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When you are in the process of assessing your business risk and putting together your risk management plan, make human capital risk one of your focus areas. 

Human capital risk is a term which covers whatever arises out of not managing an organisation's human capital well. This includes:

  • catastrophic workplace events such as disabling illness, injury or death

  • losing staff to rapid turnover

  • a team member committing fraud or misappropriating assets

  • negligent hiring or retention, such as where an employer fails to complete necessary background checks on a new hire and, as a result, employs someone who is dangerous or untrustworthy

  • complacency, where the organisational culture is one of 'I don't know' and 'I don't care' and the business drifts or runs aground because of this 

Human Capital RiskWhen you review the risk management strategy for your business, assessing risk is not so much about analysing how likely or unlikely it may be for an event to occur. Over the last few years we've certainly witnessed that extreme and unlikely events occur far too often for comfort. It helps to analyse what the cost to the business would be if any of these risks occurred. Could the business take the hit or do you need to have strategies in place either to avoid them altogether or cushion the blow? And what sort of strategies might be appropriate?

Where catastrophic events pose a danger to the business through the loss of key people, an insurance package might cover funds to help cover shortfalls through the transition and replacement costs, as well as funding a shareholder's share of business debt, and purchase of the deceased or disabled partner's share of the business. Backup strategies might also include developing a leadership programme, more effective delegation of responsibilities, mentoring and training.

If staff turnover is an issue, is there something else going on? Are pay points far lower than those of competitors? Is morale an issue? Are the business' recruitment strategies just not finding the right fit for the firm? You might look at what your competitors are doing but you could retool recruitment and training processes to increase employee retention. If staff are leaving because for lack of a clear career path, could the organisational structure offer solutions? You might also look at organisational culture and introduce measures to improve morale, engagement and a positive outlook toward the business and customers.

The potential damage a fraudster could do to a business is truly horrifying. It's hard to come back from the direct costs to management, as well as the damage to the brand, team morale, and vital relationships with partners, suppliers and regulatory bodies. However, it is possible to create a climate which minimises the possibility. Strategies might include screening employees at pre-employment as well as screening suppliers and third parties, thorough internal controls and audit processes, as well as a clear code of conduct and awareness training for the whole team.

Whatever your assessment of business risk, a risk management strategy that meshes with every aspect of the business is crucial. Regular review and energetic follow through will help to minimise risk and create a stronger organisational culture alert to possibility and adaptive to change. For assistance with your business risk management, please contact us for an appointment.

Common marketing mistakes

We often get asked by clients about ways to grow their businesses and expand profit. While there are no simple answers and every industry is different, below are a few potholes to avoid on the road to marketing your business:

1. Going into business without finding out what customers really want.

2. Launching the products or services without sufficient market research.

3. Competing on price rather than developing a Unique Selling Proposition.

4. Pitching prices too low so that not enough funds are left for sales promotion.

5. Expanding sales of products or services which offer very little profit.

6. Expanding sales when there isn't enough working capital.

7. Opening a business in the wrong location.

8. Using sales people who may have good technical knowledge but who have not been trained to sell.

9. Staying too long in dying or unprofitable markets.

10. Doing the same as last year - all the time.

For helping with your business growth planning contact us for further assistance.


Businesses often ask us about KPI's and benchmarking and want to know more about them. So what exactly do these terms mean and how can using them help your business?

Key Performance IndicatorsKPIs - Key Performance Indicators are pieces of measurable data that breakdown aspects of the operational side of your business in order to measure your progress. These include:

1. Data surrounding how many staff you have and how 'productive' they are in terms of selling goods or services

2. How many clients or customers you have and how much each of these spends with you

3. Data surrounding cashflow and the collection of bad debts or even debts you may have to 'write off'

4. Revenue generated by the different goods and services you offer

Benchmarking is vital when establishing the performance of your business. Benchmarking compares your important KPIs to those of businesses with similar operations. You can then ask yourself:

1. Are your operating costs as low as similar businesses?

2. Is your debtor management plan working as effectively as those of your competitors?

3. Is your staff productivity comparable?

Benchmarking can provide the not so obvious solutions to a number of small margins which in turn, when tweaked, may dramatically improve your bottom line.

Paul Martin Chartered Accountant Limited can assist you with setting KPIs and benchmarking your business. Contact Us to find out more.

With just a few days of the financial year left, it's a good time to make sure your financial affairs are in order. Below is a check list of items all businesses should take a look at:

1. Contracts. Have you invoiced retentions that are not due and payable for another year? If they are payable in the current year they need to be declared as income but if not, the income will be deferred to a subsequent year.

2. Credit notes. Credit notes issued to customers after 31 March may be applied to the previous year, potentially reducing the current year's taxable income.

3. Debtors. Have you taken reasonable steps to recover bad debts? If so, and you write them off before 31 March, you may be able to claim a deduction.

