Engine Room Blog

All sorts of new things have been happening at the Engine Room lately and I thought it was time to give you an update.

If you think Philippa and I seem to have been missing in action a bit lately you would be right.  We have been very busy on a series of new projects, getting organised for your 2013 year end accounts and bringing on some awesome new team members.

We know that the team in Pukekohe have been looking after you with their usual care and attention.The biggest project has been the purchase of RWL Group – an accounting firm in Tauranga.  Run by Rachel Wilson, RWL Group has the same philosophies as us. Rachel was looking to grow the business and the Engine Room brings additional skills on the technology front and the capacity to support her team and clients.

We welcome Rachel and her team

Cherie is the resident Xero Consultant and loves technology. She is looking forward to learning more about cloud solutions and introducing them to our clients in Tauranga.

Zuleika is the friendly face at reception, and previously a Quickbooks trainer she loves learning about Xero.

Jenny, a Chartered Accountant, currently works at home so she can look after her 10-month-old son. 

For our existing clients in the Bay of Plenty we will be a bit more convenient!   If you are in Tauranga please drop in and say high to the team – they are at 24 Tenth Avenue, just off Cameron Street.

At the Pukekohe office things have been busy as well

Jin left us in April to pursue other opportunities closer to his family and with their first baby on the way we wish Jin and Cherry all the best for the future.

We have three new team members in the office:

Sarbina works full time and is Xero Certified. She is enjoying getting to know our clients and working with Manon on monthly and annual accounting.

Sandra is with us three days a week, keeping the IRD in line and learning about Xero and GST!  Sandra was previously an occupational therapist, but knew she always wanted to do accounting so has recently retrained.

Nicola also works three days each week – a UK accountant from the Isle of Man; she is really happy delving into the more complex annual jobs.

As you can see from the photo below we have grown a lot this year – though with at least three more enthusiastic cake bakers in the team we may be growing in other ways as well!

We regularly see business owners working 60 to 80 hours a week to generate their income. 

As a business owner you need to think about whether this is the best use of your time.  Are you undertaking high value work or busy work?

No matter what size your business is now, if you want it to grow you need to start thinking and acting like the owner of a business you want it to become.   If you have a business doing $1m turnover and you want it to do $3m turnover you need to start thinking and acting like it is $3m business now.

The key to this is LEVERAGE – in other words maximising your return from the effort applied.

You need to make sure that all your business assets are working for you giving maximum return for the effort applied, whether they are plant, systems or staff. And you.

Start by looking at what you do every day.  You might be busy but are you efficient or effective?  Are you doing the right things? You might be very productive doing jobs faster than anyone else but if you are doing the wrong thing you are not effective.

As a business owner opening the mail might keep you busy, but should you be doing it? (When I was a junior accountant we were taught the importance of senior management overseeing this job to prevent the risk of cheque theft – given the number of cheques used these days it seems to be a bit redundant.)

If you free yourself up to do the important work, like thinking about how you will make your business grow or visiting key customers, you need to stop doing the busy work. 

I suggest that for the next week every time you start a job, think about who else could do this job.  Start freeing up your time to do the important work.

It is very easy to be busy, it takes courage to do the hard work.

What can you do to stand out from the crowd?

2013 seems to have got off to a roaring start, particularly now everyone is back from the beach.  It never ceases to amaze me how quick those first 6 weeks go.

At this time of year we really like to bed in our plans for the next 12 months.  While we know we won’t always stick to them to the letter; setting our overall goals, quarterly targets and our annual budgets gives us a good basis for the year.

We do this in a series of steps:

1.   We start by reviewing our business plan – this was given a good review three years ago and now gets a yearly dust off to make sure we still want to achieve the same things and how we are going – are we still working with the same end in mind? 

2.   Then we pull together the plan for the year.  This fits on one A3 piece of paper, with one big goal for the year.  We then identify the three things needed to achieve to reach that goal with specific targets – for example in your business that might be how many new customers your want, what their average spend might be, and your gross margin target. 

3.   What are we going to achieve in the first quarter?  On that same piece of paper we identify the first quarter goals – 90 days of action.  How will we know we are on track?  What do we need to do to hit the ground running?  What does each team member need to focus on? What is the theme for the quarter? One of our clients is targeting to have 80% of their customers rebooked for their next appointment each month. 

4.   Put together the budget – as accountants we know that it is the numbers that tell you how you are doing – and when you are off track.  Quantifying strategic plans into a budget enables you to identify whether you are on track throughout the year, what impact growth will have on cash flow, where costs are going to increase and what extra resources you need to fund growth. 

5.   Finally, the marketing plan – the key to driving growth.  We identify our annual marketing plan and a detailed plan for the next 90 days, what events we are running and where will we advertise.  By tying this back to the overall plan you can identify what you want to achieve from each campaign and how you will measure it. 

We are fortunate to have a lot of wall space and white boards in our offices, so this is a very visual process.  As we get in to the more detailed planning we get key team members involved.  

