Expensive Funding

When cash flow gets tight, we all look for ways to delay payments, use financing that is available, and do everything possible to ensure the business (and household) keeps on running.

Sadly, the IRD is sometimes seen as a potential financier.  In NZ we rely on self assessment, and the filing of returns is seen as something separate to the payment of the tax.  In my experience, some tax payers believe that this provides a possible avenue of funding when things get tight. 

Unfortunately, the cost of this “finance” is almost always the nail in the coffin for a struggling enterprise.  As the following graph indicates, your debt grows at a rate most likely faster than the profits you retaining the cash has created resulting in a bigger car wreck in the end.

 

 

 

 

 

From the graph you can see that sometime during the 3rd to 4th year, your debt will have doubled.  Thats expensive whatever way you look at it.

If you are getting in to difficulties with your cash flow, talk with your professional advisor about what you could be doing differently, the sooner the better.  If you are already behind with the IRD, get in touch with us and we can talk about strategies before things get out of hand.

Till next time.

Go the All Blacks!

Hard to believe six weeks of fantastic sport are almost over. The wait for the Rugby World Cup seemed so long and now we have the final being played tonight at Eden Park. I still remember the building excitement and euphoria of the first world cup in 1987, and the subsequent bitterness of defeat in the cups since. I never want to be a “good loser”, but I do feel better equipped to congratulate the competition when they win. I hope this finely honed skill is not required tonight!

A personal gripe of this World Cup is the number of people out there whinging about how bad things are (Canterbury Earthquakes, Rena grounding, PSA, Global Financial Crisis, child poverty, etc.) and how we should be ashamed of being so focused on a sporting event. Without the richness of experience that sport and other pursuits give us we would all be lost in a cycle of continuing misery. I’ve always been a glass half full kind of person and while these events deeply sadden me, I would rather focus on the positives I see everywhere.

I’ve seen incredibly generous people opening their homes and wallets for those in need. I’ve seen friendly, passionate people enjoying sporting events with competitor supporters in a good natured way. I’ve seen gracious tourists who have taken the time to thank us for their experience, and promise to come back soon. And I am looking forward to a great final tonight!

On a business front, I read a report recently by myYardstick that based on surveys completed by over 1000 business owners across Australia and New Zealand, the biggest challenges currently facing small to medium enterprises include:

Issue/Challenge Percentage of Respondents
Funding 45%
Business Strategy 38%
Estate Planning 34%
Legal Affairs 34%
Succession 33%
Source: myYardstick Professional 2011

While I don’t think that the issues raised are new to business, the quantum would suggest that it’s still a struggle to run a business, and that business owners biggest need is to have a succinct plan on what they want to do and how they are going to do it. Not that great volume that is propping up a desk or bookshelf, but a practical document that conveys certainty and clarity for those charged to achieve success in the business.

So, are you developing the plan or implementing it?

Till post-RWC2011.

Lincoln

Be safe, be seen

Crikey, I love daylight saving but the timing of it is a bit rough. A super win by both the All Blacks and the Warriors has put the country on a high, but the results of the celebration can be a little difficult to wear when you’re an hour short on sleep!

Thought I’d give my view on something that seems to develop opinions a mile apart. The Government is seeking to rush through emergency legislation to give the Police vastly increased (or should I say legalize what they have done in the past) powers to record going-ons and use these recordings to prosecute. Cue Social Liberty groups hitting the headlines talking about heavy handed, power abusing Police who go to the Government with a wish list any time they need increased powers, expecting the Government to do it. Deborah Coddington (a writer I highly admire) says we need to “be guarded from the enormous powers of the state”.

What a load of bollocks. If someone commits a crime, all evidence available should be brought in to the light of day so that (as much as possible) people aren’t wrongly convicted. I would have thought people would have welcomed this? And if they have committed a crime, and been caught doing it through surveillance, what’s the problem? Slippery slope to a Police State? Our political system and media provide a safety valve for this, surely. After all, the Government that is attempting to create the legislation is the party that most NZ’ers voted for.

Given the proliferation of video recording devices and electronic social media, aren’t we all on show anyway?

A little humour

SO WHAT HAVE WE LEARNED IN THE LAST 2065 YEARS?

“The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.” CICERO, 55BC

EVIDENTLY, NOTHING!

The Female Touch

Campbell Tyson Cooper White has been a bastion of male-ness for almost 90 years. Although our Team is mainly female (80%), all the Partners/Directors positions have been held by males. This has given the place a decidedly male feel to it. Until this year.

