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Business Structures

Your business structure should take account of the following factors: Risk. Business is a very risky place and your business structure should minimise risk as much as possible. Often ignored until it’s too late e.g. when the GST or rent is months in arrears! Practicality. Overly complicated structures e.g. trading trusts are OK in theory but not very practical to use. Try finding a professional trustee these days! Cost. Always a factor and whilst spending excessively is unwelcome, saving a few...

Starting a Business Part 2

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Increase Your Business Turnover and Monitor Your Performance

Every business owner needs reliable figures to regularly check on business performance.  Collecting data is useful in setting realistic targets towards increasing your profitability in 2015, and gives a baseline for monitoring your business throughout the year. Types of measurement data to collect: your annual customer numbersaverage salesnumber of customer visits In a retail store, for example, (although this exercise is appropriate for other businesses), you need to collect the following ...

Starting a Business Part 1

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7 tips for keeping your accounting organised

Here are 7 useful tips for keeping your accounting organised: Bank Accounts. Always use separate business bank accounts for your business transactions. Your private bank accounts should be kept wholly for private transactions and mixing up business and private transactions in your bank accounts is a recipe for disaster. The cost of business bank accounts these days is very low and there is no excuse for not having a business bank account or accounts. Get in the habit of making regular transfers...

Buying a Franchise

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How to cope with business competition

In the area of business competition there’s one thing I’ve learnt over the 35 years I’ve been at the coalface of advising SMEs and that is, no matter how many other competitors there are in your line of business, you can still be successful if you get your core business activities working the right way. The best example for that locally are cafés which are springing up all over the place. Some are busy all the time, some are deserted. Yes location and being on the sunny side of the street...

Buying a Business

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Selling Your Business

Just like putting a house on the market, selling a business requires careful planning, preparation and presentation, so before you rush off half-cock to a business broker or list on Trade Me stop, think, do some research and take some good advice from a decent accountant who’s long been involved in business sales. Disappearing Cash If you, like many business owners, have been pocketing the takings, now is the time to start paying ALL of these into the bank. A client of mine was trying to buy h...

How to avoid a painful tax audit

Even the NZX can be caught out by a tax audit. The sharemarket business paid $1.2 million extra tax after the Inland Revenue Department checked its books. For the average small business owner, the thought of a visit from tax inspectors is enough to make them shiver. We asked two experts how to minimise your chances of a painful dispute: Recognise the risk You may think there’s no chance of being audited if you are a little one- or two-person band. But added together, small-to-medium enterprise...

Getting to Grips with Tax

It’s a sad fact that tax is a big part of being in business. Not only do you have to pay over a large chunk of your money to the IRD in various taxes, but like it or not, you also have to act as tax collector, as well as working unpaid for other Government agencies, whether it’s collecting court fines or child support. Unfortunately some businesses owners and self-employed people never seem to be able to cope or get to grips with income tax, and it just becomes an insurmountable, frightening...

The Importance of Shareholders Agreements

When anyone is buying into an existing company, or setting up a new company with colleagues, friends or even family, it is essential to document how the relationship is going to work and set ground rules for what happens in the unfortunate event of a dispute. When a business relationship is new and exciting, no one wants to think about the bad things that may or may not happen in the future, but ideally the time to prepare a shareholders agreement is before any shares are purchased or issued. No...

The Importance of Online Security

For some years now we have been told repeatedly that we must get online for just about everything, whether for software, apps, shopping, communication, data storage – you name it – we must do it online! It’s worrying then when there are regular headlines about the latest hack into someone’s data or whether someone has seen someone else’s data online accidentally. I’m still getting emails from scammers using clients’ Yahoo email addresses and emails even from someone using my email ...

What’s Good (and Bad) about Cloud Accounting

Fashion and clever advertising has a huge influence on our lives, especially where technology is involved. Sometimes this can be positive but often it’s bad for us e.g. you see folks out and about who don’t look like they have two pennies to rub together with the latest expensive smartphones or 60” surround-sound TV’s in houses that are unbelievably tatty. So is cloud accounting a fashion or is it here to stay?There’s no denying there’s loads of good stuff about cloud accounting:Back...