4. Discounts for prompt payment. If you maintain a discount reserve, it is deductible. In the first year a deduction for the actual discount percentage is allowed. In subsequent years, the amount is calculated as a percentage. Different rules apply if credit extended to customers exceeds 93 days.

5. Dividends and imputation credits. Consider reviewing planned dividend payments. The imputation credit account must not have a debit balance at 31 March otherwise penalties may arise.

6. Employee expenses. Amounts owing for holiday pay, bonuses, redundancy payments, long service leave etc. can be claimed, if you have committed to them at year end and they're paid within 63 days.

7. Expenses. Can you pre-pay any expenses before 31 March? You may be able to claim for them.

8. Fixed assets. Do you have any that you are no longer using or don't intend to use in future? If so, the book value may be able to be written off.

9. Loss offset elections and subvention payments. Talk to us if you think the company will make a loss.

10. Planned maintenance and repairs. If any significant maintenance or repairs are due, bring this forward to get an early tax deduction.

11. Stock. Dispose of obsolete trading stock by 31 March or write it down to net realisable value (lesser of cost or market value). If the stock is worth less than $10,000 and your turnover is less than $1.3m for the year, you won't need to include your stock movement for tax purposes.

If you have any questions or need assistance with any of these items, please feel free to contact us.

The government has made some major employment relations changes, effective from 6 March 2015 which we recommend all businesses familiarise themselves with. Changes target flexible working arrangements, rest and meal breaks, continuity of employment for vulnerable employees upon restructuring, the good faith provisions, collective bargaining, and how the Employment Relations Authority gives its determinations.

Flexible working arrangements
Up till now flexible working arrangements have only been available to caregivers who have been employed at their place of work for six months or more. From March, all employees will have the right to request flexible working arrangements from their first day on the job. There's no longer a limit on the number of requests an employee can make in a year. When employers receive requests for flexible work arrangements, they must respond within one month, rather than three as before. The response must be in writing and, if a refusal, it must explain why.

Rest and meal breaks
Previously, provisions for rest and meal breaks were quite strict. They now seek to balance the importance of rest and breaks for employees with what is practical for the business. Essentially, employees are entitled to breaks and, if it's not possible for the employer to ensure breaks for employees, the employer must offer reasonable compensation. Employees and employers can't contract out of the right to rest and meal breaks though under some circumstances an employer might be exempt from giving breaks or may restrict breaks when the restrictions are reasonable. Key to the new provisions is that employers and employees agree on whatever arrangements are put in place and that arrangements are reasonable. If you are considering varying the arrangements around rest and meal breaks for your employees, touch base with your employment advisor to discuss your approach. As with other employment matters it is important to follow fair process and document any agreements made with employees so that, if required, you can show you have acted fairly and reasonably.

Continuity of employment
The changes to continuity of employment relate specifically to employees in situations where an employer is restructuring or selling a cleaning or catering business and employees are transferring to the new employer. A 2012 review found businesses have difficulty implementing the provisions in practical terms. The changes include set timeframes for employees to elect to move to a new employer; the outgoing employer's obligation to provide the new employer with detailed information on employees and their entitlements; a way for the outgoing and incoming employers to share responsibility for employee entitlements if they can't agree on it; protection for employers from unjustified increases in employment costs; and provision for SMEs to be exempt.

Good faith provisions and confidential information
Where the employer proposes to take a decision which will or is likely to affect that employee's continued employment adversely, changes to the good faith provisions set out what confidential information an employer has to give an employee. The employer must give the employee confidential information where it relates to them but does not have to provide confidential information on anyone else if doing so would involve an unwarranted disclosure of their affairs. Nor are employers required to give confidential information that legally must stay confidential, or where there is a good reason to keep the information confidential (for example, to protect the business' commercial position). Where allegations are made against an employee, the employee should still know the identity of their accuser and the nature of allegations made against them unless there is good reason to keep this information confidential.

Collective bargaining
The new collective bargaining framework includes provision that collective bargaining does not have to be concluded, though employers will not be able to end bargaining or refuse to enter into a collective agreement just because they object in principle to collective bargaining or collective agreements. A party to collective bargaining can apply to the Employment Relations Authority for a determination as to whether bargaining has concluded.
Employers will be able to opt out of multi-employer bargaining from the start. New employees who are non-union members are no longer covered by terms and conditions of a collective agreement for the first 30 days of their employment. Employers may respond to partial strikes by imposing proportionate pay reductions and unions must provide advanced written notice of any proposed strikes and lockouts.

ERA determinations
There are also changes to when and how the Employment Relations Authority must give preliminary findings and determinations following an investigation.

If you need further information about any of these areas, contact you employment law adviser for more direction.

The last few years have seen a new wave breaking in the marketing world. You may be aware of it under different labels, but 'inbound marketing' is an umbrella term for the change.

