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Staff profile: Vicky Rush

Position at BDO Waikato?

Vicky Rush (Nee Zhang)

I’m an accountant in the BAS Team.

How long have you been in this role?  

Only about four months.

Tell us a bit about your background?

I come from a rural background in Northern China and ended up teaching English at an elite high school, via teachers college and a degree in English literature.  I never dreamed that the native English-speaking teachers I worked with in my liaison role at the school would create connections with the outside world that would eventually lead me to Australia, marriage, and two lovely children. Moving to New Zealand brought new challenges and opportunities for us, and here I began my accounting degree in 2010. Upon graduation I accepted a Financial-Administration role in Western Community Centre, while also working closely with Accounting 589 Limited, looking after small business accounts. I was also proactively volunteering in other non-profit organisations such as Te Whare O Te Ata. My education background and my two lovely children led to a position on the school trustee board for about one year.

Why did you want to get into this type of role?

Being a chartered accountant has been my dream since choosing accounting as my career path. I enjoy talking with clients to help them succeed in their business. I enjoy learning about the challenges and opportunities facing different industries and businesses.  I also enjoy seeing my books balanced. Completing a set of accounts gives me a sense of fulfillment.

What do you love about working for BDO Waikato?

I think it is the supportive environment I love most. You can just turn around and discuss with your colleague’s anything you’d like input about.  There are always different ways of doing things and we are encouraged to learn about and share perspectives to make our work more efficient.

What’s your career highlight to date?

The highlight so far has been completing all the academic sections of the new CA Programme in May, and starting at BDO!

What’s the most challenging aspect of your role?

Well, with my background the biggest challenge is Kiwi slang, but sweet as though, I’ll get it all sussed.

What’s the best part of your job?

The best part of my job is when I have the chance to talk with clients and help them with their business. I enjoy meeting up with clients and going over the books I have done for them. It’s so encouraging when clients who are pleased with my work give positive feedback.

What’s the best piece of advice you’ve been given and by whom?

I think the best piece of advice is from my father who once told me that if you want others to help you, you have to help yourself first. He taught me to do the things I could do myself first and then seek help if I really couldn’t get there through my own efforts.

What advice can you give to people who aspire to be where you are?

Hold on to your dreams …

Tell us about your family? 

I have two lovely daughters aged 10 and 8. They are everything to me. We have a hen at the moment and we may get some chickens if we are lucky in a couple of weeks.

What’s your favourite music or bands to listen to right now?

Classical, and a broad range of other genres and artists.

Favourite food?

Dumplings!

Favourite Hamilton eatery?

Two Birds and Jukebox Diner.

Favourite place in Hamilton to visit?

Hamilton gardens. I enjoy walking around and seeing the styles and tastes of different countries.

Favourite book?

Unlimited Power.

Favourite movie and/or TV show?

I like watching Shortland Street because it is short. Just kidding. I enjoy the drama and follow quite closely for half an hour during the weekdays.

Who would you most like to meet and why?

I’d like to meet Richie I believe because he is very cool and has won respect on and off the field.

What do you do for fun?

Hiking the Haks, swimming, biking, and badminton.

What’s one thing people would be surprised to know about you?

I can skip rope backward and do the hoolahoop … and no, not at the same time.

 

 

 

We hope you have been enjoying our staff profiles. If you are interested in working for BDO please visit our careers page: https://www.bdo.nz/en-nz/careers 

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Finance Minister to take questions from Waikato business leaders at Summit

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Minister of Finance Steven Joyce speak with Waikato’s business leaders at this month’s inaugural Business Summit in Hamilton.

Joyce will speak about what the National-led Government is doing for businesses before then taking questions from the audience. It is expected that Joyce will set aside about 20 minutes to take business-related questions.

Business leaders will attend the Summit to listen to a who’s who of business give their insights into how New Zealand and global economies will fare over the next 10-30 years.

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Minister of Finance Steven Joyce

The Business Summit 2017, on February 22, is a joint collaboration between ANZ, BDO Waikato, Chartered Accountants NZ, Tainui Group Holdings, and Xero. The event will be held at the Hamilton Gardens and makes use of the Hamilton Gardens Arts Festival infrastructure; the summit will be located in the Pacific Crystal Palace on the Governer’s Lawn.

