Business Values

What are your business’s values? Do you know? Have you articulated them to anyone?

Any business book you read these days will ask if you know what your business’s core values are. It’s a bit of a step on from mission or vision statements, although these things are still talked about.

A business’s core values are defined as the philosophies or principles that guide its internal conduct as well as its relationship with its customers and other stakeholders. They are the guiding principles that help to define how the business and its employees will behave.

I find all this airy fairy talk a bit hard to follow. Much of what people say are core values are just basic must haves to me. For example, to say we act with honesty and integrity. Of course we do; that’s to be expected. Read More »


Goals- BW Miller Dean Ltd

My husband and I have a goal – to walk the whole of the Te Araroa in our lifetime. Check it out here. It’s a 3000km walk from the top to the bottom of NZ and joins together many existing walks. We could do it as “through walkers”- start at one end and keep going till we get to the other end- but we don’t have the time or dedication. So we’re what’s called “section walkers”; we do it in sections. We fit in pieces where and when we can: a longer tramp at New Years, several day walks through the years, etc. It’s a logistical challenge. The biggest problem is always getting transport to one end to walk to the other.

We aim to do between 100-150km per year. That makes it a 20-30 year plan. Sounds ridiculous I know, and it certainly did when we started in 2012. (We realised we’d done some of the walks already so why not keep going?) However, we’ve now done 762km. That’s over 25% so it seems more realistic.

And how do I know that? I keep a record of all the pieces we’ve done. It’s drawn on a map and a spreadsheet of course. After all, I’m an accountant. Read More »

How Planning and Budgets Make Business Better

When I come back to work after the summer break, I spend the first week or two planning for the next financial year. I like to get a head start on it when I’ve been out of the nitty gritty of day-to-day stuff and when we’re not so busy with clients’ work.

It’s important to plan what you want the business to achieve, then look at what it has done in the past and work out how you’re going to bridge that gap.

The financial aspect of a plan is a budget. And because cash is king, the even more useful version of this is a cash-flow forecast.

It’s not unusual for a client to ask us to prepare one for them because the bank has asked for one. It then gets handed to the bank or put in a drawer and promptly forgotten. That’s about as useful to the business owner as an annual set of financial statements we prepare long after the year end to calculate the tax payments!

But a budget and cash-flow forecast can be very useful to help manage the business. Read More »

Why Billing is the New Black

Here’s a fun factoid for you… billing your customers for the work you’ve done gets you paid!  AND, when you get paid, you can pay your bills!  And eat!

One of the most important things about running an SME is to get your invoices out- as quickly after the job is done as possible. Simply put, people won’t pay you if you don’t bill them. Invoice fast and often.

I know, I’m hearing you say that it’s the last thing you feel like doing after spending all your time on the job; you’re just too busy and it becomes a chore for the end of the month or a wet day.  But that sort of business practice is what gets you a gigantic debtors list and believe me, chasing that up is a far worse chore! Read More »

Is your business really sustainable?

Is your business sustainable? And I don’t mean are you eco-friendly and “green”; I mean, would your business carry on if you weren’t there, working in it day after day?

So, you’re the owner of a business.  You might have started it from nothing or you could have bought it from someone else.  But often we are really self-employed, maybe with a few staff to help us out. The customers are our customers, they only want to see us and they believe we do all their work ourselves. Our staff rely on us to feed them tasks you end up doing nearly everything yourself, picking up all the bits that the staff didn’t get to. Or maybe you have to correct their work and, rather than coaching them to develop their skills, you just do it yourself because it’s quicker and easier.  You think you’re the only one that can get it right. This is the proverbial working IN the business rather than ON it. Read More »

Getting to know new clients

When we take new clients on it’s really important that we get to know them and understand them and their business. To repeat what I said in our last blog: “We like nothing better than when our clients achieve the lifestyle they want to from their business.”.

We know that not everyone desires building a large empire that they can sell off for megabucks. Many of our clients just love being their own boss and in charge of their own destiny. But all business owners also want their business to be the best that it can be. This is where we can help.

It’s also important that new clients understand what we can do to help them. We’re not here to just do Annual accounts and tax. We understand running a business and the challenges it brings. Not only have we run our own business for many years, we constantly talk to other business owners about their business challenges.

So, when we first meet potential new clients we like to have what we call a Proactive Accounting Meeting.

Read on to find out more about a PAM, and call us if you have any questions or would like to arrange a time for us to come and meet with you. Read More »

Why systems and processes save lives

Do you feel you are juggling all the parts of the business you own all at the same time?  You are trying to handle it all and be everything to everybody.  You neglect to take time out for yourself; there is little or no time for family and friends; and there is little or no time for a holiday

Think about your role in the business objectively and ask, “How can I improve my business without working harder?”  How could you do more but in less time?  Ask yourself, “Without me, what would happen to this business?”  What could you do with that business so you have time for family and friends and that trip you have always dreamed about?