The bedrock of marketing was always outbound strategy: the print advertisement, the billboard, the commercial on TV or in the cinema (remember going out to the movies?). Market share used to be heavily influenced by how much you could afford to spend on advertising. So the companies most likely to succeed were those who could afford billboards and full page ads. Smaller competitors had to be a lot craftier, the quality of their products or services had to be outstanding and their appeal to niche markets was often their secret weapon. 

Today's customers are much more proactive about seeking out products and services for themselves, empowered by their confidence online. If they want a plumber or a palm tree or a book on rare birds, they're more likely to begin their search on Google before they reach for the yellow pages or walk into a shop. They don't only search online. They compare prices and features. They look at product surveys and access customer reviews.

By the time they email, pick up the phone, or complete the online form on your website, they're more than likely well informed about you, your business and what you have to offer. And they're already inclined to buy your product or use your services. They're a prospect who's generated a lead for you and they've invited you to contact them. You don't have to cold call them. You 'warm call' them. Of course, it's up to you to delight them from there.

Businesses have been quick to recognise the need to connect with the new style of customers. They're making it easy for customers to find them with inbound marketing strategies. Inbound marketing outperforms outbound strategies and is cheaper.

An eConsultancy survey from 2012 found the cost of acquiring a new lead was $346 using outbound marketing strategies, yet only $135 using inbound strategies. So, while larger companies have been quick to spot the trend, many smaller businesses are finding inbound strategies well within their reach and their budget.

The message for your online strategy is: make it easy for customers to find you. Make it enticing to stay and play. Offer takeaways with sufficient value for web-surfers to be happy to exchange their contact details for your white paper or presentation or your podcast. Create opportunities to interact with potential customers so your web presence is less of a billboard and has more potential to personalise future contact.

Meetings Matter

Meetings: scourge of the working day or a top way to make things happen? Go for the biggest outcome from the smallest window. Start with basics.


Do you want to share information or status reports, make a decision, brainstorm ideas or solve a problem? Complete this sentence 'by the end of this meeting I want us to have…'. If appropriate, circulate an agenda in advance. Ask people to think about a task or problem ahead of time so they come prepared.

Who needs to be there... really?

Meetings lose momentum when there are just too many people there. Are there some things you want everyone to know about but other business involves only a small core group? Schedule so you can deal with what involves everyone first. Then, like the man said, 'let my people go'. They'll thank you. The core group can then focus on what they need to achieve. If there are a lot of people moving at once, this is your moment to schedule coffee for those staying on.


When are all the participants most likely to be available, awake and enthused? Early mornings are good though you can lose points on the 'awake-o-meter' or because of latecomers and 'what was on TV last night'. But everyone wants to be done quickly so they can get on with the day. Mid-morning means people have made some headway on their desk, they're awake and in work harness. However, you risk burning up the most productive hours of the day if you let it drag on. Work to an 'end stop' event like lunch so there's a natural time to finish. Late afternoons are low on the 'awake and enthused-o-meter' but may still work. If you call a meeting in the last half hour of the day, you risk energy being low but you increase your chances of everyone in the room being committed to achieving outcomes in the fastest, smoothest way possible.

When scheduling, a half hour is good, an hour at most.  No matter how much business there is to go through, after an hour you've lost them. Schedule a series of smaller purpose-built appointments if you have to.

Who's leading?

A facilitator is clear on the purpose of the meeting, keeps the group on task, summarises outcomes and outlines who is accountable for them. Gain the reputation of someone who starts on time, keeps to time and ends on time. People appreciate you understand they're busy. Be firm with anyone who takes the meeting off-topic. Keep it light too - it's important to stay on task but a sense of humour keeps you on task as a team. Ask someone to note down outcomes. As chair, model good listening skills by being respectful and attentive to all participants. Make sure everyone has input and is heard. At the close of the meeting summarise what's been achieved. Ask everyone if they thought the meeting was useful and field suggestions for how it could have been more effective.

Kill the toys

Nothing is more soul destroying and unproductive than trying to drag a meeting to a result while one or more people monitor their emails and texts. Be firm but fair and thank the group for staying on task.

Agenda, minutes, action!

Agenda and minutes attract flak as hallmarks of the typical boring meeting. They don't have to be. Use an agenda to establish the purpose of the meeting. When you plan it, plan how much time to allocate to each agenda item. When you chair the meeting, it will keep you on track.

As far as possible, pare back minutes to what decisions were taken, what action is required, who's responsible and by when. Follow up after the meeting by emailing a brief summary highlighting tasks and outcomes. At the next meeting, use the minutes to check that people have done what they've said they would and, if not, detail the next best course of action.

Happy New Year! While you are rested and enjoying the sunshine, it's a great time to think about how to get the most for yourself in 2015. Do you often wonder why successful people seem to have so much spare time? Enough time to exercise, share holidays with family and yet, to still be completely relaxed and stress free? Those people probably have the balancing act right and are efficient at managing time.