It will see key industry figures speak about infrastructure in the upper North Island region and its impact on business; collaborative working relationships between New Zealand’s largest cities; business disruption and the IT revolution; and identification and minimisation of business risks.

BDO Waikato managing director Bernard Lamusse said it was important for business people to hear outstanding speakers and to spend time networking with each other to rejuvenate their businesses.

“We have an outstanding line-up of speakers who will offer valuable insight into our local and global economies and will contribute to discussions about key issues facing our region in terms of business growth,” said Lamusse.

Hamilton mayor Andrew King will be joined by Auckland deputy mayor Bill Cashmore, Tauranga deputy mayor Kelvin Clout, Tainui Group Holdings chief executive Chris Joblin and Hamilton City Council’s general manager city growth Kelvyn Eglinton for a panel discussion about the collective strengths of the upper North Island.

“The panel will examine issues that the business sector in the ‘Golden Triangle’ are facing, such as pressure on the housing market, infrastructure growth, attraction of skilled labour, and environmental concerns,” said Lamusse.

ANZ’s chief economist Cameron Bagrie will give his insights on Brexit, the election of Trump, and a host of other issues.

Anna Curzon, managing director of Xero New Zealand, will discuss the impact of the changing IT environment and other disruptors of business.

Break-out sessions will delve further into the upper North Island’s collective strengths, business risks and cyber security, market strategy, and sustainable business.

Business Summit 2017 is on Wednesday, February 22 at the Pacific Crystal Palace, Governer’s Lawn, Hamilton Gardens. Registrations open at 11.15am, followed by a networking lunch at 11.30am. Presentations begin at 12.30pm.

Tickets are $150 and includes lunch, afternoon tea, canapés and refreshments with live music from 5pm.

Kaikoura charity plight highlights role of financial reserves

Written by Bernard Lamusse

BDO Waikato's Bernard Lamusse

    BDO Waikato’s Bernard Lamusse

The Canterbury West Coast Air Rescue Trust is usually putting away extra money at this time of year to get through the holiday season – the busiest time of year for rescues.

But, that critical savings period has been upended by the Kaikoura quake and the cost of extra flights to help locals amounting to hundreds of thousands of dollars, depleting the charity’s financial reserves and leaving them in a precarious position.

The Trust has a long-term goal of building financial reserves, a journey that is challenging given its mission numbers and costs are increasing year on year and fundraising targets in line with that. This comes along with the added pressure of building reserves in a very competitive funding environment.

An incident like the 7.8 earthquake adds a whole new dimension of financial pressure and the Trust has appealed to its community for support, with the goal to raise $300,000 by December 22, to ensure it can deliver this life saving service.

The Trust’s experience is pertinent to all charities, an example of why building sufficient financial reserves matters and how difficult it can be to do so.

A recent BDO survey of Not-for-Profit (NFP) sector knowledge and views on financial reserves, showed that many struggle with building adequate reserves; a critical thing to get right given the different forces at play in the current market: low interest rates, highly competitive funding, financial reporting regulations – not to mention an increased risk of earthquakes.

Most of the 471 respondents felt their reserves were insufficient with only 3% saying they had too much in reserve and 4% saying they didn’t know. Furthermore, around half of the respondents were not aware of an organisational financial reserves policy being in place – so there’s room for improvement.

Once in place, this contingency of ‘financial reserves’ can help an organisation weather unexpected financial crises such as natural disasters, loss of income, to meet capital costs as required, cope with a tax audit, make investment decisions… the reasons are numerous.

And critically, funders and donors want to see that a charity has enough money set aside to be financially robust whilst not sitting on unspent cash without good reason.

This all highlights the critical need for robust financial reserves policy and planning – not only for the reasons outlined but because a financial reserves policy provides wider benefits as a framework for internal decision-making and externally, as a point of reference to support funding applications and donor appeals.

Off the back of our research, BDO has worked with sector focus groups delving into the specific issues and developed some comprehensive advice across key areas from cash reserves versus net asset reserves, setting minimum and target reserve levels and developing and implementing a financial reserves policy through to monitoring of and reporting on key criteria.

