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Family business are a big part of NZ business.  With MBIE stating they make up around 75% of entities and employing a ‘good chunk’ of the workforce. I’ve worked with my fair share over the past 20+ years as a CA.

Family Strength
There is a uniqueness of family business to survive where a typical business commercial model may not.  It’s that strength to help out and pitch in during the hard times that make FOMB’s quite special. Dedication from family members can be hard to replace.

Long drawn out debates about business decisions can at times become heated, however the family bond creates a connection that usually brings the family back together.  Once heads cool that ongoing discussion is again a strength for FOMB’s.  At the end of the day, while the family may not all agree on a particular business aspect, everyone will still want to clear the air and sit down for family Christmas dinner together.

Clear Expectations

One of my key takeaways for the FOMB is to have clear expectations about who does what, who makes the calls and who is responsible.  A business plan for any business is a good tool but having a clearly defined one for a FOMB is a good way to head off difficulties.

 

Working with FOMB
I like to keep a good understanding of what’s going in my clients business, we use Xero so we have good up to date reports,  I check and file my clients GST to ‘Keep my head in the game” and charge a fixed price fee so they don’t worry about calling me with a question.   Regular development meetings lets me play a part in keeping their business moving in the right direction.

 

Succession Planning
Like any business things are always changing.  Effecting the hand over from one generation to the next is a big decision.  From experience this takes quiet some time and generally if you start early enough there should not be any panic.  Start with identifying everyone’s key strengths and weaknesses.  What are each family members views? How would they like to be included? Then it’s a matter of trying to fit the jigsaw together.  Not everyone is going to get what they want and that’s part of managing the family dynamics.

 

Family owned managed business can be hard work, but also a lot of fun, plus you get to share it all with those you love.

Happy New Year !
By Greg Verhoef
1 st of April is an Accounting New Year for many. So why not celebrate your achievements,
put the past year behind and create some New Year Business Resolutions for the year
ahead.
This year with my business I’m going to……..
 Work hard, engage the team and make sure everyone is having fun.
 Kick the tyres of our business plan and make sure it’s still fit for purpose
 Develop a new product or service and create a marketing strategy to take it to
market.
 Review our marketing plan
 Get more help with my business, put together an advisory board to help make good
business decisions.
 Review our business strategy
 Check our processes and systems to see what can be automated, simplified or done
away with.
 Identify 6 new clients I’d like to win and set up some strategies to target them.
 Set some clear goals and expectations with the team and reward them if we achieve
great things.
 Set a budget for the year ahead and meet with the team to report against it
regularly.
 Get some help to deal with those difficult issues I’ve been putting off.
 Find some cool new Xero add on’s to help my business operate efficently
information
Keep your Accountant happy:
This is also a great time to put together a file for your accountant. The sort of stuff to help
prepare your Financials and Tax returns. Things like stock and cash on hand, checking your accounts payable/receivable and asset ledgers for write offs. Details of new assets, finance agreements, loan statements, interest, dividend and donation receipts.

If your accountant has been actively using and checking Xero, many of the items previously done as year-end adjustments may have been dealt with as they happened. By keeping your accounts and financials up to date throughout the year, there should be no surprises, plus you have better information to base your decisions on during the year.

 

Minimum Wage Increase:
Just a reminder minimum wage went up 75c to $16.50 from the 1 st April. See
http://www.employment.govt.nz for more details.

I’m always keen to meet new business owners if you’d like to grab a coffee just give me a call.

 

 

Why so many small businesses?

By Greg Verhoef

I attended a presentation recently where some insights were shared on kiwi businesses. The results we interesting with about 1.5 million micro business, 100,000 slightly larger SME’s and 22,000 large businesses. Almost 97% of entities had 20 or fewer employees.

While this is great to see the Kiwi Spirit of budding entrepreneurs ‘out there doing it’ it did make me wonder why it is so hard to make the transition from small to mid-sized or larger. Is having so many small businesses efficient for our economy? How many of them are just making ends meet or worse sucking the owners into the dark hole of debt?

Apart from obvious efficiencies and reduced duplication, there are other opportunities that come from having size and scale. With a wider team of staff, there will be idea’s to develop, opportunities to collaborate new products or develop specialties, take on larger projects and source the capital to invest in these opportunities.

Here are seven tips to help you break the small business mold.

Have a Plan – The importance of having a goal and some steps in place to achieve it is paramount. If you don’t know where you’re going how will you get there? Don’t be afraid to change it up often.

Team Engagement – Your team is your greatest asset, make sure you bring them along for the ride, engage them in the dream and make sure they understand the plan, seek their input and be prepared to share some of the winnings when they arrive.

Seek Opportunities – Always be on the lookout for opportunities, to be creative, new ideas, different ways of doing things, collaborate with others, merging or amalgamating to gain scalability. It may be better to be a part owner in a big pie than a big owner in a savory.

Kaizen – Adopt a long-term approach to consistently making small improvements to procedures and process across your business. Always be aiming to improve better outcomes and efficiencies.

Invest Profits and Time – So you’re in business to make some money. The question is then how much do I take v’s reinvesting in wise opportunities for the future. Make a conscious decision about how much you take from the business and how much you leave in.

Delegation – delegate, delegate, and delegate. Free your time to work on growing and developing your business not the nitty gritty day to day stuff.

Advisory Boards – Larger business have clear split between governance and operations. Not really practical in a small business but a halfway step is having an advisory board of people with various skill sets or industry experience that can help guide and advise the business owners.

Another 4 Great Xero Features 

By Greg Verhoef Chartered Accountant 

In the last few months I’ve covered 9 Great Xero features, there are of course many more.  If you would like to see my thoughts on the others, check out the blog on my website –  gregvca.nz 

1. Invoices online – The key of a cloud based accounting system is you can access it from anywhere.  You can create invoices from the office, when on the road or while having a coffee.  You can email the invoice direct to your client as a PDF document or a link.  The benefit of link is it can also contain online payment options and allow the customer to view other outstanding invoices.  The neat thing about this feature is it logs when the customer viewed the invoice.  You can see when the customer has viewed.  Maybe they haven’t taken the time to look or maybe you should follow up with the customer to make sure you’re going to get paid on time. 

1. Xero to Xero Invoicing – Do you have a customer or supplier on Xero you do a lot of business with.  Rather having to type in all the bills you can swap Xero Keys.   This does NOT provide the other party with access to your Xero.  However when either party sends an invoice via Xero Network, it will turn up in the customers’ bills as a draft bill.  Approval is still required before being added into the accounts payable.  

1. Payroll – Xero has a functional simple payroll.  It does all the payroll basics online including processing, holiday pay tracking, bank batch payment and preparation of IRD files for uploading.  It also posts the wages to the Profit and Loss when processed, can split expense reimbursements to the correct code,  has an employee porthole that allows for payslip viewing and holiday leave applications online. 

1. Inventory – Xero allows for both tracked and untracked inventory.  Tracked inventory uses simple average costing to keep track of the quantity and value for stock on hand.  Costs of sales are allocated to the profit and loss when items are sold.  This is not a full feature stock control system but for simple applications it’s fine.  If stock is a major part of your business then check out the Xero marketplace. www.xero.com/nz/marketplace 

 

Happy to give a demo and see how Xero might fit for your business.