood as we expand our operations, both in our sawmilling and pulping activity. However, with the high levels of export that have been generated over recent years and the nature of the Hawke’s Bay plantings, the wood resource supply is tight. So while harvesting is strong, it is also constrained because there is only a certain amount to be harvested. It reflects a combination of some wood that’s been brought forward a little earlier countered by some we anticipate to be there that isn’t there. There has also been strong export demand over recent years. Log export pricing currently remains high although there is some expectation, given the high dependency on China, both the demand and pricing will reduce in 2016.” According to Doug, the forestry business in Hawke’s Bay has been stable over the past 20 years and “while tight for the moment,

Doug Ducker

is anticipated to expand to another level through 2020. There’s a lot of growth opportunity for employment and for wealth to be generated off the land.” “Living on a main route in Central Hawke’s Bay, I’m able to witness the daily number of logging trucks. By 7.30am, several have already rumbled past with their loads. And if you’re driving on a country road, you’re certain to encounter a logging truck along the way. “What you’re seeing in this region is the wood, from trees planted in the early 1990’s, starting to come up from further south, such as the Dannevirke area. While Pan Pac’s major harvest area is currently north


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In lumber, Pan Pac has recently introduced a new drying process that has enabled a further use of Clear Wood, a pruned resource currently used for high-quality trim on buildings and furniture. “We are certainly exploring new opportunities where we can,” says Doug. Pan Pac Forest Products Ltd Quick Facts: • Pan Pac is an integrated forestry company. It owns forests, a sawmill and pulp mill, and a chip export facility in Hawke’s Bay.

of the mill, Southern Hawke’s Bay is the next developing region,” says Doug. What’s needed to enable the continued growth of the forestry industry in Hawke’s Bay then? “There is certainly substantial Photo by Design Studio infrastructure needed, both with equipment and people. The development and retention of good people is important. Pan Pac is able to support that generally because it has stable consumption and stable demand. We’re not dealing with the peaks and flows that might come with export markets.” Pan Pac is looking to consolidate and retain people as the harvest in Hawke’s Bay increases

significantly. “By 2020, there will certainly be increased volumes of wood available and having skilled and capable operators for its harvest and use is very important.” Another challenge, he says, is determining the ways by which Pan Pac can utilise the timber resource, “adding value to the logs rather than seeing them exported as logs; turning them into lumber and pulp is a far better option than just exporting them.” Four years ago, pulping operations at Pan Pac were converted to a new pulp grade in order to open up market opportunities over a greater range. The demise of newsprint on a global basis means Pan Pac is able to switch to a pulp grade that can be used for high-quality packaging in the form of carton board.

• Pan Pac converts around 2000 cubic metres of logs every day, 250 days per year producing over 400,00 cubic metres of lumber per year. • The forests are almost exclusively radiata pine, grown because they can provide the quantity and quality of raw material their sawmill and pulp mill requires. • As an industry Pan Pac is a substantive employer for this region, employing 370 staff, 450 contractors, plus engineering support. “Pan Pac supports maybe 3-4000 of the Hawke’s Bay population. The forest industry would probably support another 1000 people on top of that,” says Doug. Source: Hawke’s Bay Forest Industry and Wood Availability Forecasts, Ministry of Agriculture and Forestry, 2008. Author: Dr Bruce Manley.

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LIQUID GOLD SET TO LURE FARMERS BY DAMON HARVEY

Hawke’s Bay hill country farmers are being asked to consider planting high UMF Mānuka on marginal land, creating for many a much needed alternate revenue stream as well as protecting their farmland and water catchments. New Zealand Mānuka honey is in high demand throughout the world but its quality has come into question as businesses take advantage of the ‘mānuka’ brand. Earlier this year a UK study revealed that almost half the mānuka honey sold was fake. Around 2500-3000 tonnes of mānuka honey is produced in New Zealand each year but 6500 tonnes is sold by retailers. Unquestionably the world is demanding more and more Mānuka honey and at the moment New Zealand can’t keep up with supply. The High Performance Mānuka Plantations Primary Growth Partnership programme (PGP) between the Mānuka honey industry and Ministry for Primary Industries aims to improve yields, output and value of Mānuka honey and grow exports from $217 million to more than $1 billion by 2028. By 2026 the programme’s aim is to double the number of hives and production yield

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Mānuka Trial Site at Tutira

per hectare as well as double the proportion of Mānuka honey capable of sale as a medicinal product and double the land area in Mānuka that is economically accessible for beekeepers. Mānuka with the highest antibacterial activity of UMF 20+ can earn as much as $150 an export kilogram and potentially double that on retail shelves overseas. Hawke’s Bay already has a trial plantation of high performance mānuka trees at Tutira as part of a trial stretching across 11 commercial sites and about 470ha of land around the North Island. The Hawke’s Bay Regional Council is a co-investor in MRPL alongside New Zealand’s largest exporter Comvita, Taihape beekeepers Don Tweedale, Landcorp, Aborex Industries, Nukuhau Carbon Ltd and Maori Trustee Te Tumu Paeroa. The science partner is Massey University.

Hawke’s Bay Regional Council land service manager Campbell Leckie says the council has become a project partner and investor as it looks to protect the region’s hill country landscape and its spill of sediment into water catchments as well as creating a new revenue stream for farmers. There is about 150,000 hectares of pastoral farming land that is regarded as providing a marginal pastoral return but could be ideal for harvesting Mānuka. “Large areas of this land could well get a better economic outcome for the farmer and a better environmental outcome because the soil isn’t slipping off the slopes in bad weather.” From an environmental perspective Campbell says the council has identified farmland where there’s a risk of sediment and phosphorus running into local rivers and waterways.


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Mānuka is ideal for steep hillsides

“You would go and target these areas that you would get the best result from an environmental context. If you have a catchment with a lot of sediment coming down and phosphorus, that would be where you would start having discussions.” Although MRPL says 20ha of land could be economically developed into mānuka plantings, 30 to 50ha will be more economically viable. He warns that the commitment doesn’t end in planting mānuka but also ensuring you are creating a healthy environment for bees to flourish and produce high UMF honey. “What people need to think about when planting mānuka is creating a holistic picture. If you establish a plantation but your bees aren’t healthy, you won’t be able to harvest honey. “If we want a thriving bee industry based on high UMF honey driving some great outcomes for the region then farmers need to realise that it’s a 12 month programme with a short honey harvest of six to eight weeks. “You need a place for bees to winter for the rest of the year and you need inter-plantings of the right species in the plantation so bees can forage for protein and things like that,

so they are strong enough to harvest honey.” To motivate farmers to participate, MRPL is aiming to prove there is a sound financial business case for Mānuka plantations on unproductive and marginal land such as hill sidings, which are susceptible to erosion. Establishment costs are between $2500$3000 a hectare and the landowner is also eligible for carbon credits of $6 a tonne. The minimum size land area a farmer can plant to make it economically viable is 20ha, which equates to approximately 30 hives. MRPL is also promoting funding support opportunities as well as a range of resources that will help farmers grow Mānuka. Farmers can also run ewes and lambs in the plantation once the trees become established after 3-4 years, with the plantings providing good shelter for stock. A range of different Mānuka cultivars are being tested for growth rates, disease resistance, flowering ability and diyhdroxacetone (DHA) level in nectar on the 11 sites. DHA is the chemical that produces the unique Mānuka factor (UMF) in the honey. UMF contains antioxidants and inflammatory enzymes.