Perhaps the most compelling piece of advice for charities beyond the technicalities of financial reserves planning and management, is convincing their funders that they have got it right.

That means learning how to tell a convincing, transparent story about the work their organisation does to their funders, donors, and other stakeholders – linking financial data with the non-financial measures to tell that story.

Certainly, reserves are a key part of the financial data, but when viewed in isolation they do not convey the wider story, the organisational narrative that is so central to everything it stands for.

Ultimately, whilst financial reserves may be something that sits in the background for many NFP organisations, the reality is that it serves not only as a contingency, but a properly formed policy can play a core role in the sustainable operations of an organisation.

 

Bernard Lamusse is Not-for-Profit Sector Leader for BDO New Zealand chartered accountants and business advisors and Managing Partner; Audit, Assurance and Advisory BDO Waikato

Smoothing the Emotional Rollercoaster

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Written by: Lyall Evans, Advisory Partner, Agribusiness Sector Leader

Farmers are still the backbone of New Zealand’s economy but they also still face real problems when it comes to passing the baton to the next generation.

Succession is one of the most confronting transitions for family-owned business – especially in New Zealand’s agribusiness sector – and can be an emotional rollercoaster.

One of the main tasks of my job is helping farmers figure out how they’re going to exit the business of farming while leaving the farm in the hands of their children.

Around half of New Zealand’s family farming operations consider this type of succession as a means of exit, versus sale to an external party.

It sounds simple. It isn’t. Farmers can face tricky personal/family manoeuvres before the day comes to leave the farm. Because family farms can provide the livelihoods of more than one generation, succession requires careful planning and discussions because of the desire to keep a generation on the farm.

The Succession Jigsaw

Many people perceive succession as a scenario were a couple in their 60s say to an eldest son “you run this farm now” But there’s much, much more to it. Succession is like a large jigsaw puzzle, involving a huge number of interlinking pieces – retirement planning, successor identification and training, financial planning, legal structures and strategic planning to name a few.

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Families need to carefully consider each piece and how each of those will then fit with all the other pieces of the puzzle to build a picture of succession. As a basis, succession simply means the transfer of something, which could involve transferring money to enable someone to gain a tertiary education; or transferring attributes and values from parents to kids; or transferring wealth via a share in farming assets, or ultimately the whole farm itself.

The reality is there are many, many different definitions and stages to any succession, all families are unique and the solution needs to be tailored for each situation. Templated standard models should be regarded with caution. The uniqueness of families is because they all have different attitudes to risk. They  all have their own lenses that they look through regarding attitudes about life, equality issues and economic matters.

Different Approaches to Succession

We’re seeing a trend towards farming operations getting larger – a reflection of both the growing corporatisation of agribusiness in New Zealand and the desire of families to gain economies of scale with their operations. This has been occurring for some time and is a world-wide trend. Those with large farming businesses have much more options when it comes to succession. Often it is the more able farmers who have got themselves into this position, and who have generated wealth and added wealth through skill and retention of income. Modesty in terms of lifestyle is often a common trait amongst those who have accumulated large scale operations. Obviously it is helpful to have started with scale as well. I don’t think it can be over emphasised that growing skills to generate income and being modest with spending income, can over a lifetime make huge differences to succession. Therefore education and attribute building by families of their children has a huge role to play in succession. You can never start too young in building younger ones’ attitudes to hard work, money and lifelong learning. Studies of top performing farmers shows a substantial gap from the  average performer  and over a lifetime this gap by accumulation can make huge differences to the pie that is available for distribution.

The other trend we are seeing is more ‘inter-generational partnerships’. We have always had these partnerships but I believe we will see more of this in the next few years. This occurs  where the agribusiness is supporting more than one generation of the family in some form. Mum and dad simply do not have enough wealth to be financially independent of the farm. The harder issues are often around  who has the control of the purse strings and how do the families deal with some stresses that are inevitable when their economic futures are tied together. It involves a lot of empathy and respect to make it work well, something that farming families are often very used to.

For example, mum and dad might have moved off the farm and be living in a house in town, with a son or daughter and their family living on and working the farm – but both will have assets in the business and be drawing income from it.

