New Zealand is now ranked the best country in the world for starting a business

 2009 World Bank “Doing Business Indicators” have just been issued and New Zealand has been ranked as the easiest place on earth to start a new business.

Starting a Business indicators evaluates the steps & and expenses related to forming a new business.  This excellent result is primarily attributed to the Companies Office & Inland Revenue Department’s shared project which allows new companies to apply for IRD numbers and also apply for GST registration at the same time, during its incorporation.

Additional factors that contributed were New Zealand’s recently lowered company income tax rates and revised insolvency legislation.

New Zealand also retained its second place in the overall Ease of Doing Business ratings; ranked second only behind Singapore – further showing New Zealand as an excellent overall performer overall. The Ease of Business results is an annual initiative carried out by the World Bank which evaluates more than 180 countries’ economy and policy frameworks. It evaluates each country’s regulatory framework and how that structure translates to achieving regulatory targets – for example: providing separate legal identities businesses.

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How to design your core message

How you design your core message is probably one of the most critical and primary steps in marketing.  It sets the foundation for creating clear, focused and specific marketing messages.  The key message produces valuable strategies for many other marketing applications like your emails, brochures, your “elevator” pitch, sales letters and more.

Developing your core message takes you closer to market control, as your message grabs the attention of your target audience and affirms your branding and product positioning.

Conceive it with insight  
Whilst creating your core message, concentrate on your customers’ problems and come up with practical solutions for them.

The reply to the next questions will unquestionably help you to do so.

Who is your market?  You must understand your core audience, and the factors that stimulate them.

Why do they want your services?  Recognise what their problems actually are, and how you may really help them.

Think about the following points to make your key message more effective.

Keyword analysis - Meticulously evaluate the keyword phrases that you want in your key message to impart your brand and value.  And, make a list of words that you ought to keep away from.

Remember your sales cycle: Your key message must be suited to every part  of your sales cycle.

Message testing:  Assess it to guarantee that it works in all situations.

Train your teams:  Everyone in your team who will use this message must be taught why you’re using it and its consequence.

After you have created your core message, it’s time to use it for all your marketing communications such as your website, professional biographies, introduction letters to potential referral sources, networking introductions, radio and print advertisements and even in media releases or while talking to the media.  

At Business Advisory Accounting & Tax Services our core message is “helping you succeed” because that’s what we firmly believe in.  Our process are designed to do that.  Or staff are taught to achieve that.  And our philosphy as soon as we walk into our office is that.

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Five ways to test your customer service levels

Your customer service level is a significant measure of how well (or how poorly) you assist your clients. 

Hence, it is a vital factor of how well your firm will do – especially how good you are at keeping clients and generating ongoing business.  Indirectly, it also adds to your referral business – how well you assist current customers will sway their inclination to recommend you to their friends, family and associates.

The following are five strategies by which you can analyse your customer service level.  This list is not exhaustive, but this ought to give you a good picture of how good you are at serving your customers.

Can you quickly fulfil orders through your stock?
If you display great customer service level, then you should easily be able to satisfy your customer orders. You should keep meticulous note of what your customers request and whether you have the item they are requesting at the time they place the order. If you are nearly always “out of stock,” then you are not serving your customers in the best way possible.

In a business with a diverse number of products, if you are able to complete the order for about 95% of the time then you are doing fine.  If you are a business that offers only one product, 100% fulfilment of normal orders (barring unusually big orders) should be your aim.

Can you deliver your customers’ orders in time?
Another factor that you must assess to test your customer service level is the efficiency of your service or how promptly you are able to deliver the product or service which has been placed. If you are nearly always missing your target delivery dates, then your customer service delivery chain needs major work.

You ought to calculate the amount of customer orders that have been delivered on time to the overall number of customer orders. This estimate should be time-bound. For instance, for a month’s total number of orders, what proportion has been delivered on time? If you register that 95% of the time, your customers receive their order at the designated delivery time, then your company is doing fine.