When Sarah Miskell was appointed Director in April this year, something changed. I can also say it changed for the better. Tanya Potter, our General Manager brought a female perspective to our Board Meetings, as well as to the implementation of our strategies at the coal face. However, there had not been the involvement of a female at Directorship level to give it the “full 360”. Sarah coming on board has changed this.

Sarah’s impact may not even always be direct. Having a female on the Board has, in my opinion, emboldened others to speak up. The decor has improved (the feminine touch has brought far more tasteful colours and decor), meetings have a more collaborative feeling, people seem more open in terms of their opinions and are welling to discuss and negotiate. It was not that this was lacking previously, it is more the amplification that has changed. There has also been a conscious effort to empower all staff which I think has also contributed to a great feel around the office. Our Teams are more sharing and collaborative in their approach, with a real ground-swell of concern and desire to help our clients as a Firm.

It really feels as though we are moving beyond being accountants, and becoming more holistic in the way we run our business and care for our clients.

Till next time.

Lincoln

Icehouse Ice Ideas Conference 8 July 2011

Hi there

I was fortunate enough to attend the recent ICE Ideas Conference at the fantastic new University of Auckland Business School Owen G Glenn Building.  Any amazing assortment of speakers had been arranged, all with 6 minutes to convey a single point that had been directed to them by Andy Hamilton (see http://www.theicehouse.co.nz/Internal/InternalAboutUs/ICEIdeasConference/tabid/372/language/en-NZ/Default.aspx).

Andy Hamilton lead off with his few of what the future would look like in 2020.  He used his daughters future experiences as a reference point, and heavily promoted the theory of developing 3000 big hitting international companies by a 2020 target (see  www.3000.org.nz).

Rob Adams of Texas Venture Labs suggested that there was a 10 year venture capital investment cycle.  He challenged the general comment that everyone is short on capital as deals are still getting done where people work on it or have the right product/service.  He stated that NZ was seeing 3 deals done a week, through patience and hard work.  He also suggested that preparation meeting opportunity is what luck is made of.

Peter Thiel the Technology Entrepreneur was certainly a key drawcard for many of the guests.  He commented that the nature of the people of NZ is most important.  He said that NZers are friendly and welcoming, a view shared by many outside of the country.  Robust internal relationships needed to be formed to take advantage of this.  He warned against NZ seeking the traditional globalization approach, that is taking something that works and copying.  He suggested that we would be better seeking the Vertical/Technology axis, that is developing new things that are qualitatively better.  Or can better manage the finite resources we have available, both locally and around the globe.  Australia was a clear example of globalisation, and for NZ to catch up we would need to focus on the technology, or something that’s not been done before.  He challenged for us to think “Why should the 20th person be going to join your company?”, so as to build an enduring organisation.  He recommended thinking globally in terms of whether you could be first to market.  He also said we should be moving away from computers to alternative sciences, such as biotech, robotics, and alternative energy creation.  He used a wave analogy, saying we need to start to swim before the wave arrives if we are to get the best outcome from our energies.

The Hon Steven Joyce (Minister of Tertiary Education) also spoke on the role of the Government in supporting the Entrepreneur and the importance of the SME to the New Zealand economy.

The three first speakers then formed a Panel to receive questions from the floor.  When asked why success was so important, the Panel agreed that success breeds success, in that good businesses create experienced technicians/executives that foster further growth and development.  They spoke of the importance of striving and avoiding acceptance.  If you’re not outside your comfort zone you’re not doing enough and that you needed to get aggressive to get above the noise of the competition.  They spoke of the importance of fostering the same attitude and how you should talk at your local secondary school about success, what it’s like out there in the business environment and get passionate about your story.  They were common in saying that entrepreneurship is not a goal, rather an outcome.  They spoke about the most important decisions are made at the outset of a business and that this made planning paramount.  Reference was made to the Calvin Coolidge quote concerning Perseverance:

“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan “press on” has solved and always will solve the problems of the human race”

The Panel was an undoubted highlight of the day.

Other speakers included Richard MacManus of ReadWriteWeb, who said that NZ currently has low relevance/interest in the US.  He said we needed to avoid doing things the same old way and used Xero as an example of stepping away from the norm.  He stressed the importance of being relevant to the global market.

Tim Williams of ValueClick Japan spoke of the need to consider total immersion for entry in to new countries.  He said language is vitally important, pointing out that Japanese are learning Chinese in record numbers as they consider the economic powerhouse just off their shores.

Dr Sue Watson of Kea spoke of expat programmes to seek offshore contacts and experience, pointing out the huge success India had experienced in this area.