On the export scene, it’s the UMF value that drives the value of Mānuka in the international market. The higher the dihydroxyacetone in the nectar, the higher the price. For landowners, they could earn $200-380ha once the plantation has matured. Neil Walker, through his family-owned company Nukuhau Carbon Ltd is an investor in land producing Mānuka honey and has a real desire to make places like back country Taranaki as prosperous as what has happened with black gold (oil) and white gold (dairy) in Taranaki. He is also a six-term Taranaki Regional Councillor. Neil, like the project’s other partners is determined to see the Mānuka Honey industry reach its potential. “We are trying to get the Mānuka honey industry up $1.2 billion by 2026 and this is still our target. This means about 30,000 hectares of land planted in Mānuka and that’s possible when you think of vast areas of unproductive land, especially in hill country,” he says. He hopes to see farmers consider Mānuka as a viable option and he pulls no punches when it comes to those who might sit on the fence. “There are always people who will sit on the fence and be conservative and be starving. “If they don’t want to do something, nobody can make them, but we’re talking about sides of hills that are class 6 and 7 land and that kind of land is completely useless in the economics of their farm,” Neil says.

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NAPIER PORT MAKEOVER GETS IT SHIPSHAPE FOR BUSY EXPORT SEASON As Hawke’s Bay hits its busy fruit harvest period, Napier Port is in the best shape it’s ever been to handle the increased influx of trucks, containers and ships that will move produce to all parts of the world. The pipfruit industry predicts a four percent increase in apple volumes in 2016, with this rising to 17 percent in 2017. Nationally 332,000 tonnes were exported in 2015. Over the last year the Port has invested $34 million in its processes and infrastructure to help build terminal capacity and ensure it can handle both the region’s growing cargo base and the 13 international container lines calling at Napier Port. Napier Port chief executive Garth Cowie said the Port’s investment for the year included two Terex mobile harbour cranes; the commissioning of an off-port empty container depot near the Expressway; introducing a vehicle booking system; maintenance and capital dredging; building the Port’s new main administration office; 36

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purchasing New Zealand’s first mobile harbour crane simulator; establishing a new inland port freight hub in Palmerston North; and paving the 6.5 hectare main log yard. “The investments made throughout the year have resulted in increased productivity. Trucks are being processed faster and more containers loaded per hour during the peak export season - from summer through autumn when pipfruit is exported and when demand for space is at a premium,” Garth says. This year the Port processed for the first time ever more than a quarter of a million TEUs (twenty-foot equivalent units), up 16.5 percent on last year’s record. “In the next 10 years we need to continue our commercially-focused investment programme to ensure we can continue to efficiently service our region’s exporters and importers as volumes grow and the international shipping industry continues to evolve. “We’ve identified the best, most efficient answers to the challenges and opportunities presented and with upskilling our people and adding new highly skilled people, we can service our customers to the levels they expect,” he says. Staff numbers at the Port increased by 33 fulltime equivalents. One initiative the Port is particularly proud of is the faster truck turnarounds and vessel exchange rates. The Port’s commercial manager Andrew Locke says the container terminal gate facilities and processes were upgraded to help build capacity and reduce processing times

and a new vehicle booking system (VBS) was introduced after close collaboration with transport operators. The entrance gates were moved further into the Port while additional truck queuing lanes were added and intercoms installed. During the peak of the season the Port opened its container terminal and Thames Street depot longer to help meet demand.

“We welcome the improvements the Port is making to support us in meeting the growing global demand for our products. Napier Port is a critical part of our supply chain and we rely on it for our products to get to market quickly, cost-effectively and in the best condition,” – Doug Ducker

Andrew says the VBS will be a key tool in the future as volumes grow and when space is at a premium. “We can ensure truck turnaround times remain realistic during the peak season, allowing potential cost savings for transport operators through efficiency gains and the ability to plan their deliveries more accurately. “It also allows the Port to more efficiently match terminal capacity with programmed demand.”


Already the truck turnaround times are nearly 50 percent faster and the vessel exchange rate is also up. One of the largest pipfruit exporters out of Napier Port, T&G and its group shipping manager Simon Beale agrees that on-port improvements as well as moving the storage of empty containers to Pandora have improved the flow of containers to the Port. “There was congestion issues and that had an impact on turnarounds as well as additional costs of downtime with fewer truck movements between our coolstores and the Port. “The round trip is usually about an hour but it was taking a lot longer. The Port worked with trucking firms to come up with a range of solutions and we’re now seeing the benefits,” Simon says.

Senior crane operator Phill Taana says, “the simulator gives drivers the opportunity to up-skill, practise difficult scenarios and build their confidence in a safe environment, without using valuable equipment. “It’s also cut down the crane operator selection process by about 90 percent, we know very quickly if someone has the right skills and hand-eye co-ordination for the job.” One of the most visible improvements at Napier Port has been the opening of the new main administration building. Garth says the new building brings port staff closer together in a safer, purpose-built and future-proofed building.

• Rearming of Napier Port’s breakwater to provide increased protection from heavy seas and swell events, and repairing the beach seawall to ensure the continued safe use of the beach by the public. • Napier Port completed a thorough review of the main
Container Berth (No. 5) Wharf to develop a forward maintenance programme and extend the life of the wharf, and completed
the maintenance programme for No. 2 Wharf. • Napier Port is participating in a dredging agreement with other New Zealand ports that will provide security in the supply of dredging services at internationally competitive rates.

Pan Pac Forest Products managing director Doug Ducker is also pleased with the changes.

• Napier Port’s new seven hectare offsite empty container depot in Napier’s industrial area of Pandora was opened in December 2014 and has increased overall empty storage capacity by more than 25 percent, with the depot able to handle around 7,000 empty containers at any one time, freeing up around 4,500 TEUs of terminal space on port.

“We welcome the improvements the Port is making to support us in meeting the growing global demand for our products. Napier Port is a critical part of our supply chain and we rely on it for our products to get to market quickly, cost-effectively and in the best condition,” he says. In collaboration with Port Flinders in Adelaide and Ports of Auckland, both of which are commissioning their own simulators, Napier Port has a world-class, state-of-the-art crane simulator to train new drivers and continually develop the capability of existing mobile crane drivers in a safer, more effective environment. The simulator is the first of its kind in New Zealand and it offers the most realistic simulations in the world today. It is an exact replication of the Port’s shipside and crane operating environment.