Can you effectively resolve your customers concerns?
For excellent customer service, you need to respond to your customers’ inquiries and solve their concerns. A straightforward way of measuring this would be to assess the percentage of the amount of customer enquiries that have been successfully resolved to the total quantity of customer inquiries received.

Do you take action promptly to your customers’ mails/emails and phone calls?
How promptly you respond to customers is another means of assessing your customer service level. If you are able to reply to your customers inside 24 hours (less is even better) of getting their phone call, messages or email, then you are doing great.

Do you make the grade according to your customers?
Lastly, your customers themselves can inform you if you make the grade or fail when it comes to satisfying their needs. You can actually carry out a customer survey. The survey should focus on customer service problems so you can determine how well you are able to serve your customers from these customers’ point of view.

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Why it pays to look after your existing customers

Over the last 10 years, I’ve learned numerous lessons managing my own businesses and also by consulting to my customers and by far the single most significant lesson is ensuring that customers stay happy.

The logic for this is watertight. Marketing people will advise you it costs between five to seven times more to win a new client than keep an existing one.

According to some, reducing customer attrition by as little as 5% may result in more profits of between 25% and 125% When times are booming and sales are strong, it is often easier to fill gaps left by a departing client. There’s also not as much of free time to identify explanations why the former customer left or do something to stop it.

As always, it takes a major recession like this one to prompt all businesses of the significance of caring for existing relationships and keeping customers loyal.

Challenging times are already most likely forcing your customers to ease costs and seek ways they can save. Establishing a concrete, trusting connection with them can lessen the likelihood of your company being top of the list of cutbacks. Keeping up a regular, well informed dialogue helps retain customers. Find out what they want and how the service could be improved.

To avert being intrusive, it’s always politic to ask them where and how they’d like to be approached and how often.  As soon as you attention, be ready to talk openly about everything that concerns them. Given the present crisis, this may perhaps involve anything from the awkward matter of a possible reduction in price to be alternative ways of working. However it could also identify other areas of improvement unconnected to the recession, such as how well your sales and marketing people are performing or how your customer’s account could be handled differently.

Companies should think differently if they are to emerge from this recession. Large or small, we’re in this slump together, so it makes common sense to operate in partnership with customers and suppliers to guarantee survival.

At Business Advsiory Accounting & Tax Services, for instance, it’s not just our direct clients that we care about as partners but also the businesses which supply us with our hardware; software, stationery etc. We might pass on any handy information to them on managing the effects of the downturn, for example, and they to us. The benefits of this are that we empathize where they’re coming from and what they’re doing to lessen risk in a recession, and vice versa.

While all this is going on, your service delivery should be be top-class so work vigorously to maintain an outstanding customer experience with clients, new and old. Develop and perfect every part of your offering from how you work to the quality of your products or services.

By pulling out the stops to help old customers, you’ll not only retain them on board but they’ll also pass the word about and help you secure new ones. And don’t forget to reward them for their loyalty: smaller companies may not be able to stretch to the expense of a loyalty card scheme but there are numerous little gestures you may make to keep them content.

Spending a small amount of money on your current clients now will be advisable in the longer term when this recession picks up.

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8 tips to close the floodgates and improve your cash flow

Cash flow is definitely the lifeblood of every business. One of the biggest challenges while running a small business is cash flow management.

Read on to find out how you can close the floodgates and improve the cash flow of your business.

Insist on down payment:
This way, it is your customers and not you that fund projects. Also, ensure that you are paid in full upon completion of the project, without any 30 or 60 day extensions.

Prompt billing:
In case of long-term projects, make sure you negotiate in advance for regular payments.

Incentives for faster payments:
Offering a discount for quick payments reduces the time spent in waiting for payments.

No-pay customers are a strict no-no:
Make enquiries about a new customer. If they have a reputation for not paying on time, avoid them like the plague.

Reduce inventory:
Money spent on inventory does not create any interest or savings for you. So don’t keep too much product on hand, and make sure your inventory turns over at a regular pace.

Cash cover for expansion programs:
Expansion plans should be initiated only if you have the requisite cash to cover them.

Buy time for payables:
Wait for about 30 to 60 days before you make payments. If suppliers press hard, ask for discounts for early payments.