Here are six things that really productive people do that could help:

1. Define your priorities

Defining these can often be tricky and it isn't always about work. Part of you wants to say that work is your priority, but stop before you answer this question. What do you find fun? Think about the kind of lifestyle you want and go from there. If you want to be a CEO, you're going to have to be willing to take the level of work commitment that goes with it. If you want to have a life filled with family, then work out what your priorities are in order to make this happen.

2. Do what you are best at

You don't do everything well, but what you do well is often more enjoyable and will take you less time. It's also more than likely that if you don't enjoy something, you may not compete it or do it to the best standard. Don't take on new challenges if they are too much for you to handle. Be efficient and use your best ski8lls and expertise to shine and get the job done on time.

3. Integrate your activities

If can be a real balancing act trying to manage work, fitness, a social life and family, so look at ways to incorporate these. Find someone at work who wants a workout buddy so you can exercise together in lunch hours. It also helps to try and develop you work life and career around your interests. You will soon find yourself amongst peers with similar interests which can in turn lead to a healthy and balances social life. Instead of feeling pulled between work and play while trying to keep everyone happy, aim for a healthy medium and let everyone come to you.

4. Stop wasting time

Social media can be an excellent business tool....but it can also be a very good time waster. Unless you are using a social media site to do something specific, put it away. Ignore gaming apps which send reminders and updates - these will only lead to distraction. You need to actually budget time for necessary activities with family and friends and don't do anything that doesn't energise and uplift you. Also use business tools that can help you increase productivity like Xero cloud accounting, Trello, Call Scheduler and more. 

5. Learn more

In spite of what you may think, learning can give you back time. By discovering new tools or ways to do things, you can become more time efficient and effective in your way of doing them. If it starts to drag on though, leave it. Nothing should take up your time, only enhance it.

6. Don't beat yourself up

Remember that you are only human, so don't get too down on yourself if you can't attend to everything on the list. Also remember to celebrate your achievements as you do them. Reward yourself for the items you do tick off the list because completions can act as a form of motivation for other tasks.

It's not easy to do all these things at once, but by gradually incorporating each too into day to day work and play, you might find that over time, stress levels will be lower and life more enjoyable.

Make that holiday happen

If you are a business owner, you'll know that the more stressed out you are, the more you need a holiday and the less easy it is to make the time! With the holiday season fast approaching here are a few tips to help you plan a holiday and make the most of it:

1. Put systems in place - If you write down your procedures and practices and ensure your team are following them, you can lie on the beach without worrying. The earlier you put systems in place within your business, the earlier you will reap the benefits.

2. Plan - Use your most productive time of day to plan your holiday. Don't try and do it once you get home, after the kids are in bed. Put aside 30 minutes each working day to really plan your holiday and book airfares and accommodation. You'll have less risk of booking incorrect dates and time and your holiday will be more cohesive.

3. Rethink how you use your time - If you spend your day rushing from A to B, book a holiday that involves lying in one place. If you spend your work week on a wheelie chair in front of a monitor, go somewhere with plenty of places to walk and explore. Make sure your holiday is a real break from reality - not just the same behaviours moved to a different location.

4. Shut off - Leave your mobile and laptop behind and don't check your emails. If you are away from the office, you are out of contact. If it's an emergency, your team can call the hotel, but do not give any way to contact you directly.

5. Take a mini-break - If you really can't get away for a week or two, take a long weekend, unplug and relax. Explore your nearest large city and visit the theatre or get your blood pumping with a live sports game. If you are in the city, find your closest rural retreat, have a massage then get your gumboots on and step out into that invigorating fresh air.

Your business plan - getting started

In our last post we talked about the power of the business plan and committing it to paper. This week we'll share a few quick pointers to help you get started with your planning:

1. Start thinking - you need to try and set time aside for this frequently. Thinking is your job in the business!

2. Get the team together - you don't have all the ideas but you can bring all the ideas to the table.

3. Brainstorm ideas - anything goes, then work through the list and pinpoint the most important ones to focus on.

4. Follow a business planning guide to make sure you cover all the relevant points - you can ask us about this or locate a comprehensive, practical book on the subject.

5. Set goals - you need to keep striving ahead and you need something by which to monitor business performance. If you don't reach your goals, find out why and get the business back on course.

6. Start writing - by committing your plans and goals to paper, you have set the course ahead. It's harder to deviate from a written plan than if the thoughts are a jumble in your head.

7. Make an action plan - give people tasks to have completed by an agreed time.

8. Review monthly, or regularly enough to monitor any deviations from the proposed course. It's fine if you choose to change tack later on but keep charting the course ahead and identify goals to work towards.

Please contact us if you would like help with any aspect of your business planning.

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