OTHER INVESTMENTS AND DEVELOPMENTS THIS YEAR:

Garth Cowie

“For the first time in the Port’s history, nearly all corporate, operations (including drivers and planners), engineering and marine staff are working together and this has provided more opportunities for collaboration and the chance to find better answers to our customers’ challenges.” The new office is modern with significantly better IT solutions and capabilities, more facilities and state-of-the-art communication tools.

• Opening of the Longburn Intermodal Freight Hub in Palmerston North, a joint venture between Napier Port,
Ports of Auckland and Manawatu logistics provider, Icepak.
Longburn is a key initiative to help Napier Port attract cargo from
out of the region. It is also aimed to provide shipping lines with natural cost advantages by providing storage and depot services to a region that currently has few options.

Truck turnaround times are nearly 50 percent faster and the vessel exchange rate is also up FEBRUARY - APRIL 2016

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My 15 Step Plan to Management By Brent Paterson | Rural Directions

The demands of Human Capital are changing dramatically in the Primary Sector. This article is a suggested pathway for a future professional Sheep and Beef Manager. Individual starting points will vary, therefore jump in anywhere down the list but remember a key factor in this pathway are your Mentors! Suggested pathway: 1. Study Agriculture at School followed by a Tertiary Qualification (e.g. Lincoln, Massey, Telford, Taratahi, Smedley, Waipoa to name a few) and never stop training. 
 2. Gain as much Agriculture experience as possible in the holidays and weekends, and begin to grow your networks. 
 3. Create some personal disciplines and most importantly seek a mentor to assist with your journey. 
 4. Start to plot your course to get to the top of the industry (remember it’s unlikely to be a straight line) and begin to identify who to work for as your name will be attached to their brand and that will make a difference one day. 
 5. Land your first role with an owner operator who can teach you the craft of farming and help put together your team of dogs. Seek to understand the cycle of a farming business and focus on the fundamentals of the trade. 
 6. One or two years later consider a new role in a slightly different sort of system, finishing or breeding as opposed to what your first role was. 
 7. Ultimately, have some time on a stud operation to understand the value of genetics and how they influence a farming business. Also good to learn about animal EBV’s etc. 8. These first two roles may have helped you identify your true passion. If not, you will at least have started to fill your toolbox with a range of skills. 
 9. If your last role did not expose you to staff management ideally the next role will. Seek a role where you can gain experience in managing people, or at least working with them. 10. It is time to demonstrate your ability to turn grass and crops into meat and wool. Seek out an employer progressive 38

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in systems, be exposed to setting up rotations and understand summer and winter cropping. Start to really think about the value of feed, what each mouthful represents in terms of performance. Put Farmax into practice even if the boss doesn’t use it; get Farmax Lite cost free and run it on your computer. Start to generate some of your own intellectual property. 11. It’s time for some responsibility so get technical and put into practice what you have learnt so far. Be an expert in weigh systems and EID tags, understand NAIT transferring, farm mapping and keep up with new developments in technology. 12. In preparation for the next step, seek a new mentor if the one you had at the start is not up to date with the modern practice or does not have networks in the right places. The original one should promote this if they are doing their job properly. 13. You are now ready for the big step into your first Managers role. Your CV needs to be right, your networks alive and well and the referees prepared to promote you (and perhaps your wife and family). You will likely be looking for a role to express your skills, yet have the support of a management team or advisor. Consider a position on a 300700Ha property with the opportunity to work with management in setting budgets and ultimately where you will be given exposure to Cash Manager or Figured. Get experienced in managing contractors, running a farm and improving your skills across the board. Be mindful not to just sit back now and stop the personal development because you are too busy running the farm. This is the time to plan, then plan and then plan again. Planning creates time on the farm and farming is all about timing. It’s a great discipline to plan your days, weeks and months and have it recorded on a computer. You are creating your own brand now, people should want to come and work for you. 14. The big job comes up and now you are ready. You are a good stockman, you understand genetics, pastures and cropping, can manage people, are technologically proficient and know how to drive performance.

15. You see a role advertised by Rural

Directions or get the tap on the shoulder for that full Professional Managers role. By following this well-rounded pathway you are likely to have taken the right steps and will have invested wisely in yourself for future success. Without ticking all of the boxes in this pathway it may be difficult for you to get there. A key measure in farming comes in the form of the farm Profit KPI (Key Performance Indicator). By trusting in your learnings and following this process with a planned approach you will know how to deliver on profit. Wear the owners’ hat(s) and farm with the mindset the property is your own. If you are that good, one day you may have a share in the farm and be offered a pathway for your family. There is this document called a strategy and it makes sense that if you do the stuff right at ground level then the outcome should be profit. By this stage you may be getting exposed to the Board and be reporting to them on variances (sometimes through online skype meetings linking up people all over the world). The opportunities in the sector are enormous. If you have got to this stage you are now a Professional Farm Manager. You may now be the expert other people are seeking out to have as their mentor for their journey ahead. I am happy to take any calls with regards to this article and the whole Mentoring concept. Those that have their toolboxes full with these skills should call me now. . . I have the job for you.

Brent Paterson is the founder and managing director of Rural Directions- Primary Sector Recruitment & HR. His rural credentials are impressive from running a sheep stud and beef operation in Patoka, through to his involvement in Rural Directions subsidiary company, Primary Industry Management. To contact Brent, email – brent@ruraldirections.co.nz.


FIBRE BOOSTING SMALL BUSINESSES PERFORMANCE With the ever increasing range of internet providers now participating in the ultrafast fibre broadband market, small businesses are taking advantage of the competitive pricing to boost their business performance. From café’s to corporates – fibre is no longer the domain of large businesses with big data needs. Napier café owners Krista James and Ben Fernandez opened the doors to their new café, ‘Georgia on Tennyson’ in July. In addition to selecting a variety of premium coffee bean suppliers, one of their critical set-up decisions was to install a UnisonFibre connection through local telecommunications provider, NOW, rather than traditional ADSL. We chat to them about their reasons, and the benefits of a fibre connection for their small business. What was your main reason for choosing UnisonFibre over a traditional copper phone line and ADSL internet? As a business we wanted to use cloudbased software for all our transactions. We don’t have a till - everything is done on an iPad, and all the information is updated to the cloud in real-time. In order to use this effectively we needed a fast and reliable network connection. There were also cost savings, which for a small business, is key. One fibre connection can provide all our communication needs (internet, POS and phone), compared to needing up to three separate traditional copper lines. Instead of paying for multiple lines, we only pay for one.