Let’s take another moment to consider why you went into this business in the first place.  Probably to give you the ability to earn more income, to take time off when you would like, or because you did not want to work for someone else.  Are you actually achieving the goals that you set out to achieve when you went into this business? Have you considered your role in the business as a job?

Starting with the end in mind and working backwards will net you some good answers to work with.  Imagine what the end goal really looks like, then work backwards to identify the steps it took to get there.  This is where planning for the business comes to the forefront.

Breaking the cycle we are currently operating in through the use of systematisation is key.  Systems that would allow for someone to undertake your role if you were not there.

Read More »

Succession planning for dummies

Why is advance succession planning so important?

An ageing population combined with the dynamic of younger generations who seem less motivated to acquire a business tests long held assumptions that our businesses will be our future superannuation.

SMEs need to focus on extracting the capital value of their business and with an increasing number of those businesses expected to come onto the market in the next few years we can expect the polarisation between the good and the bad to grow.

Good businesses will continue to sell and command a high price, whereas poor performing businesses will at best come under greater price pressure and at worst be unsaleable.

The ideal timetable for an effective succession plan is three to five years from initial plan through to final succession. In a perfect world we’d recommend a minimum of two years to prepare and in a sense groom the business for sale.

Read More »

Business Advisory Services

One thing all four of us Directors agreed on when we merged was that we all love working with our clients to help them with their businesses. We like nothing better than when our clients achieve the lifestyle they want to from their business.  So we’ve been working on defining and streamlining our business advisory services to make sure our services are in the best interests of our clients’, managed consistently and using up to date business practices.  It’s all things we are very experienced at doing, just defined and managed in a better way.

Over the coming months we will feature the services in these blogs to introduce and explain them.

The best place for us to start working with you is with a Complimentary Client Review for existing clients or a Proactive Accounting Meeting for new people. This is where we find out from you what your aspirations for your business are and what’s going on in it at the moment.

Read on to find out more about a CCR, and call us if you have any questions or would like to arrange a time for us to come and meet with you.

Read More »

Important note for all Directors

Following on from my blog last year and comments in our recent newsletter the new Health and Safety requirements come into place on the 4th of April 2016. You have probably seen various articles, including the one about Peter Jackson, regarding mass resignations of Directors in light of the new Health and Safety Requirements for Directors.

It is easy to read the headlines and pass it off as scaremongering, although in this case there is some substance to this and all Directors (as well as anyone else involved in business) should be considering their responsibilities under the new laws.

What are new Directors responsibilities?

All directors now have a responsibility to take reasonable steps to keep up to date knowledge of work health and safety matters and have an understanding of the business and its risks, ensuring it has appropriate resources and processes to eliminate or minimise risks.

This has always been the case for those involved in the running of the business but now extends to all Directors including those with no day to day involvement.

Do you need to resign as a Director?

As per the Peter Jackson article, in a lot of cases, if you don’t have regular hands on involvement in the running of the company it can be difficult to ensure that you maintain an up to date understanding of the business risks involved and the processes that are in place.

As a director you can be held liable if duties are not met by the company.

What happens if responsibilities are not met?

The Bill increases the penalties and creates three offence tiers relating to breaches of the health and safety duties:

  • Reckless Conduct – fines up to $3 million (or $600,000 and/or up to five years’ imprisonment for individuals)
  • Failure to comply with a Duty (that could cause death or serious injury) – fines up to $1.5 million (or $300,000 for individuals)
  • Failure to comply with a Duty – fines up to $500,000 (or $100,000 for individuals)

will still be required to work with you and help deal with risks, and has a number of codes and guides on their website to assist employers in managing specific risks.

At this time it is essential that you either get involved in the Health and Safety processes or consider your position as a Director and whether you are in a position to ensure the company is meeting the requirements.

Give Peta or I a call if you wish to further discuss your options.

The Profit & Loss Equation


We all know that for any business to make an income it has to make Sales.

Many business owners closely monitor the sales, compare them to previous months, previous years and, if they can get hold of the information, other businesses.

But this isn’t the only thing to monitor. You have to make sure that out of those sales proceeds you can pay all of the costs of the business and have some left over for the business to make a profit.

And as the above picture shows the amount left over can end up being only a small percentage of the sale value.

Firstly you deduct Direct costs, the costs that if you didn’t sell that product or service you wouldn’t have to pay. This leaves your Gross profit. This is a much better value to monitor closely.

And you need to do so product by product, or service by service.