When it comes to considering different approaches to succession, I like the concept of the three ‘circles’ of a) business ownership, b) family and c) operational involvement. This is something used by leading family-run SME researcher and consultant Dr Deb Shepherd, senior lecturer in management and international business at the University of Auckland.

Business owners don’t have to think about being in all three of these circles. You could have a scenario where there is an owner, but they are not operationally involved. Or there are three children and the ownership sits across all three, but one is on the farm and is remunerated for that. Or they might own it as a family and put a manager on to the farm. There’s no one right answer, no perspective that’s better or worse.

Managing the Process

Managing the process of succession planning is inherently challenging and not always helped by the reticent Kiwi culture. Often the incumbent generation will fear they’re pressuring their children to come back to the farm. Whilst the children feel awkward because they don’t want to assume they have a right to something, or are pushing ahead of other members of the family. Parents are more conscious of all their children when making decisions and it would be unusual where no provision is made somewhere in the plans for those children not involved with the farming business directly. Again different families handle these matters differently and there is/should be no one templated way forward for dealing with the matter.

Upfront and transparent communication is essential – and the earlier the better. You don’t want to see succession planning spurred into action when a parent has a health scare – that is not an ideal time to be dealing with the complexities involved in the transition.

Starting conversations early means ideas have time to percolate. It starts with the vision from mum and dad. What do they want? How do they see the business continuing? Then the next step is to have those conversations, and be open with everyone about those.

When I get families all in a room together, what is most evident is that parents and children want to support each other, and the majority work together to achieve the vision. It’s quite emotional, but for everyone it’s generally a huge relief.

 

 

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice.

Don’t waste a good financial crisis

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Momentum is strong in the New Zealand economy. We have a booming tourism sector and recovering dairy sector, together making up around 12% of GDP, and a buoyant residential and commercial property sector.

You only need to look at the number of cranes on the Auckland and Christchurch skylines and apartment advertisements in Auckland to realise that. Residential prices have continued their growth as demand outstrips supply due to record net migration and the buoyant economy.

As they say, New Zealand is on a roll.

So how do you reconcile that with some recent high-profile collapses such as Pumpkin Patch, Wynyard, shirtmaker Nicholas Jermyn, Dick Smith, Valleygirl and Temt; with rumours circulating on several others … not to mention several planned apartment developments that have recently been abandoned due to cost escalation and failure to raise finance?

Well, even in strong economic conditions, businesses fail. This can be due a range of factors from poor management and governance, timing, failure to successfully address legacy issues and technological disruption, through to strong competition or growing too quickly.

But for every collapse there are many more businesses that have successfully navigated challenges and turned themselves around. These tend to fly under the radar due to the importance of confidentiality when faced with challenges. Here we focus on some of the learnings from some successful restructurings and turnarounds we’ve been involved in.

Acting Early

First, the appropriate action will depend on the circumstances. Typically, the earlier you identify the warning signs, the more options you will have available.  That is why it is so important to have strong timely information available that is reviewed by the appropriate stakeholders.  Whether it be real-time sales and margin data for sales reps or monthly board and management reporting packs showing monthly and year-to-date performance along with financial and non-financial KPIs.  The key is that it needs to be available as quickly as possible and needs to be accurate, because it will be used for staff, management and directors to make decisions.  Recent developments in systems can facilitate this including add-on apps that are available often at relatively low cost.

Spotting the warning signs

So, what are the early warning signs?  That again depends on the business and industry.  But there are a few common themes such as:

  • A mismatch between profit and cash
  • Spending more time at or near your overdraft limit
  • Declining sales through loss of market share or industry-wide disruption
  • An absence of timely information for decision-making
  • Regular surprises in your financials
  • Erratic margins
  • Slow paying customers
  • Slow moving stock
  • Non-financial factors, such as increased complaints, factory inefficiencies, increased health and safety incidents, or staff retention issues

Acting

When the signs are identified, what do you do?  Again, it depends at what stage of decline you are at.  If you are high up the decline curve, you want to be acting on short through to long-term strategic issues.  The further down the curve you are, the more short-term actions are required to manage the crisis. Some examples of actions that can be considered are set out below.  The first two categories, whilst very important to manage a crisis or improve efficiencies often do not address the underlying cause of the decline. They are important because they help steady the ship and buy more time to address the causes, but are not a complete solution.  The third category (medium to long-term) actions should achieve that, though of course, these are sometimes the harder issues to address.

