Creativity Is Not Enough

New Zealand is ranked one of the highest countries in the OECD for hatching new ideas, but quite lowly in taking those ideas to the world and turning them into big business.

Why is this and what can be done about it?

New Zealand Trade and Enterprise has recently released a report entitled “Playing to Our Strengths. Creating Value for Kiwi Firms” and in it seeks to identify traits that hold us back in becoming successful business owners and what to do about it. Those traits can be summarised as follows:

Satisficing. We are more driven to have a good lifestyle than kicking on and creating significantly more wealth.

Thinking for our customers. We tend to presume too much and view the world from a distinctly Kiwi perspective. This often results in focussing on short term issues, rather than building long term relationships.

Self reliance. The old Kiwi mentality of “do it myself” which typically results in effort being too thinly spread and performance in critical areas of the business being lower than it needs to be. Reluctance to plan for succession and picture the business beyond the current owner is also typical.

Tall Poppy. This causes us to have a profound reluctance to give and receive feedback and a similar reluctance to use specialists. Along with the fear of failure there is also almost a fear of success and this tends to stymie the willingness to experiment and take risks.

Undervaluing IP. Recognising the need to protect the IP that is created as part of the innovation process is important so that future revenue generation opportunities can be exploited.

The report goes into explaining a range of strategies that owners of entrepreneurial businesses should consider adopting, but as a business advisor I have no hesitation in highlighting the need for owners to engage professional help in their business and “turbo charging” its growth. Rather than relying on trial and error, using a specialist, be it a good accountant, specialist lawyer or business coach, can make a huge difference to the success of a business and also the speed in which that success will be achieved. The ability to step back from the coal face and focus on the longer term vision is essential to take a business to the next level. Sometimes that ability can only come from an independent and objective point of view.

If you would like to discuss your business and how to take it to the next level, contact the author at iconnorthshore@gmail.com

A Short Course in Human Relations

The list below appears in a number of places and I can't seem to find out the original author. Whoever it was, I think they are very clever and perceptive and I thank them for their effort. If anyone knows, please tell me so I can give due credit.

Can you work them into your discussions with colleagues, staff and family over the next week?

The 6 most important words:
"I ADMIT I MADE A MISTAKE."

The 5 most important words:
"YOU DID A GOOD JOB."

The 4 most important words:
"WHAT IS YOUR OPINION?"

The 3 most important words:
"WOULD YOU MIND?."

The 2 most important words:
"THANK YOU."

The 1 most important word:
"WE".

The least important word:
"I".

Discovering the DNA of Profitability for Your Business



Business owners often think that they need to take dramatic steps to improve the profitability of their business. Many believe, for example, that if they want to double their profits they need to double their sales. Still others think that they need to take on more people, bringing with them, many more headaches. This doesn't have to be the case. The difference between the DNA of a chimpanzee and a human is only 2% but what a difference that makes. 2% less and you are spending the rest of your natural life learning how to crack open a nut and 2% more and you can fly a rocket to the moon. You may be surprised to find that the difference between a successful and an unsuccessful business is surprisingly similar.

So what is the DNA of profitability in a business?


Broadly speaking there are five simple areas that we can look at to improve the profitability of a business.



Join us for a 2 hour workshop to find out what these 5 areas of potential improvement in a business are and how they apply this to YOUR business.



By making small changes in each of these areas you can achieve an increase in profits of 61%, or more. Why 61%? Join us and find out how we get to this figure and how to do the math for your business.

The workshop is being held at:



Albany Executive Motor Inn,

15 Corinthian Drive

Albany



Tuesday 1st December

5:45pm for a 6.00pm start



Cost is $49.00+gst per ticket, but for subscribers to my blog it is free!

More Help to Get Exporting

A couple of recent announcements from the government are positive news for those growing their export markets, or those considering how to start.

Well covered in the press was the Free Trade Agreement signed with Hong Kong last week by John Key. This FTA joins a growing list and puts New Zealand exporters in a much better position to be competitive in (mostly Asian) markets and build on our other strengths that we can bring to the table, such as quality, good hygiene standards, design, honesty, etc. Perhaps even more important is the noise that the US is making that they will join the Trans-Pacific Partnership, which is likely to be a forerunner of an FTA with the US.....we hope.

