This time last year, you might have been pondering Christmas bonuses or booking your summer holiday, but with a completely different business landscape in front of us, your head is no doubt filled with different questions. Here we explore four common topics keeping Kiwi business owners up at night.
“How can I put my prices up without losing customers?”
If you need to change your pricing to make ends meet, be honest and up-front with your customers at all communication points.
- Make it clear on your website and social media that prices have changed and why.
- Send an email to let all your clients and suppliers know about the changes.
- Meeting people face-to-face? Make sure they’re aware of the price hikes before they’re invoiced - otherwise you could be in breach of the Fair Trading Act.
- Provide the best customer experience you can by updating staff on any changes and advising them on how to communicate them to customers.
- Worried you’ll lose fans? Consider staggering price increases of individual products over time.
“I’ve decided to restructure. What’s the best way to do this?”
Restructuring is never easy but if it’s necessary to keep your business afloat, there’s a process you can follow to keep stress to a minimum.
- Write a proposal outlining why roles need to change for the business to succeed.
- Email employees to let them know you’re proposing a restructure and invite them to a meeting (at least 2-3 days later) to learn more.
- At the meeting talk through your proposal on how the restructure should be implemented. It’s really important for staff to feel part of the process, so invite them to give feedback via email or book to see you after the meeting. Particularly if redundancies are a possibility, it is vital that you show an open mind as to what should be done to promote your business’s objectives.
- Proposed changes to an employee’s terms and conditions must be committed to writing and provided to the employee with notification that they are entitled to seek independent advice. They must be given a reasonable opportunity to seek that advice.
“I want to sell my business. How do I get it ready for sale?”
Selling your business involves a lot of homework. You need to get it looking as “shiny” as possible before getting it valued by your accountant or advisor. Here’s how:
- Sell assets you’re not using, stop investing in long-term projects and put together a realistic financial forecast.
- Prepare a business plan that includes how well the business is running and plans for growth.
- Sort out any legal issues or staffing problems.
- Bring health and safety, cloud solutions, and bookkeeping software up to date.
- How are your website and social media looking? Could a buyer hit the ground running with them?
- Talk to your advisors about ways to boost your sales revenue and pre-sale profit margin. Remember it’s the last two or three years’ profit, and future maintainable profit, that determine the value.
“Am I eligible for more Government funding?”
Businesses who employ fewer than 50 staff could be eligible for loans of $10,000 plus $1,800 per full-time staff member, thanks to the Government’s Small Business Cashflow Loan Scheme running until 31 December. To apply, there is a list of things you’ll need, including your NZBN and proof that due to Covid-19 your business suffered a 30% drop in actual or predicted revenue between January and June this year. Find out more here.
The Business Finance Guarantee Scheme is another option - it supports operating cash flow disrupted due to Covid-19. Participating banks can provide new loans, increased limits to existing loans or a revolving credit facility to eligible businesses. The scheme supports banks to take on lending by the government taking on the default risk of up to 80% of the loan. Find out more at www.business.govt.nz
Are you doing business outside of Auckland, Wellington and Christchurch? You could get a piece of a $3 billion pie, as part of the Provincial Growth Fund which aims to help grow economic development in the regions over the next three years. Click here to find out if you’re eligible.