You may have an overall Gross Profit but it’s hiding the fact that you sell product A at a good margin, but product B at a loss. Reducing your overall gross profit. And it may even be that Product B is a higher dollar amount so you concentrate on pushing these sales, but there is very little point in selling something for less than it cost you to get to the point of sale.

The only time a business can justify this if it’s doing it intentionally as a loss leader. A marketing ploy to get customers to come in and buy other things as well.

Then, the total Gross Profit must be enough to cover all your overheads. The costs that would continue even if you didn’t sell those particular products or services e.g. your occupation costs.

Anything left after that is your profit.

You can also turn this around the other way, from the profit you want to make, or even break-even point, you can add your overheads and margins and calculate how much sales you need to make to achieve this.


How to get the best from your Xero

Last month I talked about using your management accounts to tell the story of what’s happening in your business. And how important it is that those management accounts are timely and accurate.

And it’s that accuracy that’s also vital to help us in preparing your year-end Financial Statements. The more we have to change in your accounts the more time it takes us and the bigger the cost to you.

More and more of our clients process their own accounts. And systems like Xero do make this seem super easy. They make out it’s quick, simple and what’s more – fun. But at our end, we’re finding it’s a mixed bag as to the accuracy of the accounts we are given. And banks are often saying the same thing. Read More »

Interpreting your accounts – Part 2

In my last blog I talked about the benefit of understanding your accounts and having them prepared regularly.

Now I am going to explain this in more detail.

Following are two of the most common misunderstandings of business. Reviewing your management accounts regularly can help your business by understanding these two areas.

1. Profit is not Cash

It’s not uncommon for us to be going over annual accounts with a client, telling them the profit and they say “I don’t believe we made that profit – if we did, where is it? It’s certainly not in the bank.” Read More »

Understanding the story your accounts are telling you

Your Accounts tell the story of what’s happening in your business. They are the financial results of events that occurred and decisions you made. By knowing what that story is saying you can react to events more quickly and make better decisions.

The Profit and Loss Statement or Statement of Financial Performance is a summary of trading for a period of time, usually a year. It shows the sales that you made, and deducts off them the cost of those sales and your overheads to work out if you made a surplus from those sales.

The sales in your accounts are recognised at the time the sale is made; when you invoice it – not when you’ve got the cash in the bank for them. The costs offset against those sales are also recognised when they are incurred, not when you pay for them. This is the essence of accrual accounting.

The Balance Sheet or Statement of Financial Position is like taking a financial photograph on a certain day. It lists what you own – your assets and what you owe – your liabilities. The difference is the equity in the business.

We have an e-book on our website that explains in more detail what each part of the accounts mean.

The benefit of regular accurate management accounts

But really, how useful are the end of year accounts we prepare for you? Obviously they have to be done to correctly calculate the amount of tax you owe, and comply with the Companies Act, but in terms of helping you make useful business decisions they are often just too late. They are a summary of financial events up to the last balance date. If another six months have passed you can’t exactly react quickly to address any problems.

This is why having regular accurate management accounts prepared is vital for any business.

Very often a business owner gets the books done, just because they need to be done for the GST return to be filed. But they should be so much more than that. By reviewing those accounts and watching a few Key Performance Indicators you can understand what’s going on now and make decisions about what to do about it now.

And better yet – knowing how the business is going on a regular basis helps you plan for the future.

What story are your accounts telling you about your business? Do you review your accounts to find out? Do you even have regular accurate accounts prepared? We can help you with all of this. It’s what we love doing.

Property Investment

In my last blog I talked about the pros and cons of residential rental property as an investment. If you have the desire to invest in property but don’t want the hassles of tenants there are other types of property investment.

Commercial property is similar but aimed at the business market. Generally it’s a bigger investment as they’re more expensive buildings but the basic concept is the same. One of the advantages is that you can lock tenants in for a longer lease, and it’s usual to have a time to review the rent set in the lease. The tenants want the surety of both the time frame and the cost. However, it can take longer to find a tenant, especially if there’s plenty of property in the market or a down turn in the economy.

Commercial property is valued on the rental return, more so than residential property. Hence where a rent may be agreed, but an incentive offered to get a tenant in, rather than reducing the rent.

You also have to be clear who owns what, has the landlord provided the fit out, or has the tenant. Are you just charging rent, or do you get to pass on rates and insurance costs. Read More »

Assessing Risk in your business

Being aware of what risks your business could face allows you to plan to mitigate them.

A risk assessment plan is a “what if…” exercise. You need to:

  • Identify what could happen to or in your business.
  • What would the impact be if it did?
  • How likely is it to happen?
  • Can it be reduced or eliminated?
  • Do you need to get insurance in case it happens?