Another announcement that has received less press coverage is of an increase of $200million in trade guarantee facilities being provided to exporters to help them comply with trade bond and credit guarantee requirements. "The extension of three trade credit guarantee and bond products will help exporters grow their business and keep New Zealanders in jobs as we emerge from the recession," Mr English said.

"This Government has made it clear that one of the best ways to ensure New Zealand grows strongly out of the recession is to increase exports and investment. Ensuring our exporters have the credit flows to maximise the opportunities that flow out of recent trade developments is crucial."

Fair access to markets and security of payment are two areas that need to be considered and strategies built around when planning export marketing. There are lots of other (labeling, overseas legislation, insurance, shipping, distribution, etc, etc) but this should not put you off seriously considering export as a growth strategy for your company.

The country sure needs more people exporting and if you can make it work with the current exchange rate, the chances of significantly improved profits as the NZ dollar eases back, which it will do at some stage, will make the hard yards of developing new markets well worth while.

Get into it!

For help with these elements and all the other things you need to think about when considering a move into exports, contact the author: Andy Burrows at iconnorthshore@gmail.com or phone 09 912 1901

A Study in Systemisation and Planning

I have returned from helping out at my youngest son’s Year 6 camp, totally exhausted but impressed with the organisation and how the kids coped. The tiredness came more from a lower fitness level than I would like and sharing a room with 4 other snoring fathers. A couple of good night’s sleep and I will be more alert. The lack of fitness will take a bit longer to address and is something I will work on over the next few months!

The kids had a ball. Many were challenged beyond their comfort zone......as were many of the adults. All were well fed and watered and kept busy every waking moment. The satisfaction level came in no small part to the planning and systemisation that went into the whole exercise. The school runs the same camp every year, but with new parents coming along and also new teachers from time to time, the success depends on the processes being well documented and improved upon each year with a review of “what can we do better next time”. To have about 100 kids organised from 7am to 10pm to be at the right place at the right time, fed good food in sufficient volume and supervised to ensure safety needs a list of checklists, procedures and forms somewhat akin to Desert Storm.

Could your business operate as smoothly if you or some of your key staff were to change suddenly? Would all that knowledge walk out the door, or do you have your procedures and processes well documented?

Your Operations Manual
To improve the operational security of your business and to increase its market value, I recommend that you put some serious effort into producing a clear operations manual. To create your business manual, think of it as “the book of your business”.
If writing it is likely to take too long use a dictaphone to record “what” (the system) you do and “how” (the procedure) you or your team do a particular thing in your business. Then have someone type that up for your manual. This then becomes your “living document” which can be changed or improved as circumstances dictate.

All areas of the business can be covered. People ask me sometimes, “Where do I start?”. I usually suggest with basic opening and closing procedures for the business and go from there. Other areas you may want to cover can include:-

Business Management

• Reports generated — daily, weekly, monthly, quarterly, annually
• Accounting practices
• Banking procedures
• Payroll procedures
• Regulatory requirements — GST, PAYE, Fringe Benefit etc

Daily Operating Procedure

• Business appearance standards, procedures for achieving standards
• Opening and closing procedures
• Acceptance of credit procedures
• Procedures for cashing out register

Administration

• Employee scheduling — details shifts, how allocated
• Computer operations
• Accounting and payment systems

Emergency procedures

• Cover fire, and medical
• Accident procedures

Kitchen, staff room and toilets

• Daily procedure for keeping clean and tidy
• Cleaning/hygiene standards and procedures
• Procedure for replacing consumables

Sales/Customer Service

• Telephone manner/scripts
• Procedures for meeting, greeting & fare welling customers
• Procedures for interaction with /serving customers
• Procedures for up-selling, cross-selling
• Handling complaints
• Sales targets and recording procedures

Under each procedure you need to cover:
Who, What, Why, When, Where, How for all of the systems and procedures that you include in the manual. Then schedule some time each year to keep the manual up to date, make improvements to procedures and documents and cull out of date stuff. Keep back-up hard copies and soft copies.