Do you believe your business performance, and therefore profitability, has benefited by having fibre? Yes! Again it comes down to the ability to utilise the benefits of cloud-based software. Customer transactions are processed more efficiently with fibre. This makes the customer experience more streamlined and enjoyable. Also, the labour requirements are reduced - the time which it takes the customer to order and pay is minimal, freeing up valuable hands for other requirements! One of the real benefits for us is the freedom and transparency our online systems have given us. The speed and accuracy of the business operation is optimal, and the ability to see the realtime state of the company’s financial position, via our cloud-based accounting system, enables us to constantly make informed decisions, as well as monitor what is happening if we are away. For us, a fast and reliable internet means fast and reliable operations, ultimately freeing up valuable time that can be better spent focussing on business growth and development. Without a dependable network this wouldn’t be as achievable!

How did you find the process of getting fibre installed? The UnisonFibre team were brilliant, working closely with NOW to get us connected. Given the heritage status of the building we are in, there were a few challenges presented – plus the street behind the building needed to be closed in order to install the cable, but instead of adding delays, the UnisonFibre team went out of their way to work in with Council requirements, getting the work done in the evening. We were pretty stoked with their commitment to getting us up and running! It was cheap to install too - even with these work-arounds, it was still considered a ‘standard connection’ so it only cost a small admin fee to get fibre installed. Anything else you want to add? We make damn good coffee so come and have a latte!

BOOST YOUR BUSINESS Want to know how fibre can help your business? Visit us at:

www.unison.co.nz/fibre

Fibre provides us with all these benefits, so for us getting UnisonFibre was an obvious conclusion.

FACT FILE Georgia on Tennyson Café Network: UnisonFibre Telco Service: NOW 30/10 Ultrafast Cloud-based Solutions: • Vend for POS • Xero for accounting

A quality fibre connection enables café owners, Krista James and Ben Fernandez, to reap the benefits of cloud-based solutions.


Management rights game a winner for this couple In our last issue, Resort Brokers Australia revealed a striking statistic: more than half the unit buildings on the Gold Coast are run by expat New Zealanders. How so? We tracked down a Hawke’s Bay couple who took up management rights there over 20 years ago, and asked them why. Meet Ivan and Jan Hill, Napier born and bred. Ivan was a talented club rugby player and a sales rep for big companies including Coke and Unilever. Jan worked in banking. Fast forward a few decades. They’re living happily as resident managers of a villa complex five minutes from Surfers Paradise. It all began with a hankering to run their own business. First, the Hills bought an Onekawa bookshop, but Ivan wasn’t keen. “After being on the road as a rep, I just felt trapped behind the counter,” he admits. They persevered for five years before selling. So, what next? Like many, they frequently holidayed on the Gold Coast. Ivan’s parents owned a unit in Surfers Paradise. Jan recalled Ivan thinking the building managers had a great life. “He joked ‘I could do that job’. It looked easy, but we now know there’s a lot more to it.” Regardless, the seed had been planted. “After the bookshop, it was either move to Auckland or pursue management rights in Australia. The Gold Coast won,” Ivan laughs. But theirs was no rash decision. They spent three years “doing homework” and waiting for a reasonable exchange rate. “On every visit, we annoyed all the agents, asking to see management rights,” says Ivan. Finally they settled on a 24-unit holiday complex at Main Beach, Scalinada. It was 40

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“It’s been a great decision for us. We frankly can’t see ourselves doing anything else.” – Ivan Hill 1993 and the couple made the big move with two children aged under four. Armed with sales and administrative skills, the Hills built a strong business. Soon they expanded, buying rights to the neighbouring upmarket Seychelles tower. “It meant we could offer guests a variety of accommodation, from affordable to luxury units,” Ivan explained. “And we ran both from one office.” Main Beach was their home, workplace and playground for 10 years. By then, with a son and daughter, they needed more than a two-bedroom manager’s unit. Ivan and Jan were also ready for a change. “We were missing out on the children’s sports and activities because we always had to work on weekends,” Jan said. Not wanting to leave the industry, they decided to move from holiday to permanent residential management. After turning a nice profit on the sale of their dual-building Main Beach business, in 2002 they bought the rights to Madison Garden Villas, with 61 one-bedroom villas, recreation facilities and, importantly, a three-bedroom manager’s unit. “It has gone extremely well for us,” Ivan says. So much so, when it again came time to upgrade, they kept the villa complex and added a 36-unit building, Sea Bay Apartments by the Southport Broadwater.

Even with both complexes, the couple enjoys great work-life freedom and flexibility. Ivan handles the upkeep of grounds, pools and common areas while Jan spends up to four hours a day running the offices. With a full real estate licence, Ivan also manages a small portfolio of outside rental properties. They love the lifestyle, but caution it’s not for everyone. “You really have to enjoy interacting with people,” Ivan says. “It requires strong people skills, balancing and looking after the interests of both investor unit owners and tenants.” If you are a ‘people person’ though, management rights offers a neat home, income and lifestyle package. “It’s been a great decision for us. We frankly can’t see ourselves doing anything else. Even in retirement it can work because it is the sort of business you can scale up or down depending on your circumstances.” Most Kiwis in management rights on the Gold Coast came to it after a holiday experience or via friends in the business. And it’s nice to know compatriots in the industry. “We have friends who have just retired after 15 years in management rights, and it was very good to them too. They came from Hawke’s Bay as well. Now they’ve retired, we can ask them to mind our place when we want a holiday,” Ivan grins. That was a bonus during the 2015 Rugby World Cup when the Hills – still diehard All Blacks supporters – were able to catch a few games in the UK. Australian (dual) citizens they may be but still fiercely loyal when it comes to rugby! For a comprehensive guide to management rights in Australia, go to: www.resortbrokersaustralia.com.au


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Finance

Finance

Be wise with any financial Windfall

If you can’t manage your money now, what are you going to be like if you’ve suddenly got a lot? By Tobias Taylor | Spicers Portfolio Management

The fact that many lotto winners end up broke is no myth. Researchers analysed 35,000 lotto winners in Florida’s Fantasy 5 lottery from 1993 to 2002, and found 1,900 winners went bankrupt within five years. Sharon Tirabassi won $US10 million in lotto. Nine years later she was working part time and catching the bus to work so she could make rent payments. The researchers surmised that financial literacy was an issue, as was their attitude more reckless to winnings than it may have been to earnings. The decision to remain in your job after a windfall may actually contribute to you staying happy. But that aside, the biggest downside to a large windfall is stress. Demands and advice from family and friends, fear of losing the money again and a flood of people asking for money. A NZ example

In 2012 Trevor Cooper from Te Kauwhata, went public about his huge win but went into hiding not long after when people started begging him for money. The checkout operator at the Huntly Countdown had vowed to keep working but he left his job, saying he was overwhelmed by the media’s interest in his $26.5 million windfall. The psychological pressures are enormous. Even TradeMe founder Sam Morgan told media that trying to maintain equilibrium is very hard, no matter how much you tell yourself that the money won’t change you. So what is the best way to handle a sudden large amount of cash in your bank account?

