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Outsourcing. Does it sound such a scary word to you? For many new and small businesses, the answer is a resounding yes! Outsourcing involves paying someone to do something related to your business. If cashflow is short or you struggle with the thought of others doing something for your business, outsourcing be thought of as a big no-no.

We thought it was time to shed some light on this ‘bad word’ known as outsourcing, explaining the benefits of doing it and identifying exactly what tasks can be outsourced.

What is Outsourcing?

Outsourcing is the hiring of a freelancer or business to do a particular job for you. A good example is engaging the services of a bookkeeper to keep your accounts straight. You pay them to do things specific to this task. You remain in full control of what they are doing and your business.

By far the biggest hurdle for new businesses is getting over the mindset of having to pay someone else to do something they believe they could do. We completely get that. When you have a new business, it’s ‘your baby’ in a way and you want to do everything to help it grow. Becoming a jack of all trades and a master of none is very common. It’s the master of none that is the concerning aspect. By doing absolutely everything, you are not focusing specifically on your strengths; the things that are going to help grow your business. Instead, you spend more time than necessary having to get your head around figuring out (and possibly doing a poor job) how to do something. It’s this task you could have outsourced, and while it would have cost you money, it frees up your time to use your strengths and grow your business. A far better alternative, in our opinion.

Why is Outsourcing a Good Idea?

The best way to answer this is by listing the benefits that outsourcing can provide you with. They include:

  • Saving you time, which saves you money – forget spending 12 hours doing your accounts, when a bookkeeper could do the same amount in one hour!
  • Frees you up to do the things you enjoy doing – you don’t need to do everything, and that especially means the things you dislike doing. You also don’t need to work every hour of every day, which means you can still have a life outside of your business.
  • Cheaper and less hassle than having an employee – there is no overtime, holiday pay or KiwiSaver to worry about. You simply have a contract with the person or company you are outsourcing to, which states what you want them to do, when they’ll do it and how much you will need to pay.
  • Giving you access to new skill-sets – not everyone is good at writing, sewing or using social media. If you are not confident or have little knowledge about a task needing to be done for your business, outsource it to someone who does know what they are doing.
  • You choose how long you need their services for – whether it is for one day a week, the next two months or only at certain times of the year, you decide.

There are also three things to look out for which should be triggering you into thinking it is time to outsource:

  • There is a more cost-effective way to get tasks done
  • Some tasks take too long for you to complete
  • You are unable to do what really needs to be done to grow your business because you are stuck doing the mundane daily business tasks

Once you’ve decided to outsource, next comes deciding what that task will be, and who will do it for you.

Choosing What Business Tasks to Outsource

Start this process by firstly identifying the challenges you are facing in your business. These may include chasing unpaid invoices, posting on social media, not having any free time anymore or struggling to understand how to take your business to the next step. Note down the tasks you enjoy doing and where your strengths are, as well as the ones you hate doing and struggle with completing.

This list should have identified a number of business tasks. Group them into levels of importance and consider which ones you would be happy to give to someone else to do. You’ll also need to consider the cost of outsourcing each task and if outsourced, what return will it give you back in terms of you being able to do something else?

Common tasks new and small businesses outsource include:

There are some tasks though, that shouldn’t be outsourced. These are the absolutely critical things your business does that nobody outside of it would understand how to do. This can include things such as professional development, company culture, manufacture of a highly specific product, or particular service.

Once you have identified exactly what you want to outsource, it’s time to find the right person or company to do the work.

Choosing Who to Outsource to

While it’s not as time-consuming as hiring an employee, it does take time to find the right person to outsource your work to. If you haven’t already got someone in mind, a good place to start your search would be to ask for recommendations. Word of mouth is one of the easiest ways to find and learn about potentials. You can get honest feedback from others and no sense of pressure to hire them.

Otherwise to find freelancers or companies are to look for recommendations on websites, social media or networking groups. Visit their website and learn more about the services they offer and how they work. Many are happy to have a free chat with you to discuss your needs and explain how they could help meet them. If you are wanting to meet in person, then choosing someone local becomes important. But if you are happy to chat via Skype, phone or email, then their location shouldn’t be a factor in your decision.

It’s also important that you contact your shortlist of potentials to ‘interview’ them, in a way. Asking for references or clients to talk with helps you learn more about how they work. You’ll also see what their communication is like, be it by email or phone. It’s a good idea to use their services in a small scale first, before signing any long-term contracts. In regard to the contract itself, read the fine print regarding any cancellation or other penalties you may be up for.