Cushion for the future:
Make sure you are adequately prepared to face a cash crunch in the future.

Implement these options depending on the needs of your business and watch your cash flow improve dramatically.

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Tax on private boarders

In the current economic climate, you may be tempted to take in some private boarders or student homestays to top up your income.

This article aims to give you an overview of the tax implications if you do so.

If you receive income from private boarders, including student homestays you can choose one of 2 methods to work out whether you have to pay tax on the income:

1. The standard-cost method

The standard-cost method uses an average price for basics such as the cost of food, heating, power and transport. The amount is an average across the country and is inflation -adjusted annually.

If your income from boarders is less than the standard cost allowed, you will not have to file a tax return, keep records of related expenditure, or pay tax.

For the year ended 31 March 2009, if you have 1 or 2 borders, then the standard cost is $227 a week for each boarder.  For 3 or 4 boarders, the standard cost is $227 each for the first two boarders, and then $185 for each subsequent boarder.

Let me provide a couple of examples:

Example 1: If you have two boarders and they pay you $215 each a week, you do not need to file a tax return or pay tax.

Example 2: If you have two boarders each paying you $250 a week, you may need to file a return and pay tax, depending on your circumstances.

Note: If you have five or more boarders you cannot use the standard-cost method.  You are required to complete a tax return and include all payments received as income. You may claim actual allowable expenditure but you must keep records to support your claim.

2.  Actual-cost method

You may choose to keep full records of your actual income and expenses (i.e. food, etc) for the year. If you choose this option you will need to complete a tax return to declare any profit or claim any loss.

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3 steps to grow your business

Small businesses can grow fast even in times of recession. 

Surprised to hear this? Owners of small businesses are constantly looking for ways and means to grow their business and increase their profits. Here is some very valuable information that will help both you and your business grow.

1. Customers are the key
The size of your small business depends on not only the number of customers you acquire, but also on the manner in which you fulfil the demands of these customers. In other words, it depends on the amount of goods and services that you are able to provide. So an increase in the number of customers will be of no use if you cannot meet their demands.

On the other hand, increasing the quantity of goods isn’t such a good idea if there is no increase in your customer pool. For your business to grow, you must get more customers, and also be able to supply to them.

2. Acquire more customers 
Developing an effective system of customer acquisition is also vital in ensuring sustained growth in your business. One of the fastest ways to do this is to ascertain how you have successfully managed to obtain customers till date, and increase your efforts in that particular direction.

Create a mailing list of your current customers, and keep them informed about special offers and promotions. Giving discount coupons and limited period offers for making referrals to your business will definitely please your customers. 

3. Employees – true assets of every business
Yet another method that can provide sparkling results is by motivating employees of your business to give ideas on business growth. Not only will this act as a morale booster, they  will also help generate some very innovative ideas.

If you follow these 3 steps, you can make your small business grow faster and bigger than you could imagine.

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Learn how to set SMART goals for your business

Setting SMART goals for business is important because being SMART is the only way to be to achieve any kind of success.

It could be a plan to promote a brand or achieve a sales target within a given time frame, setting smart goals is of paramount importance. Needless to say, the success or failure of any business also depends largely on the kind of goals that define it.

For those of you unfamiliar with SMART, here’s what it really means. SMART stands for – specific, measurable, achievable, relevant and time based. They, in fact, form the basis of setting efficient objectives.

Here’s a little about each:

>>  Specific: It is a very important element of business planning. Get straight to the point about what you want to achieve, when you want to achieve, the exact requirements and constraints, and above all, why you want to achieve the specific objectives. If possible, use percentages, figures, ratios and fractions to highlight your goals. For example: I want to achieve 20% more sales than I made last year.

>>  Measurable: It means that you should be able to measure your present performance against these objectives. So when you aim at a 20% profit margin you have a measurable objective.

>>  Achievable: Be realistic when you set targets, or else you might end up being very disappointed if you do not meet them. They should not be too easy or too difficult to attain.

>>  Relevant: Make sure the objectives you set are closely linked to your kind of business.