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Where change is required, ensure that you understand the impact of making the change before jumping in boots and all.   Usually it will require a gradual change so you don’t bet the ranch on a sudden change.  For example, it may have working capital implications or take time for staff or customers to accept the new direction.  Also, you might be wrong – sometimes no amount of analysis or gut feel will guarantee you are making the right changes.

By way of an example, let’s take the wine sector – although the principles apply equally to other industries. The wine sector has grown strongly in recent years with earnings doubling over the past decade, annual growth averaging over 8% and total exports now around $2 billion per annum.  Some participants are doing very well yet some are struggling under too much debt due to either recently acquiring land at record prices or producing more grapes or wine than they can sell.

Take a business that decides it wants to move from a lower margin grape growing business to a high margin branded packaged business.  Those businesses have very different working capital needs and skill requirements.  The transition is likely to take a number of years.  Jumping in boots and all and stopping grape sales to convert all into wine without ensuring a channel to market would be devastating.  Cash flow for grape sales following harvest is exchanged for winemaking and holding costs until it can be sold.  Then the pressure is on to sell it before the next vintage is harvested.  The better move would be to make the transition gradually to prove the business case and manage working capital impacts along the way.  If things don’t pan out as planned, options are available.

So, when you identify the early warning signs, or perhaps you don’t pick them up early and you face a crisis, don’t waste it.  Take the short-term actions required to manage the crisis and buy time, but do not stop there.  Remember, you have not addressed the cause.  Ask the hard questions, produce the analysis, involve key staff and other stakeholders.  The good thing about a crisis is that it provides the opportunity to effect change quickly – just make sure you don’t miss the opportunity a crisis provides.

 

 

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice.

Understanding export markets

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What to get right onshore before heading offshore

There’d be few New Zealand business owners who haven’t considered offshore markets at some stage whether for expansion, supply, new sources of revenue and customers or the possibility of a new venture.

It’s an equally energising and daunting prospect given the challenges of increased costs, complex regulatory and compliance issues and legal and political risks that come with the benefits.

Those more technical aspects aside, given New Zealand’s distance from major global markets and small scale in terms of population and business size, there is a lot to know before stepping offshore.

However, many New Zealand businesses successfully open their doors to new markets and customers every year. And in my experience of helping Kiwi businesses to discover their market and build the capability to enter and succeed, there are some fundamental elements that make a big difference.

1.) Understand Your Market
While it’s important to be strong in your homeland first, just because a product or service works in New Zealand, doesn’t mean it’ll succeed in another country. Indeed, failure to understand a potential market and its customers is one of the biggest pitfalls for Kiwi businesses.

So first and foremost, know the market your potential customer operates in and ensure that everything you do is wrapped in that understanding. That will require a strong investment in tailoring your offering to suit the market and a campaign to promote it appropriately – again something many businesses fail to do properly.

With food and beverage products for example; you may need to modify some ingredients and change labelling and messaging to ensure you’re on target. And, despite the common Kiwi assumption that English language is universal, many countries do not deal in English. Even the fact that some people read from right to left as opposed to left to right, will impact how your product is presented and marketed.

Understanding these specifics has a huge impact on how your product is received. And, while it seems obvious – if you’re in a non-English language country ensure you have an appropriately translated website – something that many Kiwi business fail to do.

2.) Business Model
Given New Zealand’s two big challenges of being a very long way from our global markets and very small, our businesses need to be thorough in choosing their market entry model.

You can take the passive online approach of e-commerce, which can be a fantastic way to level the disadvantages of scale and distance. Or choose more active forms ranging from an in-market agent to find customers and negotiate sales or selling directly to an in-market distributor through to strategic partnerships and licensing/franchising. They all come with their pros and cons and the tax implications will vary with each model.

The reality is that a lot of money can be lost through the value chain depending on the model and ideally you want an entry strategy that puts you as close to the customer as possible. However, it’s not always feasible as articulated in the food and beverage market where there are multiple players taking margin along the way.

Likewise, for the manufacturing sector, exporters may see their investment in innovation sucked out in the value chain so it’s important to look at a business model that can capture that.