At MBP Online, it’s true that you can outsource all of your accounting and bookkeeping tasks to us. But we can also help you with keeping on top of your taxes and making future plans to grow your business. Based in Taupo (where our espresso machine is always on for clients), we work with both local and NZ wide businesses. Get in touch and let’s have a chat about your needs and how we can help.

Thinking about hiring your first employee? Reaching a point in your business where you need an extra pair of hands is a milestone to celebrate. It is also a time when you recognise that in order to grow your business, adding new team members follows along naturally.

Before you start asking for resumes, there are some steps to follow first:

  • Assessing if you are truly ready to hire your first employee
  • Identifying the role, they will play by creating a job description
  • Calculating how much it will cost you to hire an employee
  • Deciding how you will manage the hiring process
  • Learning about your employee’s legal rights and entitlements
  • Choosing a payroll system
  • Onboarding your new employee

We’ll cover each of those here today.

Are Your Ready to Hire Your First Employee?

How can you tell when the time is right to hire your very first employee? Here are some signs to look out for:

  • You are so busy that you can’t do all of the work yourself
  • Your business is growing and your cashflow is above what you planned for
  • You are ready to grow your business but can’t do it by yourself
  • Your customer service levels are dropping as you can’t provide excellent service by yourself anymore
  • You need new skills to work alongside yours to grow your business
  • There are new services or products you want to offer, but you don’t have the skills to do them yet
  • Your free time has completely disappeared, and you’d like some of it back

It’s going to be a combination of these signs that demonstrates to you the need to considering hiring your first employee. Talk things over first with a trusted advisor if you are unsure if it’s the right step for you and your business.

Writing a Job Description for Your First Employee

When taking on a new employee, you need to have a very clear understanding of what you want them to be doing. This means nailing down the specific roles they will be performing for your business. Creating a job description will help you identify their day to day responsibilities and tasks, the skills, experience and qualifications they will need to perform the role, the hours they will work and what their salary will be. You will also need to be clear on:

  • The type of employee they will be – casual, contractor, permanent, part-time, full time
  • The amount of responsibility you are happy to delegate to them
  • What resources you will need to have before they start, such as equipment, insurance, and wages
  • The specific skills they need to be able to demonstrate they have
  • What training you are prepared to offer, or if they need to be fully trained already
  • The number of hours it would take to do specific tasks each week

All of this information can be put together into a comprehensive job description which can be given to prospective employees and help you create the advertisements for hire too.

How Much Will It Cost You to Hire Your First Employee?

Here we’re not only talking their wage or salary, but also holiday pay, KiwiSaver contributions, business insurance, training, new equipment, uniforms and recruitment costs. The Ministry of Business, Innovation and Employment’s website has a handy Employee Cost Calculator which is free to use and can help you identify how much it will cost.

How Will You Go About Hiring Your First Employee?

You’ll need to decide if you will manage the entire recruitment process yourself, or if you will hire a professional to help you do this. Besides your budget, there are a few things to consider if you should use a recruiter to help you or not, depending on how confident you are with:

  • Writing job advertisements
  • Analysing CVs
  • Performing interviews
  • Making an offer to an applicant
  • Creating employment contracts
  • Checking references

There are pros and cons for both, but for your first employee, we’d recommend getting some support when you do it.

Understanding an Employee’s Rights & Responsibilities

Employment legislation is present for a purpose: to avoid employees being used and ripped off. Neither of you can opt-out of these entitlements, and they are valid regardless of any signed contract. To understand fully the minimum rights of employees, we recommend taking a read of the Employment New Zealand website’s employment rights guide. Generally speaking, an employee’s rights include:

  • Pay at or above the minimum wage
  • Paid time off and public holiday entitlements
  • Sick and bereavement leave
  • Maternity leave
  • Overtime pay
  • Leave for jury service
  • A safe working environment free from discrimination

Once again, a recruitment or human resource professional will be able to assist you further with these, helping identify specific ones in your unique situation too.

Choosing a Business Payroll System

It may not be too much of a biggie with just one employee, but what if your business continues to grow to five or twenty employees? A payroll is a list of your employees and contains information about the money you pay them, including tax deductions. You can run your payroll by:

  • Good old traditional pen and paper spreadsheets
  • Outsource to a payroll professional such as ourselves
  • Use a DIY software which can work out things for you, but you need to make payments
  • Full-service software which does everything including making payments on your behalf

Doing the payroll means you’ll have to do things such as calculate gross pay, pre-tax deductions including KiwiSaver, PAYE, taxes on benefits, student loan repayments, pay the wages, file and pay taxes and deductions, plus keep all of these things on record for at least seven years!
One of the things we’re here to do is to help you decide which payroll system suits you best, and even assist you with the running of it if required too.