Chris Jones of Mobilis/Argent spoke of the need to have a clear understanding of the market.  This involved more specifically an understanding of all elements of the key client shape (Ownership, Influences, Key suppliers, recent deals).  He spoke of the need to develop relationships at multiple levels in the client and the need to “get on the plane and get face to face”.  He closed by saying you need to ask for the order get the order.

Grant Ryan of Yikebikes/globalbrain.net/realcontacts/sli systems said boring mediocrity is the difference between success and failure.

Mark Eglinton of NDA Group said that technology is vital to agriculture’s future success.

James Madelin of Enlight photo said we shouldn’t feel we have to start from scratch, that coachability is important to enable entrepreneurs to capture opportunity, to enable us to:

1. Forget what went before
2. Collective behaviour at the expense of individual behavior is negative
3. Celebrate success and assist those experiencing failures

He said we live in a planet sized classroom, and the sooner we come to terms with that the sooner we can achieve greater things.

Mike Carden of Sonar6 spoke of how “suspects” and prospects lead customers, but that people will do what they were going to do regardless.  He spoke of the need to be likable, don’t sell shit, and that it is salespeople who close deals after the customer is already hooked.

Candace Kinser of Biomatters spoke of her belief that righteous people feel they will be vindicated one day and this view typified entrepreneurs.  She spoke of the need to love your customer, make technology easy to use and the need to look for growth markets.

Peter Chrisp of NZTE spoke of the four keys markets he believes we need to pursue:

1. Knowledge intensive manufacturing and services
2. Value added food and beverages
3. High value tourists
4. Minerals and petroleum

Dr Andrew Coy of Magritek spoke of making sure of the understanding of the importance of every role and communicating this within your team.  He spoke of a great team focusing on the one clear goal, using a laser analogy where if general light can be focussed in to one concentrated stream, it can cut through metal.

Mai Chen of Chen Palmer did a wonderful presentation on challenging stereotypes, being solutions focussed and how working with government is good unless you don’t know how to do it.

Dr Tom Mulholland of the Attitude Doctor spoke about maintaining a “No Moan Zone” (www.nomoanzone.com) .

Murray Bain of the Ministry of Science and Innovation highlighted that research is the conversion of money in to knowledge and competence, and innovation is the conversion of knowledge and competence in to money.

Sir Ray Avery, New Zealand’s most trusted person spoke of the need to develop a product for a need rather than finding a market for a product.  He also spoke of New Zealand’s need to develop a knowledge bank to avoid the repetitious rebuilding of the wheel and allow us to build off our collective knowledge.

Franceska Banga of NZ Venture Investment Fund spoke of our need to attract $2 billion in investment over the next 10 years.  She said that this would need to be obtained from varied sources such as Wealthy Migrants, NZ Super Fund, Angels, Institutional Funds, NZVIF, International Investors and Kiwisaver.

Rod Drury of Xero challenged everyone to be an IPO, and to get committed to their project.  He further challenged everyone to get out there and get exporting.

We also heard from the likes of Mark Britt of Microsoft, Mitch Olson of SmallWorlds, Fady Mishriki of PowerbyProxi, Phil McCaw of Movac, Ross Peat of KlickEx, Andrew Harmos the Chair of NZX Ltd, Dr Sean Simpson of Lanzatech, Hideaki Fukutake of SIM Drive, Melissa Clark-Reynolds of MiniMonos, David Irving – Icehouse, all with the opportunity to convey their message in a six minute segment, no small ask.

Derek Handley of Hyperfactory closed with an interesting view of how he saw the World, or more particularly New Zealand, in 2020 given the refocusing the Ice Ideas Conference had provided to the New Zealand Entrepreneurial community.

I have to say that the day was an outstanding success that saw hundreds of enthusiastic people sharing ideas, common goals and the desire to seek a better outcome for themselves and for New Zealand.  A huge congratulations to the Team at Icehouse for creating such a wonderful (and hopefully regular) event.

Till next time.

Damn those link shorteners!

Hi there

I was caught out on the weekend.  I received a tweet with a condensed link from someone who follows me and whom I follow.  It seemed innocent enough, suggesting a link to a blog that mentioned me.  Having been to the Ice Ideas Conference and catching up with a few friends there, I thought I would check it out.  Nothing happened.  Or so I thought.  I shut down my session on my IPad and went about my business.

About 12/24 hours later I received messages from some people asking if I was a “bot” and to leave them alone.  Oh no.  I then received tweets from friends saying my Twitter account was sending them spam.  Double oh no.  I even received a tweet from someone asking how the heck had I sent them a DM (direct message) and they were about to report me.

So the last 48 hours has been spent apologising, removing software, changing passwords, contacting technical support at Twitter, acknowledging I’ve stuffed up and endeavouring to make things right.  To those of you out there who got rubbish from me; “SORRY!”.

