Engine Room Blog

Amendments to the Employment Relations Act 2000 mean that from 1 July 2011 employers are required to retain a signed copy of all employment agreements or current signed terms and conditions of employment.

Where an employer has provided an employee with an intended agreement the employer must retain the intended agreement even if the employee has not signed it or agreed to the terms and conditions specified. An intended agreement cannot be treated as the parties' employment agreement if the employee has not signed or not agreed to the terms and conditions.

If the employee does not accept an intended agreement, the employer should enter into good faith negotiations to reach agreement.  If negotiations are unsuccessful, the employer should record what happened and the outcome of the negotiations.  A copy of the intended agreement must be retained on file along with the current terms and conditions of employment, signed or unsigned.

Employers are required to provide a copy of the agreement on request from their employees.

From July 1 2011, labour inspectors will be able to seek a penalty against an employer who is in breach of legislation relating to employment agreements, including the requirement for all employers to retain a copy of the intended and current employment agreement or terms and conditions of employment, whether signed or unsigned. Employers will be given seven working days notice of to fix the breach. Where the breach is not remedied the inspector can take a penalty action in the Employment Relations Authority.  Click here for more information. 

 

• Budget deficit of $16.7bn or 8.4% of GDP, as expected, and surplus forecast for2015, a year earlier than forecast last year
• Net debt to peak at 29.6% of GDP in 2015 (below market expectations of peak around 33% of GDP), and decline thereafter and be repaid in full by 2024
•  Should placate rating agencies
• Investors to see four new equity offerings (subject to re-election), an Earthquake bond and inflation bonds, and the local government funding agency to start this year
• Kiwisaver Member Tax Credit to be halved and Member and Employer minimum contributions to be raised from 2% to 3%
• Government to review taxation on investments (Minister of Finance indicated this in his lock-up speech)
• Treasury is forecasting short and long-term interest rates to remain largely unchanged from current levels over coming years, and for the NZD to steadily decline by a cumulative 18% over the next four years.
• An impressive budget that provides confidence for maintaining portfolioallocations to NZ assets
• In terms of addressing NZ’s long-term economic performance, while not delivering any major policy initiatives, the tone of the Budget appeared to reiterate a solid commitment to improving productivity and incomes in NZ. It needs to - page 3 of the Budget document had a chart that shows per capita real GDP in NZ has not grown since 2004, and noted that if average growth over the past six years had been the same as that of the preceding 15 years, per capita income would be 11% higher now.

This summary was supplied by Craigs Investment Partners

• Working for Families Abatement rises from 20% to 25%
• Kiwi SaverTax Credit reduces by 50%, employer and employee miniumu contributions increase to 3%
• Opportunities to invest in NZ Assets through partial privatisation of for state owned energy companies
• Changes to student loan scheme
• Increased IRD audit and prosecution of tax evasion - particularly the property sector, seasonal workers and the hospitality industry
• Students over 55 may only borrow for fees and course costs.

Clients often ask “How do I grow my business?” There are lots of different techniques and tactics that different types of businesses might use to do this but in fact there are only 4 ways to grow your business.  These are:

 1             Increase the number of customers – but only the ones you want. 

2             Increase the transaction frequency – this means getting your customers to come back and buy more often than they currently do.

3             Increase the average value – this could mean increasing the quantity customers buy or increasing the price you charge for your product or service.

4             Reducing the cost of making your product or delivering your service - this is often achieved by making the process more efficient.

Start with these four ways and think about what you could be doing in your business to address each one.

 

Now we live in an online world business owners need to be vigilant.  It’s not just the nice Nigerians whose long lost relative want to share their millions with you. 

There are also the scammers who want to do business with you. Approaches can often seem quite legitimate - though if it seems too good to be true it probably is.  They are often friendly and plausible, but is you are selling online you need to be alert to unusual approaches or orders that are of size larger than you expect.

While payment in advance seems a safe option it is not always enough…

Smart business owners always check the validity of a credit card before processing it and shipping goods.  It is likely to be stolen and you bank can check very quickly for you.  More likely to catch you out is the customer who sends a cheque.  A cheque drawn on an overseas bank takes up to a month to clear. 