Four practical steps you may want to consider in the event you come into some money:

• Get financially smart now. Don’t wait on the off chance you come into a serious amount of cash to get yourself out of trouble. If you can get yourself financially sorted now and can effectively manage what money you do have now, you’ll be much better for it in future. • Take a break. Give yourself some time to pause, take stock, think… get used to the thought of having all that ‘extra’ money. Do nothing for as long as possible, to avoid acting on impulse. Some people who have previously received big windfalls suggest not doing anything lavish for at least the first six months – it will give you breathin room to take advice and make some considered decisions about what you want to do. • Consider remaining employed: A 2013 US study found that most Americans, 51 per cent, say they will remain employed in the event of a sudden windfall, because they would become bored or because work gives them a sense of purpose and accomplishment. According to the author of ‘Why We Work’ Barry Schwartz, earning an income is the least important reason for getting out of bed every morning. Hence, any windfall we may have is not going to quench our essential need to work. Besides giving you breathing space to pursue the career of your dreams, work is integral to our self esteem and sense of purpose.

• Tell as few people as you can. The more you tell, the more chance you’ll have people come knocking and asking. Remember Trevor Cooper went into hiding soon after going public with his big lotto win – the same advice applies whether you won, inherited or earned the money from the sale of a farm or business. Author and playwright Michael Bassey Johnson said it best when he said: “Pretend to be poor in reality and you’ll notice a decrease in your friends list”. • Get yourself a team of expert, professional advisers (e.g. a financial adviser, lawyer, accountant and tax expert). People who are properly registered and bound by a code of ethics will be able to give you advice and assist you in making the right decisions. Remember that money does not make happiness or misery, it’s what you do with it that counts. Sources: Careerbuilder.com – Half of U.S. Workers Would Keep Working if They Won the Lottery, stuff.co.nz – Who wants to be a millionaire? wiseoldsayings.com – Fake Friends Sayings and Quotes.

Tobias Taylor is an Authorised Financial Adviser (AFA) with Spicers Portfolio Management. He has more than 15 years’ experience providing financial advice and is based in the Hawkes Bay area. To contact Tobias email tobias@spicershb.co.nz Tobias Taylor has a disclosure document that is available on request and is free of charge. The information in this article is of a general nature only and is no substitute for personalised advice. To the extent that any of the above content constitutes financial advice, it is class advice only. If you would like advice that takes into account your particular financial situation or goals, please contact your Financial Adviser.

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Managing and providing for urban growth By Cameron Drury | Cheal Consultants

The Heretaunga Plains Urban Development Strategy (HPUDS) has been prepared through a combined effort by the Hastings District Council, Napier City Council and Hawke’s Bay Regional Council. Adopted in 2010 it provides a regional based strategic approach to urban growth through to 2045. The aim of the strategy is to ensure that local authorities work together to plan and manage urban growth on the Heretaunga Plains while recognising the value of the soil resource. Its primary goal was to ascertain and provide for projected growth over the next 30 years and beyond by identifying: • population growth rates, • where growth will go and its desired density, • what the sequence of development should be and the timetable/or triggers, • the criteria for establishing the boundaries to urban growth, • what infrastructure is needed, particularly transportation and drainage services, • Budget implications. HPUDS has resulted in the establishment of an Urban Development chapter in the Regional Policy Statement and changes to both the Hastings and Napier District Plans. It’s at the core of our local planning regime, but is it understood, and do we have confidence in meeting growth demands; particularly when we have people lining up overnight to purchase sites in the latest release of sections in Parklands, and seemingly escalating section shortages in Havelock North and Hastings.

Cameron Drury is a Full Member of the New Zealand Planning Institute and a Senior Planner with Cheal Consultants with the role of Regional Manager of the Hawkes Bay operation. Email Cameron at cameron@cheal.co.nz. Cheal provides expert services in the fields of Planning, Surveying and Civil, Geotechnical and Traffic Engineering. Offices are located in Hawke's Bay, Taupo, Ohakune, Taumaranui and Rotorua.

It seems to the outsider that areas of land suitable for development are still tied up, and that despite the councils strategies there is a lack of choice, and worst still for the region, a lack of attraction or ability to take up the very lifestyle opportunities we are marketing. As a region, are we missing out on growth and development and are we realising our true economic and social potential. We will only develop momentum once there is space or opportunity for it. Is HPUDS simply too tight? Although developed with the best intentions, are we applying it too stringently and throttling ourselves? Have things moved on so fast that the core principles on which it was developed are now lower in priority? Is there a willingness to respond? It would actually be quite interesting to put HPUDS aside momentarily to make some observations and traverse lessons learnt over the last 5 years i.e. • The impact of natural hazards – is it too expensive to have the luxury of being risk adverse, or is this a necessary cost? • How communities respond to natural disasters – given New Zealand can’t get away from them, should we stop looking to avoid them and focus on better approaches to managing them? and what is the balance of risk? • Is the loading up of building requirements necessary, or are we over reacting to make ourselves feel better. Is the fast approaching impossibility of the kiwi dream going to be of our own making? • Cost of infrastructure – should we be squeezing everything out of existing

infrastructure we can before looking to develop new areas – should this be the governing factor? Or is more efficient greenfield an appropriate response? • What can be done physically to provide a platform for growth in addition to preparing strategies and plans – if there are obstacles to good ideas let’s resolve them so the market can pick up opportunities with greater certainty, • What’s the influence of individual land owners on the release of land? There are a number of challenges and influencing factors affecting strategic planning that have become evident since HPUDS was finalised. Having considered these matters we could bring HPUDS back into the fold and see how it sits, and whether it’s nimble enough to see us through. Is there an appetite to undertake a full review of HPUDS, if not, why not? Are the communities’ demands and expectations being met, and how can communities of interest express their voice where there is no prescribed engagement process for this nonstatutory document, even though it’s at the core of our statutory frameworks? As I mentioned in my last column, prescription and flexibility – it’s always going to be a fine balance, but in our case perhaps we should be tending a little more towards flexibility, particularly when in more cases than not the release of land has more to do with the owners of that land than a ranking in a strategy. Sure, we need to plan – that’s been proven over centuries, but we also need to give ourselves options, learn and adapt.