NZTE takes businesses international by growing their capability to capture innovation, looking at how they are branding what they do, understanding pricing mechanisms in their potential market and aligning that with design, distribution, marketing and after sales service. These all add real value to the product, taking more control and shifting the business up the value chain.

And, as the saying goes, you don’t know what you don’t know. To help determine the best model, it’s useful to do a value chain mapping exercise to see how much margin is being taken out at different stages by different players.

It’s also important to understand your competitors, considering how they might respond to you entering the market, what you need to invest in to get market penetration, build awareness and get the right pricing model.

Finally, business model success is influenced by how it’s managed and that means being engaged and building strong relationships and very often a local presence.

3.) Network
Think about your existing support networks. This can start with your board of directors, professional advisers, NGOs, the likes of NZTE, MFAT and KEA and industry associations. As a starting point they can guide businesses to the appropriate channels to market and customers. Your task is to sell a solution that meets the market needs – so independent advisors and directors should be technically sound and customer focused.

Secondly, consider your existing connections and partnerships and ‘follow’ those, whether they are suppliers or customers, distributors, importers or wholesalers. Use the resources of NZTE, MFAT and KEA, find out about appropriate trade shows and events.

And don’t just assume it’s about getting there and showing off your product. Use these networks to find out who is attending, what they’re likely to be looking for and how your offering is relevant – before committing.

Be friendly and open to, and with, people you meet on the plane and in airport lounges; and finally, use online networks like LinkedIn and contribute to the stories being exchanged.

In short, be open to all the opportunities that might be right in front of you. Identify the market needs and sell a solution.

4.) People and culture
A weakness for New Zealand is that we’re still a very monocultural society and whilst this is starting to shift, in general our business practices and knowledge of global markets is average. That manifests in a limited ability to understand other cultures, to front up prepared, to speak another language – even our own indigenous language.

There’s no such thing as a Master’s Degree in Cultural Mindset, but there are plentiful opportunities to help businesses develop it by having good advisers and networks and doing your research before going anywhere.

First impressions count and can make or break your deal. So know protocol. For instance, signing a contract in China is a very, very formal event that requires adherence and respect. Whereas in the US, it’s all about legal documents and unless you have a team of lawyers, you wouldn’t want to sign anything.

Personally, I never go to the Middle East without a suitcase full of ties and suits – and the one time when the airline lost my suitcase – the first thing my host did was take me out and buy a new set of ties and suits.

New Zealand business culture is very pragmatic and casual – a bit too casual with not enough time spent on analysing the audience needs, planning and preparing. At home, we’ve gotten very good at turning up and winging it. That doesn’t work overseas.

5.) Focus
A common mistake is to be take too broad an approach to potential markets – which ultimately waters down your chances of success.

There needs to be a focus on defining specific markets and needs that fit your offering and aligning with that. For most New Zealand companies, this means starting small – focusing on just one market, or even one segment of that market. Ultimately, it’s always easier to expand a niche than to scale down.

In choosing the right market, you may need to find out who is most likely to want to purchase your product or service, not just who could purchase – talk to people first-hand and gauge their reactions to what you have to offer; research online; understand perceptions of New Zealand in your market.

Focus on lower risk, high potential return markets. If you have a competitive advantage in New Zealand, look for markets where this can be sustained. The trick is to find the balance between opportunity and your chance of success.

6.) Dollars
An exporter can have a fantastic product, but let themselves down in not doing the homework around finance.

A prerequisite is having enough capital and equity. Exporting is a costly business – almost always costlier than expected – and you need to be sure you can make enough profit to cover the costs before making the leap.

As well as carrying out an export cash flow forecast, determining financial feasibility also loops back to the need for robust market research required to understand pricing strategies and set-up costs ranging from professional advice, freight and logistics and marketing through to compliance.

So it’s best to assume that more is better so that you don’t have to engage/disengage and then start over.

It’s also critical to have retained reserves for if and when things go wrong and/or when hard times hit. Reserves are an important indicator of your ability to grow abreast of your customers, ride out down cycles, fund emergency situations and change or adjust your business model if needed.

Target market and entry model will help determine how much you set aside. If you’re looking to enter the United States for instance, be aware that everything takes four times longer, is four times harder and four times more expensive than in New Zealand.