A well documented company manual will become a company resource of significant importance and will add substantial value to your business. It will also make it easier to induct new staff and identify weaknesses in the business.

Off to School Camp


This week I am off to my youngest son’s year 6 camp at Camp Adair. I know it will be busy and tiring, there will be objectionable kids that will try my patience, I will miss my red wine at the end of the day, but I am strangely looking forward to it.

I have helped out at my 2 older kid’s year 6 camps, so feel morally obliged to help out for number 3. Business is busy and it would be very easy to say, “I can’t go as my clients need my help and I have a couple of good prospects in the pipeline that I would like to progress”. All of that is true, but I have to remember why I went into business for myself and what is most important in life.

Business should serve your life, not the other way round. It is too easy to become a slave to your business and so a specific goal should be to systemise the business sufficiently that you are able to take a week off and focus totally on the needs of your children (and 90 others) for once. It is a grounding experience to be with them in such an environment and watching them grow emotionally as they challenge themselves in unfamiliar surroundings. Pick an event yourself that will take you away from the business, set a goal to be there for someone else’s benefit and put a plan in place to arrange your business to accommodate it.

Put Documented Systems in Place

It may take a while to develop the systems required to free up some time, but not only will you benefit emotionally from the break, the business will be more valuable due to the systemization process. I can help you with that process.

Don’t make the mistake of thinking, “I MUST be there because the place won’t run without me”. If that is TOTALLY true you don’t really have a business and questions need to be asked if what you are doing is good for your long term future. I have to shuffle around client meetings and ask another advisor to cover some urgent stuff that can’t wait. Explaining to my clients that I am doing this for my child’s benefit and is a moral commitment that I have made typically receives understanding (and even grudging admiration). I think you will find the same.

My next post will be after the camp….if I survive! :)

Export as a growth strategy.

With a domestic market of only four million people, the opportunity for many firms to grow is significantly restricted. This is particularly true for a business that is focusing on a small niche in the market. Once the New Zealand market has been developed to a mature stage, the business needs to either look at adding new products or services into it’s range or find new markets in order to grow.

So why take the risk of venturing offshore and where does one start?

It’s a Big World Out There.
The why is easy. It is all about opportunity and potential for growth. The world is a market measured in billions and there is no reason why more New Zealand companies don’t get out there and join those companies that have gone before them and offer their wares to the world. Once thought of as pretty much a supplier of relatively low value food commodities, New Zealand is now competitive in a surprisingly wide range of goods and services. According to an NZIER report on NZ exports in June of this year, there are over 5,000 products recognised in the international trade classification system. New Zealand exports around 2,000 of these.

Of these 2,000 odd products, NZ had a comparative advantage in 611 product groups and these products came from nearly all tradable sectors of the economy. Although food and agricultural products tended to have a higher comparative advantage, other sectors also scored pretty well. So to say that you don’t produce something off the farm and so no one would be interested in me doesn’t stack up these days.

Getting Started.
As with any sound business plan, the first step is doing your homework. Moving into export should be done on a committed basis and with the longer term vision in mind. The cultures in many markets overseas are much older and different to ours. They work on a longer time frame and expect you to also show a longer term view. A few factors to think about before you plan that first sales trip include:-

Get company-wide commitment. Every employee should be a vital member of the international team, from the owner to customer service through engineering, purchasing, production, and shipping. You are all in it for the long haul.

Define your business plan for accessing global markets. An international business plan is important for defining your company’s present status and internal goals and commitment, but it is also required if you plan to measure results.

Determine how much you can afford to invest in your international expansion efforts. Will it be based on ten percent of your domestic business profits or on a pay-as-you-can-afford basis?

Plan at least a two-year lead time for world market penetration. It takes time and patience to build a consistent export division.

For help with these elements and all the other things you need to think about when considering a move into exports, contact the author: Andy Burrows at iconnorthshore@gmail.com