Lesson: Even if you receive a message from a friend, consider carefully any link before you open it, especially those link shortening websites.

Catch you round soon.

Lincoln

And back again…..

Hello again

Been away from the blog for a few weeks now as I have been finishing off the Icehouse Owner Manager Programme. It’s been a great few months, and although we will be meeting up for a couple more implementation sessions, I really enjoyed meeting some wonderful people and learning some interesting things about me and my business. Part of the course focused on developing a growth plan for Campbell Tyson Cooper White.

My growth plan centered on many issues I have been raising in my blog. It’s about being relevant, adhering to a value proposition for clients, being true to our values:
– Personal – relevant to the client
– Inquisitive – wanting to know more
– Enthusiastic – not being a disinterested accountant!
– Future Focused – not being lost in the past we frequently report on
– Outcome Orientated – substance over form

The thing that excites me is that we have the staff to achieve this. CTCW has staff who are very interested in what their clients do, they look on and assist as though it was their business they are fighting for. They care passionately about results and know they provide value to our clients. What we need to get better at is conveying the message to those we help. And that we perhaps our greatest challenge moving forward.

Catch you again soon.

Glass half full or half empty?

Hello again
Reading the paper this long weekend, I was struck by the number of articles, letters and opinion segments that showed people shouldn’t be accountable for their own actions, attitudes or outcomes.  Be it reducing rugby scores for school kids, misbehaving youth, blaming the Government for all the World’s ills, there seems to be a reluctance for people wanting to own the situation they are in.  This can be further applied to the attitude people carry.  Lynda and I have an ongoing dialogue over whether the people we meet are “glass half full” or “glass half empty”, that is positive or negative in their general outlook.  While entertaining, it is also interesting to understand why people think the way they do.  I believe it comes down to choice.

“No one can make you feel inferior without your permission” is one of my favourite quotes, mainly because it reflects my belief that we chose our state of mind.  If we decide to be happy, we normally see, enjoy, associate with feel happy.  The same applies to the negative.  Because this concept is so powerful, we can tend to want to avoid it, and that is when the blame, denial or excuses begin.

I was introduced to the “The Line” theory some years ago.  It refers to whether you chose to operate above (Positive) or below (Negative) the line.  Being positive involves empowering yourself and understanding that you are directly responsible for the position, life, relationships, education and wealth position you are in.  Being negative involves assuming you have no control or choice over your life, never owning or being accountable for your decisions, blaming others, finding excuses or simply denying you have any responsibility.

Wayne Norrie of Revera gave me the following diagram:

 
 

The beauty of the concept is that you have the choice.  The sooner you accept that you own your attitude, the sooner you can start changing the things you don’t like (and enjoying the ones you do!).  Don’t accept it, and continue to be the victim, feeling the frustration and lack of control.  It’s your choice.

Cheers
Lincoln

Urgency vs. Importance

Hi there
It’s been an interesting few weeks for me, not so much from a client perspective as from a business development and training aspect.  At the Icehouse Owner Manager Programme I am doing at the moment, I was introduced to an interesting matrix I thought I would share with you.

In our increasingly busy lives, it becomes vital to focus on doing the right things while eliminating/delegating the wrong things.  This is best shown on the Urgency vs. Importance matrix:

 

 

 

 

Area 1
These tasks should be avoided as much as possible.  They are distractions from what is both urgent and important, and working in this area is counter-productive.  Answering private emails, reading non-work related or personal development material, personal phone calls, coffee/water cooler breaks all fit in this area.

Area 2
Funnily enough, this tends to be the area most of us work in.  What is urgent tends to get our attention and we focus on it until we make it go away.  These are typically those unplanned interruptions, such as phone calls, people at your door, those jobs that have been sitting on your desk that you know you should have done sooner and although not important the deadline makes them urgent.  We are not at our most effective when we are working in this area.

Area 3
This is our most effective area.  When we are working here, we are ensuring we have prioritised our tasks allowing for the importance of the tasks and addressing them each in terms of urgency.  This is the Nirvana area of time management.  The aim is to spend as much time working in this area as possible.

Area 4
This tends to be the area in which we spend the least time.  Urgency tends to be the driving force in our actions, and we tend towards trivial tasks.  The reason this area is so important is that typically, strategic planning and development occurs in this zone.  It is where you move away from the coal face of your workplace and plan where you want to take the business.  Many people don’t make the time to devote efforts in this area.

So when you next look at your in tray, desk, briefcase or inbox, will you think about where your next task would be classified? 

 Until next time.