FIRST AID TRAINING Keeping your business SAFER. Wairoa Napier Hastings Waipukurau

0800 RED CROSS www.redcross.org.nz 42

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PRO IT

Technology trends for 2016 By Wray Wilson | Need a Nerd

Remember your grandparents saying that life just seems to get faster and faster as you get older? Maybe that’s why they drove slower and slower. Technology might just have something to do with that. The pace of change in technology always seems to accelerate and, like Auckland house prices, shows no sign of abating. In 2015 we saw many new devices and technologies that only a few years ago would have seemed the stuff of science fiction. But what does 2016 hold? Here are a few of the trends and technologies that are predicted to have a big impact on our work and home lives: 1. 3-D printing – 3D printing isn’t as pervasive in our lives as was predicted a couple of years back, but new printing materials mean that they will be shortly. Engine parts and body parts are already a

reality and the commercial applications for 3D printing seem limitless. 2. Security – security online will be an even bigger issue than previously. Many of us play lip service to online security and place our trust in others without so much as a thought. Everyone is wrestling with security – be it at government, corporate or personal level and there are still and will continue to be, huge risks around data, financial information and personal information. 3. Robotics – self driving cars are only the beginning. 2016 will see robots (and machine learning) continue to exceed human abilities at many tasks. Humanity is going to have to take it up a level in order to remain relevant, and the rise of robotics replacing tasks traditionally carried out by low skilled labour could lead to increasing social and civil unrest

4. Meshing – device proliferation and the inability of individual pieces of technology to talk meaningfully to each other has always been a bugbear. 2016 will see far better ‘meshing’ or co-operation between different applications technologies. Meshing will enable far more coherent ‘intelligence’ to be collected about patterns in our daily lives – just think how much data is probably being collected about you by your smartphone. It won’t be long before Jenny Craig is collecting data from your fridge on what you’re binging on in the middle of the night. 5. Glitches – while we’re all used to software bugs, the rapid advancement of technology and the race to get to market means that pre-release testing is being kept to a minimum and so we can expect to see more ‘glitches’ in future. This might be an outage on your Netflix or your public transport scheduling and information service going haywire.

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6. Virtual reality – virtual reality will make its mass debut in 2016 with many of the big manufacturers lining up to release consumer level devices. Whether it’s in health, education, work or play VR will be the next big thing. Technology pervades every aspect of our lives. Be careful how you use it – be particularly mindful of how much of your personal and corporate information you share because there is bound to be someone watching. And it won’t necessarily be from a drone.

Wray Wilson is the chief executive of Need a Nerd. Need a Nerd is a nationwide technical sales and support business to the SME and residential market. Email wwilson@needanerd.co.nz FEBRUARY - APRIL 2016

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EDUCATION

Changing of the Guard for EIT Computing School When Steve started at EIT, computing technology was beginning to transform the way in which the world communicates and does business. “Computing,” he says, “was the coming thing.” Joining EIT, he had already carved out an impressive career. The Bachelor of Science graduate progressed to teacher training and then taught mathematics and physics in schools in the Horowhenua before joining the Royal New Zealand Navy as an instructor officer in maths and computing. Promoted to Ministry of Defence headquarters, he started at the bottom in the computing department and was assistant director when he retired from the forces at the age of 39. Steve then taught computing at Wellington Polytechnic before he and wife Shirley decided to relocate to Napier because her mother, living in the Bay, was unwell. It was to be a short-term move, but he doesn’t regret staying on. Retiring after 22 years, Dr Stephen Corich has passed over the key – or in this case, the keyboard – to his successor, EIT’s new Head of School Computing, Rebekah Dinwoodie. Appointed Head of School Business last year, Rebekah now combines that role with managing the computing school, building on the strong linkages and synergies between the two.

EIT think tank EIT’s degree and post-graduate programmes are underpinned by quality lecturer research activity, which directly links to their teaching. Ranked in the top two polytechnics/institutes of technology, independently assessed EIT academic staff research performance is held in high regard in NZ.* * Official ranking of The Performance Based Research Fund (PBRF) audit by the Tertiary Education Commission every six years. Above image: Experiencing the Ill-Defined: Student Centred Learning. Cheryl McConnell, Gillian Postlewaight, Bachelor of Teaching (Early Childhood Education) lecturers.

0800 22 55 348 | research.eit.ac.nz

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“Hawke’s Bay is New Zealand’s best-kept secret. It’s got the climate, it’s friendly and there are no problems with traffic. Driving down Marine Parade feels like being on a holiday in a coastal resort like Brighton.” Soon after his start at EIT, the computing school began extending its programme offerings. Steve helped establish the Bachelor of Information Systems launched in 1997 and was appointed the degree’s programme coordinator. “In the 1990s, the teachers were expected to improve their qualifications,” he recalls. “Most went on to gain master and doctorate degrees.” At the time of his retirement in December there were six staff holding PhDs in the computing school – “when I was employed by EIT there was only one on campus”. EIT’s first staff member to receive both the CEO’s Award for Academic Excellence and the CEO’s Award for Research Excellence, Steve was appointed assistant Head of School Computing in 2008 and Head of School the following year. He was made a Fellow of CITRENZ (Centre for Information Technology Education and Research New Zealand) last year, recognising his contribution to IT education and research. Leaving EIT with an impressive legacy, Steve now plans to travel with Shirley – “we are lucky enough to have family with homes in some of the UK’s loveliest locations,” he says. Rebekah, meanwhile, is gearing up for the challenges of her expanded role. “The computing school has a great reputation in regards to its programmes, lecturers and research,” she says, “so I am really looking forward to getting to know and working with the school.” Both schools have many similarities, she points out, “so there is the opportunity to share knowledge and experiences.” The business school is currently developing a new suite of programmes for delivery in 2017. “That presents a really exciting opportunity to review how we are doing things and how we can better support students to succeed.” A committed life-long learner, Rebekah recently completed her final paper for a Master in Management degree.


PRO HR

Letting Go Delegation is a two-edged sword. It can save you and it can frustrate you.

By Kimberly McKay | BDO Central

In my work with different organisations it is certainly something I have observed many managers struggling with. Letting others take control of a project or task or part of your business that you feel ownership of can be hard to do. Have you ever caught yourself saying (or perhaps thinking) any of these gems? • If you want it done right; do it yourself • It would take me longer to train someone than do it myself • Whenever I let someone else do it there are problems • I’ll just end up doing it again myself • He/she doesn’t do it the way I would

Some tips:

• I’m so busy because I have to do everything around here

• Choose the right things to delegate – not the stuff you love doing or that’s high risk

Of course it will take time to train someone else and they may make a few mistakes but is that short term pain outweighed by other long term gains? Done well, delegation can free up time for more complex or perhaps strategic tasks. What is the best use of your time and expertise for the business?

• Select your replacement carefully. If appropriate call for volunteers. Enthusiasm makes up for lots of other shortcomings

Consider whether it could be an opportunity to reward someone with extra responsibility or development. It can also be a business improvement opportunity. Others may have different skills or creativity they could bring to the delegated function. Far from stuffing it up, a fresh perspective might uncover new or more efficient ways of doing things or give the old process a new lease of life.

• Be specific about the task, the results expected and agree deadlines

If you have capable people around you and you don’t delegate sensibly, you are likely to frustrate them. They will want to contribute more to the business, take things off your plate because you’re so busy as well as share their expertise and skills; but you won’t let them. Paying talented people and not using their talents is a shameful waste. They will become disengaged and eventually leave.