Onboarding Your New Employee

The contract is signed, sealed and delivered. It’s time for your new employee to start work. This means you’ve already organised the equipment they will be needing to use, gotten all of the digital systems ready such as IT logins and let your insurer know they need to adapt your coverage. You’ll also have to start an employee file, where you keep information about them and their role, plus all of the specific onboarding requirements:

  • Health and safety policies
  • Dress codes
  • Hours of work
  • Detailed training required
  • Access to the workplace and other tools
  • Organise holidays and leave
  • Introducing to customers
  • How reviews will be done

Many businesses spend time creating a written onboarding process to make things easier for the first and subsequent employees.

Here at MBP, we like to think of ourselves as our client’s right-hand helper (not man, cause we’re all equals here). From accounting to bookkeeping services, business development and planning, we do it all. Get in touch with us today or check out our business packages to learn more about how we can help you grow your business.

A strong business mindset doesn’t come easily to everyone. Fortunately, there are things that business owners can do to ensure their business succeeds. We’ve put together a list of 16 key things you can do to create a successful business mindset.

16 Tasks to Help You Create a Successful Business Mindset

To build a successful business, you must think strategically and from the head, not the heart. That’s having a business mindset: something many of us may initially struggle with. We’ve put together a list of 16 tasks which can help you:

  1. Believe in yourself and your business, you need to be confident as confidence breeds success.
  2. Set your products or services apart from your competitors. Specifically, ask yourself what separates the value of your goods from a rival business?
  3. Analyse the market to look for trends where the industry is headed.
  4. Be a passionate, charismatic leader, that can inspire employees to work to their fullest.
  5. Be open to finding a mentor. You can’t know or learn everything; a mentor can bring a wealth of experience and insights to you and your business.
  6. Use networking to build your business and meet people online, at trade events, through customer and supplier relationships.
  7. Ensure quality control over your products, services and marketing messages.
  8. Focus your energy on what you and your business does well.
  9. Have an ultimate vision for where you want to be in the long-term. Set small goals to reach that vision.
  10. Don’t be afraid to let other people help you, whether it’s an employee or a mentor. New ideas or perspectives can reinvigorate your decision-making processes or break mental blocks.
  11. Celebrate success in your business decision-making both overall and individual achievements.
  12. Practice discipline in your business; great success takes a lot of time and effort.
  13. Be proactive, don’t wait for opportunities to come to you, reach out to new challenges with confidence for example; Opening an online store, opening a new branch, diversifying your product range etc.
  14. Think outside the box, don’t try and do what everyone else is doing. Challenge the status quo.
  15. Keep learning there are always new technologies and processes that come out keep up with the latest trends by having staff training, and workshops.
  16. Don’t be afraid to make mistakes, use them as an opportunity to learn.

Creating a successful business takes time, money and a lot of effort especially on the owner or the Manager. If you adopt some or all the above points to help grow your business mindset, you can look forward to a bright future. Our business development services can help make starting and running a business much easier.  Book a time with us to chat about your ideas and let’s get cracking!

How will you get the money out of your business when it’s time for you to move on? A business exit strategy will give you the knowledge in advance of how you will wrap up your involvement in your business. It can also help increase the amount of money you will be able to recoup too.

No one has a crystal ball and we can’t see what the future will hold. There are many reasons why you may need to leave your business, including health, family, a need for money, a change in interests and retirement.

Developing an exit strategy includes the creation of a detailed plan which identifies the steps to be done for you to leave your business. To identify the most suitable exit strategies for your business, an assessment of both you and your business should be done, along with a review of the implications the strategies would have.  This then provides you with a documented plan which states what the options are, the pros and cons of each and the amount of cash you could expect with each option.

Regardless of the length of time your business has been operating, the creation of a business exit strategy is a must. In this article, we will explain the benefits of having a strategy, what your options are and how to develop an appropriate strategy for your business.

What Are the Benefits of Having a Business Exit Strategy?

The benefits of having a strategy in place to exit your business include:

  • You can mould your business into the best shape for your chosen exit option. This will give you the best possible value from it.
  • It allows you to groom successors from within the business to make the transition flow smoothly for everyone.
  • You can leave the business at a time which suits you and when the market conditions are advantageous.
  • A protection plan for your financial assets will be in place.
  • The value of your business remains protected and buyers see this as a positive feature.
  • Informing strategic decision making by keeping the end goal in site.

You’ve worked hard to build your business, so why not do everything you can to protect your investment? Next, we’ll look at some exit strategy options you can choose from.

What Are My Business Exit Strategy Options?