For us one of the key outcomes from last years plan was employing a marketing person.  Like many business owners we always thought it was something an admin person could do and that we could manage it ourselves.  With the philosophy of what you focus on drives success, having someone focusing on marketing has proved to be a real difference to our business. 

So do you have a plan? And what are you focusing on? 

We have a strategic planning process for businesses like yours – if you are interested in finding our more give Margaret or Philippa a call on 0800 2ENGINE (Approved for NZTE funding of up to 50% for qualifying businesses).

Wishing you and your family a very Merry Christmas.  

We'll be back at the office on Monday 14 January. Have a great holiday - we'll see you in 2013!

From all of the team at the Engine Room, 

It always amazes me how quickly Christmas and the end of year sneaks up on us! Like us, I’m sure by now you are all caught up in pre-Christmas events and festivities.

As we prepare for the end of the year and a (hopefully!) warm & sunny summer holiday, here’s our 2012 round up.

Looking back at 2012, it has certainly been a mixed bag for most business owners. Our retail clients indicated a reasonably slow start to the Christmas season, and other business owners have had a reasonable but not spectacular time. 

Despite the somewhat turbulent market, we’ve also had a number of highlights this year. Our team has grown to include three new members – Pam Shipley in January, Belinda Ford and Monique Davey in August.    

In February, at the annual Xero Conference, we were proud to be awarded the 2011 100% Xero award for our commitment to implementing Xero for our clients.

Following our belief that Xero can provide the right solution for any business, in September we hosted our first Cloud Expo, showcasing the variety of cloud software solutions on offer and their many advantages for businesses of all sizes. The Expo was a great success (so much so that we’re holding another on 8^th February 2013!) and was well attended by both exhibitors and business owners. 

In October, I took a short trip to England where I had the opportunity to speak to a 120 British accountants about Xero.  They were all interested in how to implement Xero in their business and for their clients.  It was somewhat daunting at the time, but exciting to see how far ahead of the game we are at using and implementing cloud solutions.

On the subject of cloud computing – in January we’ll be launching  a new company called “Work in the Cloud” (www.workinthecloud.co.nz) which will focus solely on spreading the word and implementing cloud software for both accountants and their clients.

As we lay out our plans for 2013 it looks like it will be another busy and exciting year for the Engine Room team.

Wishing you all a safe and happy Christmas, and of course a very prosperous new year, 

Margaret, Philippa & the Engine Room Team.

Have you ever bought something and felt just a wee bit guilty afterwards? Have you had doubts that you chose the right size, colour or the right shop to buy from? Whether it was that expensive Christmas present for your mother-in-law, the new light fittings for your bedroom or the mechanic you chose to service your car, most of us have had that feeling after a purchase at some point.

It’s called “Post-purchase Dissonance”, or, the “Post-purchase Blues” as we like to say. It’s the doubting feeling many consumers feel after they’ve made a purchase.

You may be able to remember when you’ve felt like this, but have you ever considered that your own customers may have this feeling when purchasing a product or service from your business? And if so, are you doing anything to combat it?  

Just as you reassure yourself after a purchase, saying things like “Yes I really did need that” or “It was definitely worth the extra $50”, you also need to reassure customers that they made the right decision to purchase from you. This may be as simple as sending a “Congratulations on your purchase” note or a list of answers to Frequently Asked Questions. However, fail to do so and customers’ doubts may escalate into full-blown regret and dissatisfaction: they won’t return to your business and may tell others not to purchase from you.

Leading into Christmas, one of the peak sales periods of the year, this issue is especially important.

Thankfully, overcoming your customers’ post-purchase blues is surprisingly simple. Our latest e-book has 16 easy ways to move your customers from doubtful to delighted. They’re not expensive and don’t take long to implement.

Download it for free using the link below and make sure your customers leave feeling reassured, happy and ready to spread the word about your great business this Christmas. 

Download the e-Book

Christmas, it’s upon us again! Yes (whether it agrees with our morals or not), Christmas retail is well under way, Christmas jingles are filling the malls and Santa’s jolly face is lining our streets.

Christmas is both a joyous and stressful time, and can be a tricky one for business owners. I recently presented at BNZ Connect in Pukekohe (a great monthly event for local business owners more details here). My topic was “How to ‘Keep Calm & Carry On’ Business at Christmas”. As it was only early November, I could feel the cringe in the room when I mentioned the “C” word. Yes it seems early, but as a business owner or operator, it’s important that you’re prepared for Christmas. 

Check-off these 12 days of Business at Christmas to make sure you’ve got everything covered:

1. Annual Closedown

Closing down for the holidays? Make sure staff get at least 14 days’ notice. They are entitled to public holidays on Christmas Day and New Year’s Day, and paid or unpaid leave for the rest of the period. If any employees have accrued a large amount of leave, Christmas is a good time to encourage them to use it.

2. Keeping it Open

Staying open? Plan your staffing well in advance. At the very least you’ll need someone to cover the essential tasks (like payroll, clearing voicemail). Make sure skeleton staff have “emergency” contacts for relevant managers and suppliers in case anything goes wrong. 