We undertook a disaster recovery plan a couple of years ago. The whole team sat down and discussed what we would do if a disaster happened, what we expected of each other, how we would communicate, and whose job is it to get us up and running again and in what time frame. It was an interesting exercise and sort of funny. And when we had the quakes in Wellington a bit later we were all prepared; we were almost disappointed that we only had a filing cabinet fall over.

Most risks are not that dramatic. It’s far more likely that a business interruption actually comes as someone burning their lunch and setting off the sprinklers and destroying the computer system.

Any good insurance advisor will be able to walk you through a risk assessment plan for both material damage and business interruption.

We know a few good people so let us know if you’d like to be pointed in their direction.

The more subtle risks I mentioned in my last blog require building a strong sustainable business to mitigate.
Doing a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis helps. As does having a plan, establishing policies and procedures, keeping up to date with your market and keeping your team healthy and engaged.

If you’d like help with undertaking this planning give us a call.

What is Business Risk?

Business Risk is defined by Wikipedia as uncertainty in profits or the danger of loss and the events that could pose a risk due to some unforeseen events in future, which causes a business to fail.

Business risks fall into several categories:

Strategic Risk – your market or environment changes drastically e.g. a big competitor comes into your market or you don’t keep up to date with technology changes and your customer moves on.

Compliance Risk – failure to comply with legislation, regulation and/or standards. For example the new Health & Safety Regulations will mean more compliance; failure to follow these could lead to fines.

Operational Risk – a failure in one of your day to day operations. Either technical, like your server dying, or people or process driven, like no one checking payments and an extra zero added onto a payment.

Financial Risk – refers to the cash flowing through your business. Like reliance too much on one supplier, who goes under owing you money?

Reputational Risk – negative publicity about your product or service could cause customers to desert you.

We can all picture the big externally driven physical risks to our business. Someone burning our building down, an earthquake destroying our town. Or even internal, theft by an employee. These are relatively easy to quantify, plan and insure for.

But some risks are more subtle, particularly for small businesses.

  • What happens if the owner or a key employee gets hit by the proverbial bus and can’t turn up to work for a few months, will the business be able to continue?
  • If your plan is to sell your business to fund your retirement, what’s the risk if that doesn’t work out? How do you ensure it will?
  • Negative cash flow leading to financial collapse.
  • High staff turnover, or in reverse an aging or out of date workforce.

Planning, spreading risk and, where need be, insuring are essential for all businesses. Too often we’re too busy working and wrapped up in our business to plan and set up safe-guards. That’s risky!

Running a great business

I spent a few days last month getting together with a group of colleagues who meet twice a year to work “on” our business’s. We’ve been getting together for 5 years now so we know each other very well. As one of them said “Its a bit like getting undressed together!”

Many Chartered Accountants call themselves “Accountants and business advisors”. To be honest, many of them have never really run a business themselves, or they have run a pretty sloppy one so I’m not really sure quite how they can advise their clients on how to.

I’ve been an owner of BW for over 20 years, and have many clients running small and medium businesses so I’ve gathered a bit of knowledge over the years.

Here are a few simple tips to running your business from me:
Read More »

Budgets and Forecasts

Following on from my last blog which was on planning this one talks about budgets and forecasting.

So, you have a great strategic plan, you have goals and targets, but can you turn this into a viable business proposition? Will it make a profit? And even if it will, when will the money hit the bank?

We know that not everyone “gets” accounts! But they’re the way of recording the financial impact of what’s going on in the business; they measure the results of what actually happens.

Putting the two together, a budget is the financial version of a plan. It’s a prediction of what you think the numbers will be as a result of how you expect the business to operate. For example: if you’re going to introduce a new line of sales, what impact do you think it will have? What income will it bring in? What will it cost you to bring it to market? Will you have to employ more people to bring it to market? Will you need to pay more overheads? Read More »

Business Planning

There’s a quote that says “Failing to Plan, is planning to Fail.” (Alan Lakein, adapted from a saying from Winston Churchill).

That sounds a bit drastic, I’m sure nobody plans to fail but there’s an element of truth in it. Every business does need to continue to grow, adapt and develop, even just to stand still. Otherwise it will stagnate and lose ground in the market place.

You have to have goals to be able to plan forward. So the first step in any plan is working out what your goals are (both for the business and the business owners). We know that not everyone wants their business to grow into a huge multi-national corporation, or even to become a business that a multi-national corporation would want to buy. But what do you want from your business? It may be to have an amount of money in the bank; it may be a certain lifestyle. It may be to be able to work doing something you love, in the hours you want to spend in it, and earning enough to have a comfortable lifestyle. And the money, time and energy to do the other things in your life you enjoy.
(The kiwi goals of bach, boat and bmw). Read More »