If you get caught out don't expect your insurance company to help either - this is fraud not theft.  You have supplied the goods or services in exchange for payment - the payment is fraudulent. 

Remember to report approaches to the Commerce Commission so they can post it on their website and warn others.

 

Cash can be elusive in a small to medium sized business.  A surprisingly large number of business that fail are showing good profits but have run out of cash.  Understanding the cash cycle for your business is vital to its ongoing survival.  Do you ask yourself “Where has the money gone?”   Careful management of debtors and stock are often the key.

Having to pay for stock before you sell it or before the customer pays is often a problem for businesses, particularly as they grow, or if there is a sudden downturn in sales.  Understanding the seasonality of your business and planning stock levels to reflect this can help. Quitting surplus stock even at cost can be a lifesaver for businesses - cash is always king.

Debt collection is often difficult for small businesses when they personally know the customer.  Contracting it out can help.  Always make it easy for the customer pay - print bank details on invoices and statements, accept credit card payments for larger sums or don't offer credit at all.  Always credit check new customers.

With products like Xero, the on-line accounting system at www.xero.com, you get daily automatic feeds from your bank so there are no excuses for not keeping in touch with your cash position.  Xero’s innovative dash board tells you how much money is outstanding.  Xero let’s you take control of your financial records and even share it with your accountant – at the same time! 

 

 

Most small businesses don’t have the time or budget for large marketing campaigns.  But that doesn’t mean you can’t stay top-of-mind with your customers.  Try these small efforts with big impacts:

 

• Use free samples to make your business stand out.  Whether you are a delicatessan or a beauty salon, there is something you can share with customers to make you stand out from the competition. 

 

• Self-publish a catalogue or brochure of your products or services.  It’s your job to communicate your offering to customers.  Consider including a customer survey with the catalogue.

 

• Send special promotions to long standing, loyal customers.  Just like new customers, your long standing customers should be romanced with incentives to keep them coming back and give them a sense of priority and prestige.

Over the Easter period there are a lot of issues for business operators to be aware of.  Which days are public holidays?  What are the employee entitlements?  What days can I open? In 2011, there is an additional issue - ANZAC Day and Easter Monday falling on the same day.  Along with establishing what payments need to be made to employees for what days, there are also Shop Trading restrictions in operation on some of those days, under the Shop Trading Hours Act Repeal Act 1990, that business operators need to comply with. 

Read more here...

Running a business without a budget is like navigating a ship without a compass. As the financial year end approaches you need to set aside time to examine and revise your budget and cash flow to know where your business is now going and what challenges lay ahead.

Think about the key business assumptions and drivers and whether they have changed - in particular, your sales expectations and margins based on your current pricing.  Analyse your spending trends and plans for purchasing and overheads over the remainder of the financial year.  Identify and cost special projects that will take place, consider the impact on sales and costs of seasonal fluctuations.

How will the Canterbury disaster and the unrest in the Middle East impact your business?

Now that you have a realistic budget and cash flow do you know what it means?  What are the implications on your cash reserves or lending facilities?  Do you need to revise expenditure and projects to a time when there is improved cash flow from customer receipts?

It’s important to stay on course and stick to it, and compare it to what actually happens.  Sharing it with your team, financial advisors and accountant can help you ensure greater success in achieving it.

Running a business without a business plan is like rock climbing blindfolded. Your chances of making it successfully to the top are slim. And the process will surely be a death-defying one.

A business plan is a step-by-step guide to running your business and creating a product or service that will make it in the marketplace. Now is a great time to review your business and plan forward.

Whether it’s formal or informal, every business has a plan. The smart owner of a local hair salon would have assessed the need for a shop in that area of town, the ability to attract clients there, the appropriate amount of chairs, etc. The owner who waits to figure things out using trial and mostly error will be lucky to be left with his/her wits, much less any customers.

Writing your business plan down:

1. Helps you identify all aspects of business operations
2. Increases your chances of considering all the important factors in your business
3. Increases your chances of success
4. Provides a means to analyze and determine how to boost your business out of the doldrums