>>  Time based: Targets are of no use if they are not set within a given time frame. So when you say that you need to increase production volume by 500,000 units, make sure you specify the time as well.

Do you still believe that setting SMART goals for business is rocket science?

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The new IRD mileage rates

The IRD recently amended the mileage rates that can be claimed for business use of a motor vehicle expenditure.  The new mileage rates apply for the 2009 income year, ended 31 March 2009.

Self employed business owners may use one of the following methods to calculate the proportion of business use of a motor vehicle:
*  Actual records
*  A logbook, or
*  A mileage rate

The mileage rate applies in respect of:
*  Self employed taxpayers
*  Up to a maximum of 5,000 kilometres of work-related travel each year
*  Motor vehicles irrespective of engine size whether they are powered by petrol or diesel.  It does not apply to motor cycles

The rate set for motor vehicles has been increased from 62 to 70 cents per kilometre.
 
If business related travel of self employed persons is over 5,000 kilometres per annum then they should use one of these two methods:
*  Actual Expenditure – you will need to keep accurate records to determine the proportion of business use.

*  Log Book Method – You must keep a log book for a test period of at least 90 consecutive days, and then apply that proportion for the log book term (up to 3 years).

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How much is your time worth?

Successful people use many time management strategies to manage and value their time.  This article offers a few simple time management strategies to help you use your time more effectively.

Realise that time is running out
Time is a unique resource, which is finite and expires at the same rate for every single person. When it’s gone, it’s gone…forever! Other key resources like money and people can be found – although I accept that it may not always feel that way!

We all start with 1,440 minutes every day. It doesn’t matter how much demand there is for more time, the supply will never increase…ever.

Time is money
Benjamin Franklin said that “time is money”. Every minute wasted will have a cost. How do you value your time and how much is your time worth? It may be time to decide right now to calculate your worth!

What’s the minimum that you want to earn this year? How many hours will you work this year, after deducting weekends, public holidays & annual leave?

Let’s say that you want to earn $180,000 and you will work 1,856 working hours. By dividing $180,000 by 1,856 you’ll be able to calculate you required hourly rate. In this case, you’ll need $96.98 per hour.

But are you 100% productive?
If you’re in business, you’ll need to adjust this figure to allow for down time, etc. Let’s assume that you’re productive for only 60% of the time. Your time is now worth $161.64 per hour (180,000 divided by 1,856 x 60%).

How tolerant are you now going to be of anyone “stealing” time from you?

Find out where you’re wasting your time
So now you know the real value of your time, what (or whom) are the common time wasters?

“Have you got a minute?”; “Of course, I have time for a quick chat”; “My door is always open”. Sound too familiar?

The 1st major challenge you must overcome to manage your time more effectively is YOU!

Successful, productive people know how to handle the never ending barrage of interruptions by using proven time management strategies. Make it hard for people to abuse your time by respecting your own time.

Learn to say “no” and set yourself goals and deadlines to avoid veering off track. Audit your time to identify non productive areas. Eliminate tasks that need not be done at all. Ask yourself: “What would happen if this task wasn’t done at all?” “Which activities that I currently carry out could be done more efficiently and effective by some-one else”?

Learn to delegate. Learn to outsource. Be tough.

The Pareto Law time management strategy
One of my favourite time management strategies is the Pareto Law (or the 80:20 principles). Pareto’s Law can be summarised as follows:
* 80% of the outputs result from 20% of the inputs.
* 80% of your results come from 20% of your efforts;
* 80% of your income will come from 20% of your clients;
* 80% of your sales will be generated by 20% of your products;
* 80% of your problems will come from 20% of sources;
* And many more

Carry out your own 80:20 analysis and you’ll probably be surprised at the results.

Time is the scarcest resource on this planet. Remember, YOU have a choice on how you choose to use yours. Life isn’t always perfect and you may struggle to follow these principles all of the time. Don’t give up and develop better time management habits to create the freedom and lifestyle you choose. And most of all have fun!

Let me show you a few of my secrets that have helped me save time and money which will work for you too!  You’re invited here!

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