There are many non-equity ways to de-risk international growth and to invest in projects, ranging from bootstrapping it by family financing, accessing public support and grants, including those which NZTE and their Regional Business Partners offer as part of tailored support packages to businesses, and even absorbing development costs into product manufactured cost and pricing decisions.

7.) Ability to story tell
While your products or services are unlikely to be genuinely unique, your story and value proposition are – that’s what will resonate with your customers. Thus, story is one of the most powerful ways to differentiate yourself from your competitors.

New Zealand businesses are generally poor at telling a compelling and succinct story to their audiences – and that makes it very difficult to differentiate and get people to pay attention.

The task is to put yourself in the shoes of the potential customer and engage them in a compelling picture of why they’d want to buy your product or engage your service.

This is about more than facts, it is about sharing the heart behind your business and value proposition – the experience they can expect from you beyond the day-to-day transactions, and the relationship you are promising to have with them over time.

Through storytelling you can use passion as a means of building connection and engagement.

Craig Armstrong is Director (Customers) at New Zealand Trade & Enterprise, leading a team that helps New Zealand businesses grow into international markets. Craig brings 25 years of experience with a range of businesses in leadership, marketing, finance, sales, operations, change management and business development roles – including with Lion Nathan, Cadbury Schweppes, Hunterskil Howard, CPLG, National Foods and HJ Heinz.

Before joining NZTE in 2007, Craig was founding director of an Australian-based business providing strategy, marketing and commercialisation resources to companies and to private equity clients.

Export case study

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JUCY’s green and purple brand is a household name in campervan rentals across Australasia – and now this almost iconic Kiwi business is well on track to doing the same in the US.

Founded in 2001 by brothers Tim and Dan Alpe, JUCY captured the New Zealand and Australian market with its compact and comfy campervan experience enjoying strong year-on-year growth alongside the booming tourist sector.

And since they started working with BDO’s audit and tax team in 2011 and NZTE in 2013, JUCY has broadened its portfolio to include JUCY Cruise and JUCY Snooze, scoped out the UK market and entered the US.

JUCY first hit the road on the West Coast of the US in 2012, off the back of its research indicating a gap in the market for its distinctive style of a more compact, close to nature camper van experience.

It started out with a partnership model hiring its 80 vehicles out through US campervan and motorhome rental company Apollo – a low-cost, low-risk model that provided good back-office support and a channel to a new and unknown market.

Things have changed a lot since then – including shifting on from Apollo to establish three of its own branches and quadrupling its fleet to more than 350 vehicles.

But there have been a lot of learnings ‘en route’ with some help from NZTE.

As their customer manager Richard Dunsheath says, one of the biggest realisations for JUCY was just how different the US market is to what we know in New Zealand and Australia.

“For one thing it’s seasonal. No one hires campervans during the winter months, even in the warmer areas, which has a massive impact on utilisation” says Richard.

“For another, whilst we’re generally happy with hiring older vehicles, even up to 200,000 km on the clock, in the US that’s just not acceptable. Americans want a vehicle that’s done no more than 10,000 km and they also want larger vehicles and JUCY’s offering was all about smaller, compact vehicles.”

NZTE researched the market thoroughly and paired up with a local development manager to help JUCY align its offering and its goals with the customer and market.

Along with leaving Apollo, a model that wasn’t doing the JUCY brand justice, and establishing its own branches, JUCY has also been progressively renewing its US fleet and changed the look to a slightly larger vehicle with a bigger interior design.

JUCY also tweaked its marketing and promotion, converting the JUCY Global website to JUCY US, packed with local images and context and supported by US-centred social media. They also engaged journalists and got high-profile people to blog, attended trade shows and joined in collaborative marketing events.

Richard says that to address the down-season challenge, a pop-up branch option was discussed, enabling a wide reach during the on-season in addition to JUCY’s three permanent branches.

“We’ve had a lot of discussions around locations and the pop-up branches are something JUCY will implement for summer in 2018.”

As Tim Alpe says:

“We had done a bit of research, but we’re probably not the best company in the world in terms of research; we tend to hit the ground running and get our market research that way.”