To develop the most appropriate exit strategy for your business, you need to lay all of your options on the table first. To maximise the value of your business, your chosen strategy must be flexible and appropriate to meet your needs and requirements. Your options include:

  • Liquidation – basically this is the closing of your business and selling all of its assets. For many small businesses, this is often the only option. The advantages are that it can be done quickly and easily, with the biggest disadvantage being that you’ll receive only a low return on investment.
  • Merger or Acquisition – your business is purchased by a larger company who then merges it into their operations. Advantages are that it is highly beneficial for the purchasing company, and that you are likely to receive a fair sale price.
  • Initial Public Offering – this is when you sell your shares in the business to the general public. It requires a lot of pre-work to get this up and running.
  • Passing to Family Members – your business is kept in the family, and you are able to groom your family successor. You also may still retain a say in what happens with the business too. However, it’s easy for families to fight over the ownership and management of the business, and they may not even want it.
  • Selling to Employees – you may have a manager or a group of employees who would like to purchase your business.
  • Selling to an outside buyer – you could advertise and sell your business to someone who is not currently connected to it.

This then leads to the question; what should you do next?

Creating Your Business Exit Strategy

We recommend having a chat with us before you develop your exit strategy. Not only can we assist with a valuation of your business, but we can also help you identify the key data you need to collect to make the best possible decision.

This can include collecting information about:

  • Appearance of premises
  • Condition of assets including machinery and software
  • Accounting systems are current and appropriate
  • Customer files are up to date and easily accessible
  • Policies and procedures are documented
  • Employees are fully trained and efficient

You will also need to consider:

  • Who your target buyer is and where you will find them
  • How long you are prepared to allow the leaving process to be when it’s time for you to get out
  • You have at least two years of financial records available to share with the purchaser. You should also be prepared to answer questions regarding your expenses, revenue and historical cashflow.
  • That your business can run without you being there. This may mean training up employees and stepping back from your role, as well as having regularly reviewed written processes for employees to follow. Aim to step back at least several months before the planned exit
  • The value of your business as it stands, and what improvements you could make which would increase its value
  • How you will promote your business to buyers, also known as your sales pitch
  • What your family’s wishes are, if you are considering creating a succession plan for them to take over the business
  • Goals for your business in the future, including what your role will be and when you want to leave the business. Do you want to remain a stakeholder and continue to have a say in how the business will run? Or is a great financial exit more appropriate for you?
  • When is the optimal time to leave your business? This can include data regarding the historic revenue of your business, periods of growth and busy times of the year.
  • That your website is updated, easily modifiable and you can arrange training for the new owner.
  • All debts must be paid in full and any existing personal finances removed from the business.
  • All outstanding invoices are paid in full.
  • Non-core assets are sold off and the business is streamlined.

As business advisors and accountants, we can help with the creation and documentation of your exit strategy. We’re only too happy to help; get in touch with us today.

If you’ve been told you need to complete an organisational review, or are now wondering if you need one, read on. An organisational review is a great tool to help you:

  • Improve the way your business is structured.
  • Solve any performance issues.
  • Change the culture of your business.
  • Fix any relationship or communicational problems.
  • Increase productivity.
  • Catch up with fast moving external changes.

Completing an organisational review involves collecting data to process, organise, share and interpret in relation to your business. The ultimate goal: improve the way your business works. You will be looking at three key areas:

  • Strategic – developing insights on how things are working now, so you can make informed decisions, and goals in the future.
  • Foundational – collate the information needed to achieve your new strategic direction.
  • Improvement – identifying what you will do to improve the way your business works.

Each business should complete an organisational review at least once per year. We’ll explain how to do this next.

How to Complete an Organisational Review

Analyse Your Business

Once you’re ready to start your review, take time to gather some tools which can make the entire process easier. Some of the tools you may use include:

  • SWOT analysis – evaluate your business’ strengths, weaknesses, opportunities and threats.
  • PEST analysis – identify the external factors impacting upon your business; political, economic, socio-cultural and technological.
  • Competitor analysis – what are your competitors doing well? How are they placed against you?
  • Balanced scorecard – compare your past figures with your current ones, and your future predictions. Are they balanced? You are looking at things such as marketing, finances, impact, growth and operations.

Examine Your Business

Once you’ve gathered your review tools, then you’ll need to examine:

  • How your business is structured – Who does what? How are your tasks allocated?
  • Procedures and processes used by your business? How do people know what to do? How do different teams work together?
  • Your finances – do you have a budget? What are your main expenses and types of income? How can you improve things financially for your business?

From here you will have the information you need to make recommendations of what your business should do moving forward. You don’t have to do any of this alone though; we can help. Part of our job as business advisors is to help our clients understand where they are, where they’re going and how to get there. When you’re ready to take the next step and improve your business’ organisational processes, give us a call. The coffee’s on us.