• Plan time to train your successor and map the work process for their reference and for others in future

• Be clear about authority levels and freedom to act For delegation to be successful you will have to reign in any controlling tendencies. You need to allow the person scope to do it their way (unless there are critical requirements to follow). They will do it better and enjoy it more. You also need to resist the urge to micromanage and look over their shoulder too often. Give instruction, give autonomy (i.e. get out of their way) and be available for guidance if needed. It’s important to provide constructive feedback along the way but resist the urge to re-work or criticise unless it really matters. Try to turn mistakes into learning opportunities and discuss what could be done differently next time. Above all, show your appreciation and recognise success.

If you don’t trust your people you might explore whether you can use technology to delegate to a device – lots of processes can be automated, or parts of them, or technology used to provide prompts and checks along the way. But if you really don’t trust your people you need to work out why and address the issue – is it poor recruitment, training, role clarity, motivation? If you or someone else in the organisation is something of a control freak then over time that is likely to have quashed initiative – everyone knows they have to run everything past you and if wasn’t your idea it won’t fly. Decisions take too long because only one person has any authority. It’s just not good management! Sometimes circumstances such as sickness or high workload force the issue of delegating tasks. Like everything, it’s more difficult if you start delegating in crisis mode. It is far better if you can take the plunge and let a few things go with a structured approach, making life easier for all those involved. So have a little faith and take a calculated risk to delegate. Most often people will step up if they have to – they may surprise you and themselves. Kimberly McKay is a Human Resource Consultant at BDO Central. She has extensive experience assisting both small and large employers with all aspects of their HR needs. BDO Central are Chartered Accountants and Business Advisors, with offices in Napier and Palmerston North. They are able to support clients with a comprehensive suite of accounting, information systems and HR services. FEBRUARY - APRIL 2016

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PRO Legal

RMA REFORM LIKELY TO BECOME LAW Last December Government’s long foreshadowed reforms of the Resource Management Act recevied their first reading in Parliament.

By Scott Smith | Bramwell Grossman Lawyers

The proposed changes are mild, and while they lean toward a developer’s perspective, they are likely to become law without too strident an opposition. Of note for rural areas, the Bill would enable the making of regulations that require stock to be excluded from waterways (particular waterways or more generally). That echoes the Land and Water Forum’s recommendation to exclude livestock from waterways on plains and lowland hills. At this stage the intended regulations are not out – so I cannot elaborate on them, to where they apply, or the exceptions that will no doubt be important. But this is a clear signal that the rules are on their way. That issue aside, what follows is a summary of the changes that I suspect may be of more interest to you. Resource consents

Much of the criticism of the current system surrounds the costs, delays, or in some circumstances the need, for resource consents. The proposed changes set out to address all of those concerns by reducing the number resource consent applications that may be required, more tightly limiting third party involvement, and by providing applicants with greater certainty around costs. The Bill would allow a council to waive the requirement for resource consent where the proposed activity requires the consent due to a marginal or temporary non-compliance with the rules. To be eligible for a waiver the effects on the environment would need to be within what the rules allow and any effects on a person must be less than minor. Similarly, if the need for consent comes from a boundary infringement, and the relevant neighbour has given their approval, the activity will be treated as if it were a permitted activity. This may be an important change for developers. They often own both sides of a new subdivision’s internal boundary so they can “sign-off ” on their own boundary infringements issues. The Bill narrows who may seek to object to your recourse consent application, with a notable emphasis on facilitating residential subdivision and development. Finally, in a move that is sure to please many larger developers the financial contributions regime will be phased out in favour of the less bespoke development contributions approach. While development contributions can be rough and ready and as such may be unfair to some and generous to others, 46

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their determinability makes them easier to factor into the early assessment of a project’s viability. Plan making

The setting of the objectives, policies, and rules in district and regional plans is perhaps the most important, but least understood, part of the RMA process. It is like the setting out of a road network, along which the vehicles of resource consent applications must later pass to gain approval. That framework is often said to reflect “community expectations”, yet most of the community only discover those expectations when it is too late to change them – during a due diligence, when they later discover that their project is not okay, or that their neighbours’ intentions are okay. A reason for public disinterest may be the complexity of the process, and the Bill seeks to reduce that complexity. The Bill gives two additional process options: a “collaborative” option, or a “streamlined” option. The current process also remains as the default setting. The primary difference between these three options is the timing and degree of public involvement. The collaborative option puts an emphasis on early public involvement, prior to the proposed planning document being released for formal submissions. The flipside of that is a reduction in the appeal rights. The streamlined option gives a lot of flexibility for the Minister to decide on a process for the particular circumstances.

Importantly in my view, the Bill allows for greater central government guidance on plan content, including template rules for councils to use if they wish. To say that the plan drafting process is difficult and expensive is an understatement. A template approach will reduce costs, reduce the number and scope of appeals, and the gradual alignment of rules nationally will let all of those involved more readily draw on experience gained elsewhere. This development may be a relief for some councils in the Bay with pending reviews of their rules. New powers for the Environment Court

One last topic: the Bill would give the Environment Court the power to direct councils to acquire land where the imposition of new planning provisions would render that land incapable of reasonable use and place an unfair and unreasonable burden on the landowner. It is a solution that would require the landowner’s consent (but not the Council’s), and Public Works style compensation would be paid for the land, but it may be a useful addition to the a Court’s powers. In all, a potpourri of changes. The select committee process will help to refine the changes, but I suspect we will not see any significant changes in direction from what is relatively uncontroversial starting-point. Scott has 14 years’ experience specializing in Resource Management issues, and is the current chairperson of the Hawkes Bay branch of the Resource Management Law Association.


PRO

Property

Value for money when building a house By Paul Harvey | Williams’ Harvey Registered Valuers

Williams’ Harvey has seen a considerable rise in the number of valuation reports being done for residential new builds ‘off plans’. The trend to build appears to be getting ever more popular as evidenced by the queues outside Napier City Council when they recently freed up council land for sale. However, if you are considering building your own property there is a process which most home owners will need to go through especially if you require finance from a lending institution. However, for peace of mind it is also worth speaking to a Registered Valuer. Whether you build or renovate your property the bank will often ask for a valuation report ‘As If Complete’, to determine if the cost to build, plus the land value aligns with the Current Market Value (CMV) of your property. When it comes to building, planning and management are important, especially when it comes to accurately costing the build. A Registered Valuer can provide you with a valuation of the house “off plans” to determine if the cost to build plus land value aligns with the CMV of your property. How can a Registered Valuer help? When you build a house ‘off plans’, a valuation report provides information on the following: • The Current Market Value (CMV) “As If Complete” • Analyses “Cost to Create” • Determines whether the project is over capitalising • Provides full report to your Financier to rely upon to lend Mortgage Security so you can pay your builder • Confirms your home is being built as per the plans and specifications. What does a Registered Valuer need? Full set of Stamped & Approved plans by the Local Territorial Authority A copy of your building contract stating build cost and any exclusions.