“The goal is really to get ourselves operational and, if it takes off, to have the ability to really ramp up our manufacturing.”

Business Tips from BDO’s expert team – what to get right onshore before heading offshore

Structure: The key driver in choice of structure should be the commercial aspirations and needs of the shareholders. As with all tax advice, different businesses require different solutions. Our global network of specialists in this area can help you develop a tailored solution for your business that works from both a New Zealand and a foreign tax perspective, to meet the aspirations and needs of the shareholders.

Plan for Disruption: Have faith in the BAU processes as your time, energy and focus will be massively disrupted with international expansion. This is true, even if you have dedicated resource on the ground in other jurisdictions. How will these processes be impacted once you are operating abroad and how will they remain excellent?

Internal culture: Who is going to be impacted by the change and what is their attitude to change? Are they invested in the journey, or is it an owner-led exercise? Owners need their staff to be engaged and expect the unexpected. Also, what is the risk with changing your culture and becoming a multi-national operator? Are you comfortable with the ROI?

Due Diligence: Do your due diligence on overseas regulations and operations, ensuring you have a thorough knowledge of what you are dealing with and the legal/cultural requirements.

Funding: By all means budget for expansion, but how much flexibility do you have in your budget? How much of the unexpected can you afford and how will it be financed (from existing cashflows, or externally funded and what are the limits on this – think ‘what if?’)

Overseas earnings and ROI: How lucrative are the deals abroad (not only in terms of turnover, but expected profits). Does this return stack up, after tax, for the investment required? Return on investment is critical and should be substantial given the complexity and risk involved.

Exit Plans: What does success look like abroad? What are the exit options? Assuming all goes well, how long can it be sustained with the current ownership model and how will you exit if you need to? Assuming it doesn’t, when should you pull the pin and live to fight another day?

Continuity of Advice: Naturally your professional advice requirements will expand. Who will you use, such as other professionals, NZTE resources etc? How can you ensure these advisers maintain and understand your journey to date? Their advice should be ‘technically correct’ and aligned to your own and your firm’s capabilities, culture and understanding and factoring in governance requirements and your needs as the firm, the risk and strategic requirements expand.

 

 

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice.

Staff profile: Annalise Chibnall

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                             Annalise Chibnall

Position at BDO Waikato? An accountant and I started at BDO in late April 2016.

How long have you been in this role?
At BDO I have started a new career path into the BAS world, prior to that I worked in audit for three years.

Can you tell me about your background?
I have lived in Hamilton since I was five so I did all of my schooling here and attended Waikato University. My first experience as an accountant was working in audit – which is tough but you develop some invaluable skills and knowledge.

Why did you want to get into this type of role?
Ever since I was little I was always good with numbers so I think accounting was a bit of a natural progression.

What do you love about working for BDO Waikato?
The people!!! Everyone has been so welcoming I have already made some great friends.

What’s your career highlight to date?
Definitely passing my CA exam, the quickest six hour exam you’ll ever sit.

What’s the most challenging aspect of your role?
I’m constantly learning new things everyday but I find it interesting.

What’s the best piece of advice you’ve been given and by whom?
It’s about the journey not just the destination. I remember reading this somewhere and it sometimes will remind me to focus on enjoying the everyday things not just the end goal.

What advice can you give for people who aspire to be where you are?
It’s a lot of study and learning but stick in there. The knowledge you gain will set you up for life and you can go into a lot of different roles in the future.

Tell me a bit about your family … Partner? Children? Pets?
I live with my partner Ryan and we have a dog called Henry who is the cutest staffy around – he is our little fur baby.

What’s playing in your car right now?
Not in my car, but I love listening to Amy Winehouse on Spotify, or a bit of Fleetwood Mac. My music taste varies so much that I listen to a bit of everything.

Favourite food?
Snickers Pods!!!

Favourite Hamilton eatery?
Gothenburg for sure, followed closely by Ember.

What do you do for fun?
I am a bit of a movie buff so love watching movies. I love going out to eat with friends and of course playing with my dog!

Pet peeves?
I’m a bit OCD so everything goes a certain way in its certain place.

What’s one thing people would be surprised to know about you?
I was vegetarian for thirteen years but fell off the wagon and am now a total carnivore.