How to win with GST in New Zealand

Like all taxes, GST can be complicated, but for most business owners it can be pretty straightforward once you get to grips with the basics. To do so, it’s necessary to understand how GST works.Many business owners think GST costs them money, but in fact, as a GST registered entity, the typical business owner is merely acting as a paid (yes, paid!) tax collector of behalf of the IRD. This is because GST is only a cost to the final consumer, not to the GST registered business owner who can recl...

10 ways your accountant can help you increase your profit

If your business is not generating the amount of profit that you would like and deserve, then the first person you need to contact is your accountant.Let’s face it, accountants are the ultimate trusted advisor and the cornerstone of the financial world. Your accountant should be the first person you call to help you grow all aspects of your business, especially your profit.Often your accountant can see ways to improve your bottom line that you might miss because you are in the trenches ev...

Understanding ACC

Dealing with the Accident Compensation Corporation (ACC) is a major business cost, especially for those in trades or lines of business where accident rates are high, yet many business owners just pay ACC bills willy-nilly without checking their correctness or looking for the many ways to reduce ACC.Here are some pointers to get you thinking:Even the new simplified ACC bills are difficult to understand so get your accountant to check the bills before you pay them. Many ACC bills contain...

How to succeed with pricing

Getting your pricing right in business can be tricky, and it’s all too easy to get it wrong. More often than not, business owners under price and leave money on the table. This is because business owners typically worry more about prices than the customer does. The customer is normally more concerned about other factors like reliability, honesty, getting the job done right first time, punctuality, speed of service or response, and willingness to put things right if they go wrong. How do y...

How to become a millionaire retiree

How would you like to have a $1m nest-egg on retirement?  Think it’s not possible?  Well you can, and you can still spend 80% of your income!Assuming you're 37, can get interest of 5% per year and can save money, take a look at the table below....

How to learn more about your competitors

There are many reasons why you need to learn more about your competitors but my three favourites are:  To avoid their mistakes. Copy and build upon what they do right. Know their weak points when quoting against or taking their customers off them. Generally, benchmarking can be useful to find out about your competitors. Of course, benchmarking data does have its shortcomings. For example: it might be difficult to determine ideal sample sizes or find an exact business match, s...

5 benefits of cloud accounting

Cloud accounting has been around for quite a while now, but even still, the idea of taking our data to the cloud can be a little confronting for some. With these technological enhancements, there’s never been a better time to understand the opportunities to optimise and grow your business. If you’ve been meaning to brush up on the great benefits, this one’s for you.Read more about the benefits of cloud accounting here....

Income Tax - Lessening the Pain!

‘‘There are only two certainties in life – death and taxes!’       Although it is difficult to tamper with the sand flowing though the hour-glass of life, good habits can slow its pace.  Good taxation planning can ensure that taxes can be managed so there are no nasty surprises resulting in urgent phone calls to the bank manager a few days before due date or suffering unpleasant IRD penalties. What processes should business owners adopt to plan their regular inco...

How to avoid an IRD audit

Whilst statistically speaking the chances of being selected for an audit are slim, it nevertheless features  way up the rankings as being one of life’s most stressful and unpleasant experiences, and as such, like all nasty things in life, best avoided at all costs!These are the most common ways you can be selected for an audit and what you can do about it (or not as the case may be!):Using a dodgy accountant Use an honest accountant, one who will help you save tax but not tell you what y...

How to succeed with cash flow forecasts

Preparing an annual cash flow forecast can tell you a lot about your business. It can warn you with plenty of time to spare that you’re not going to have enough cash to survive the next year without getting additional working capital — which is vitally important to know. Or it could be the wake-up call you need to make some changes in your business. You might need to make a tweak or two, like increasing prices or shedding ineffective staff, or you could discover something more serio...

Protecting your business name

If, like many business owners, you’ve put a lot of thought and effort into your business name it makes sense to try and protect it from being copied, whether inadvertently (by someone who had never heard of you) or deliberately, by another, especially if you’ve linked this to a great domain name.Unfortunately, it’s not easy to protect your business name in New Zealand as unlike elsewhere in the world, there is no register of Business Names. Yes they have introduced Business Numbers in New ...