Specifications of: • All building materials • Fittings to be installed Details of other site improvements, such as: • Landscaping, fencing, gardens • Driveway, paths, paving, swimming pools • Associated out buildings (e.g. shedding) • Services to the site What are Progress Payments and Progress Payment Certificates? As the build advances, progress payments will be needed to pay for the work completed by the builder. Therefore, your lender/bank requires a ‘Progress Payment Certificate’ which is undertaken by a Registered Valuer verifying that the appropriate site works have been completed, and what is still required to finish the project. On your instructions the Valuer will re-inspect the property in order to assess the percentage of works complete and a ‘Progress Payment Certificate’ is issued for the lender/bank to release the funds. Any progress payment recommendation is based on the full funds to be drawn down less a calculated amount ‘Cost to Complete’ less a ‘Saleability Allowance’. The number and frequency of ‘Progress Certificates’ required will depend on your personal financial circumstances, however the following can be a used as an estimate: • Slab down, framing up and roof on • Fully enclosed and secure all exterior cladding on and all exterior windows and doors in. • All interior walls lined and ceiling lined as well as all electrical and plumbing in place. • All interior and exterior decoration complete and all fittings to bathroom, kitchen as well as all electrical fittings in place. • Fully complete dwelling with Code of Compliance Certificate issued, all landscaping and other improvements included in the valuation done. Items included in the ‘Progress Payment Certificate’ include all items that are physically fitted in place. We cannot include items that are on site but not fitted, such as: • Stock piles of building materials • Window and door joinery on site but NOT fitted

• Fittings/appliances on site but not fitted • If Progress Payment Certificates are necessary, try to hold off as long as possible before instructing the Valuer to proceed. That way more building work will be able to be included in the calculations. Four Key Items The following four key items are necessary as they are designed to protect your financier’s interests should they ever be put in a position where they need to step in and complete the project. It is also just as important for you to have a good understanding of the process and requirements involved so that you can make prudent decisions during the build process. 1. Stamped and Approved Plans by Council – these are necessary to confirm our valuation findings. 2. Build contract with contract price – to confirm against our estimated market normal costs. 3. Saleability Allowance – what is this? At every progress payment a ‘Saleability Allowance’ is deducted due to the incomplete nature of the property. The allowance decreases as the project progresses. 4. Code of Compliance Certificate – Our final ‘Progress Payment Certificate’ will hold some funds until the Code of Compliance Certificate is issued by the Territorial Authority. Building your own home can be hugely rewarding, however it is worth taking the time to understand the true value of your new home, not just in cost and materials. Kevin McLeod from BBC’s ‘Grand Designs’ summed it up perfectly when he said, “One of the most important roles you have, is deciding how the project is going to be run. Get it right and the whole experience can be a real pleasure. Get it wrong and it can wreck lives, marriages, financial security and every dream you’ve had for the place. Not that I want to put you off.”

Paul Harvey is the Director of Williams’ Harvey Registered Valuers. He has a diverse and broad knowledge of the HB property market. To contact Paul, email: paulharvey@williamsharvey.co.nz FEBRUARY - APRIL 2016

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PRO

Business

Extracting Maximum Value Practical ways of optimising the performance of your business. By Cedric Knowles | KNOWLedge Accountants

In the last issue of The Profit, I wrote about achieving maximum value from the sale of your business, by covering off these main 5 points: 1. Making yourself dispensable 2. Cleaning up your books 3. Having a plan 4. Making sure you’re heading up, not down 5. Knowing how much you need from a sale So in this issue, I’d like to run through some of the practical ways to achieve a great outcome. Most of these revolve around putting yourself in the buyer’s shoes; make them see the return they will achieve and how their risk is lowered.

Profit Growth There are essentially five ways to improve profit:

businesses I come across have no sales and customer services systems in place – if you want to extract maximum value, then this is the single most important area to focus on.

If your business relies on a lot of technical knowhow, what have you got in place that will make it easy for a new owner to pick up and run with this knowledge?

A few bullet point tips are:

Compliance

• make sure your sales process is not dependent on you as the owner – have others who know the sales cycle, how to quote and price, and how to follow up service delivery • try and reduce the percentage of sales coming from one or few customers – this is a sure-fire risk sign for a buyer • if possible, increase the number of customers who have contracted income, for example service contracts or supply agreements (and the same applies to important suppliers) • don’t be too cheap! make sure you’re there or thereabouts with pricing, as a buyer will not want to immediately increase prices • have a sales & marketing plan in place – this shows that you understand and have thought about who your customers are and what they need you to provide • make sure you understand where further growth can come from – most buyers will want to know that they can bring some upside to the business.

We have all heard horror stories about OSH disasters, resource consent nightmares and so on. The level of compliance in these sorts of areas is only going to increase, so have you got appropriate plans in place?

1. Gain more customers – are there different industry segments you could be targeting? 2. Lose fewer customers (or make sure more customers remain active) 3. Sell more to each customer – either add-on services, or just making customers aware of other products or services you provide 4. Sell more often to each customer – for example, if you provide a service three times a year, is it feasible to do so four times a year - instant 33% Tidy Systems Business processes and information systems revenue growth! should be able to be picked up by a new owner 5. Reduce costs – keep an eye on fixed overheads, easily – it is absolutely vital that this is not all particularly in areas where costs are constantly stored in your head. Being able to demonstrate reducing such as IT and communications. answers to any buyer questions quickly and Vehicle Graphics Focus on cost of sales – can you get better efficiently greatly reduces the perceived risk (and Building Shop Fronts deals out of suppliers, or improve efficiency/ in therefore increases the price). Up to date and your manufacturing or service Footpath process Signs accurate financial information is important, but All of these can be easier said than done, but so to is more in-depth information on customers, small changes can make big differences. Many buying habits, cost of sales and margins.

You probably also have a lot of contractual obligations, from building and equipment leases, to supplier terms such as minimum purchase requirements. Are these all up to date and being complied with, and can you easily show this to be the case?

Run Clean and Mean You need your business to show the maximum possible profit, and least possible risk – these two factors multiply out to the value you will receive. Therefore, make sure all personal or discretionary spending is minimised. You should also get rid of any surplus assets – if you can convert anything in to cash prior to sale, you pocket the money. A buyer will usually pay a price based on earnings, so unutilised assets end up being given away free. It is also important to make the transition to a new owner easy for your staff – you will normally expect to have to pay out holiday pay, so try and make sure this is minimised, and staff are aware that they may have to wait for their next round of holidays. This time of year is a great opportunity to look ahead and plan for the year underway. If a desire to exit your business is part of that plan, get started on tidying up your business straight away.

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Call 0800 SPEEDY today! CMY

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hastings@speedysigns.co.nz 903 Heretaunga Street West, Hastings 48

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FEBRUARY - APRIL 2016

Cedric Knowles is a director of KNOWLedge Accountants, Hawke’s Bay. He has worked as an accountant in the Bay since 1987. Contact Cedric by email: cedric. knowles@knowles.net.nz


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FESTIVAL

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