3. Extra Staff

If you plan on keeping up a full service, start thinking now whether you’ll need to take on extra staff – casual, part time or fixed term. Even if you take on casual staff they will need employment agreements. See www.dol.govt.nz for the latest rules on pay rates and a very handy “Employment Agreement Builder”.

4. Tax: Gifts & Entertaining

Staff Christmas functions are 50% tax deductible and staff/client gifts are 100% tax deductible (just keep the latter below $1,200/year to avoid Fringe Benefit Tax). 

5. Telling your Customers

Alert customers of your seasonal hours to avoid any misunderstandings. You can use this chance to remind irregular customers of your business; send a card or email, phone or even advertise in the newspaper.

6. Managing Stock

Christmas stock orders needn’t be daunting. Prepare a stock forecast by looking at sales records or your stock system.  (Note: if you haven’t got a stock system or method of obtaining accurate sales records, add it to No 11 on this list!). Look into flexible stock options available to your business, like consignment stock or stock lines available at short notice.

7. Important Dates

January: 15^th (November GST and provisional tax), 20^th (PAYE), 28^th (December GST)
February: 28^th (January GST)

8. Bargains at the Sales

For some, Christmas is synonymous with “Sale”. Before you join in, consider the impact that discounting will have on your profit and customers: you may not get the returns you expect and your customers’ impression of your value may greatly decrease. Try adding to perceived value, rather than decreasing price.

9. Existing Customers

Christmas is a great time to thank customers and remind your customers of the bond they have with your business. Why not send a promotion out to your client database or offer free Christmas nibbles at your store.

10. Taking Time Out

At the very least, take a few days off work and recharge. If you need to keep an eye on things, Cloud systems like Xero are great for keeping in touch with the business while you’re out of the office.

11. New Year’s Resolutions

Reflect on the year that’s been, what you achieved, what changed – are you where you thought you would be? Then look ahead to 2013: where do you want to be in 12 months’ time? Set goals and talk them through with your advisors and staff.

12. New Year, New Customers

Over the holiday period think about what you’re doing to attract new customers. Why should people buy from you over others? What is your point of difference? Where are you advertising and is it working? Maximise your existing customers; how can you find more like them or upsell more? Have you asked them for referrals? 

And remember -

Keep Calm, it’s only Christmas.

As a business owner one of the first things you realize is that it is really important to get your taxes sorted.  The consequences of failing to get this bit right can be expensive and time consuming when you should really be working on or in your business.

 But whom do you get to help?

 There are lots of options:

1. DIY – many business owners start with this option – it appears to be cheap and at the beginning when things are small it is probably OK.  Though you can find paperwork can take over your life and sap the enjoyment out of your business
2. Find a book-keeper – They come in a variety of shapes and sizes, from experienced accounts clerks working from home to franchised groups like Smart and SBA.  Depending on the size and type of business you own, this can be a great solution if you find the right person.
3. Use an accountant – this is where it can get tricky.  In New Zealand there is no restriction on the use of the term “accountant”. Anyone can say they are an accountant, which means they can vary significantly in skill, experience and professionalism.

So when do you need to use an accountant?

Qualified and experienced accountants can bring a wealth of knowledge to your business no matter what stage your business is at.  Many have grown their own businesses and have experienced the same challenges and pain of going through that process.    While some accountants focus on compliance – preparing and filing tax returns – a good accountant can bring many additional skills:

They can:

1. Make sure your business is structured correctly for both asset protection and tax management purposes.
2. Update you on changes to tax and other business law
3. Assist you with budgeting and cash flow management
4. Assist with securing business finance
5. Analyse your business performance and suggest ways to improve it
6. Help you make and implement your plans for the future
7. Assist you with buying or selling your business

If you are looking for a real accountant feel free to give us a call.

As business owners in these rapidly changing times, we constantly need to be reviewing our position and looking to update and refresh what we do.

In many industries, and particularly service businesses, there is now a low cost of entry.  This can mean that you have new competition popping up all around you.  Fortunately for you, though unfortunately for customers, they can be here today and gone tomorrow. 

To counter the threat that these new businesses bring there are  things you need to focus on:

1. Being “top of mind” with your customers
   How often do you communicate with your customers?  If you are not contacting your customers at least every 90 days whether it be by email, telephone, a newsletter or in person, it becomes very easy for a new business to woo their attention. 
2. Make your core business really efficient
   There are always little things that your business can do better and technology often gives key efficiency gains.  Lean manufacturing or service principles are a great way to start.  Take the time to map out your processes and ask your team why you do something. It’s a great way to identify unnecessary processes.
3. Be open to new ideas
   Have you looked at your industry trends lately? Are there new ways of doing what you have always done? What stage of the cycle is your business in?  Is it still growing or is it mature or in decline?  (More about this in our next blog)
4. Try something different
   If you keep doing what you have always done you might get the same answer (if you are lucky).  Have a plan and try something new, measure results, if it works keep going, if not try something else.
5. Stand out from the crowd
   If no one knows you exist it is pretty hard to get new customers, - join a network, support a community event, be proud and talk about your successes.