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You’ve got a fabulous idea for a new business but are unsure about which business model you should work with. We take a look at B2B vs B2C to help you decide if selling to customers is right for you, or you’d prefer to sell directly to other businesses instead.

What Are the Differences in Selling B2B vs B2C?

You are in business to sell your products or services and make a profit. You’ve got two choices when doing so: sell to the consumers who are the general public or sell to other businesses who will either resell your products or use them to make their products.

Depending on the products you sell, this decision may already have been taken away from you. For instance, if you sell pulp for papermaking, you are most likely going to sell to another business who can turn that pulp into paper. If you sell baby clothes though, you’re probably going to sell directly to your customers.

Let’s take a look at the main differences between both of these business models.

B2B or Business to Business model:

  • selling your product or service directly to another business
  • often requires large product quantities delivered on a set date
  • requires a long-term relationship between you and your buyers
  • involves more people in the buying decision and process
  • possibly selling your product at a lower price than a consumer would pay for it
  • less of a lead pool to grow to purchase your product or service
  • requires in-depth knowledge about and sharing of your product or service
  • a more complex and involved selling process
  • payments are often received a month or later after product/service delivery

B2C or Business to Consumer model:

  • selling product or service directly to individual customers
  • wide lead pool to target and sell to
  • top price for your product/service paid by the customer
  • small quantities sold at a time
  • fewer people involved in the buying process
  • short relationship with customers
  • customers interested in benefit to themselves
  • instant payment upon purchase
  • easier to sell to individual customers than large corporations

As to which path your business should take, it comes down to whether it would work for what you sell and if you are happy to sell that way. Remember though, that both business models will still require the standard business considerations: a website, good bookkeeping and financial management, a business plan, cashflow management and outsourcing. The good news is, we can help you with all of those! Get in touch with our team today to arrange a chat about your business and how we can help.

We’ve heard this before: the COVID-19 pandemic is an unprecedented global health and financial crisis that has caught many off guard. While the threats to human life are very real, the damage to the health of businesses is really just starting to show. In the coming weeks and months, many businesses will be in a fight for financial survival.

The seriousness of the disease and the lack of a vaccine (at the time of writing this) have prompted governments around the world to impose strict measures to contain the virus. These restrictions in people’s movements and the temporary lockdown of non-essential services have definitely taken a toll on businesses and families across the country.

While there has been a lot of talk on how to avoid contracting the virus and how businesses can operate safely to adapt to the current conditions, this article will focus on helping you manage the financial survival aspects of your business during COVID-19. Read on for our tips on cushioning the impact on your business.

Update Your Financial Records.

The first step in planning your financial survival in such a difficult environment is getting a crystal clear and up to date understanding of the financial position of your business. This means updating your financial records and keeping them in order as frequently as possible. Knowing things such as your cash position and assets that can be sold quickly will go a long way in helping you make informed business decisions. Good records build a solid foundation for a successful business. They’re also really important when applying for loans or government grants, subsidies and assistance.

Examine the Financial Health of Your Business.

Following on from the first item, it is important to get a good grasp of your business’ current financial health through a careful analysis of your books and statements. By looking at key financial figures, you will get an idea of how your business is doing. You can see fundamental factors such as the liquidity and solvency of your business which will help you decide on the best steps forward as you deal with the crisis and the aftermath. Chat to us for help with these financial pieces.

Improve your Cashflow.

A lot of businesses across the country are facing cash flow problems at the moment. If you are one of them, you’re certainly not alone. However, the key here is not letting the problem worsen or become unmanageable.

Preparing a cashflow forecast should give you some forewarning before issues even arise and will allow you to address them early on. By quantifying your forward bookings, forward orders, and work in progress, you will get to identify future cash flow and plan accordingly.

You can also take the following measures to boost your cash flow:

  • Identifying the demand for your products or services, so you’ll know where to focus on and where you can reduce stock orders
  • Cutting back on unnecessary expenses
  • Urging your debtors to pay you, negotiating on a payment scheme that will work for both of you
  • Seeking payment extensions or debt re-structuring
  • Invoicing as soon as you deliver the product or service
  • Seeking external investors or lenders
  • Taking advantage of financial support from your government

Increase Online Sales Where Possible.

With the government implementing stricter restrictions to prevent the further spread of the virus, you should find ways to move your products and services online – if you can – and continue to serve existing and new clients. The situation that we are in is forcing business owners to re-imagine their business and re-evaluate their business models. You’ve got to adapt and be resilient. It’s those businesses that will survive.

Survive 2020 by Managing Your Financials

It’s safe to say not many of us factored a global pandemic into our 2020 business plans. Although there is no foolproof strategy to get through what’s proving to be a turbulent 2020, the tips for financial survival shared here should be able to give you some guidance on minimising the risks to your small business.

Want some more help? Our team of advisors love to help businesses. We’ll help you develop a plan to weather the headwinds of the coming months, while saving you time and money along the way. Contact us today and we’ll work through it together.

As many business owners are experiencing, the COVID-19 pandemic has created serious financial difficulties for entrepreneurs. Small businesses especially are faced with cutting their budgets so they can continue to operate—even at a smaller scale—and not have to close for good. They also have to figure out how they can continue marketing themselves so once the pandemic is over, their customers and clients come back to them.

During a financial crisis, a company’s marketing budget is often one of the first areas to face cuts, but halting marketing entirely is a dangerous move.

Instead, try these tips for marketing on a tight budget.

Create video content from home

Video is increasingly becoming a popular marketing tool and it doesn’t have to be expensive. All you need is a smart phone or computer with a camera and some time to film yourself. Create a video series that can be posted on your website or social media feed. Encourage staff to create videos as well, although don’t force them to if they aren’t comfortable with it.

Depending on your business, you can post helpful tips for clients or show some behind the scenes of how your company operates during COVID-19. Hairdressers can show clients how to cut their hair at home (or how not to cut it). Personal trainers can show videos that break down different exercises. Dog groomers can show how to clip pets’ nails or wash the ears.

Host an Online Course

With people staying home and trying to stay entertained, many are looking for ways to keep their minds active. Hosting an online class is a great way to keep your business at the front of their mind, market yourself, and even continue earning money. Develop a course or class that solves your customers’ problems during COVID-19 and advertise it on your website and on social media. It’s up to you if you charge people to attend the course or if you offer it for free.

Think of the obstacles your clients face while they can’t access you and create a course to help them address that issue. Many people right now are looking for ways to keep their meals interesting with limited opportunities to shop. Restaurants or chefs could offer a class (or classes) in creating fun meals with pantry staples or mixing fancy cocktails, for example.

Keep your Social Media Going

Your social media marketing is often free or inexpensive and it keeps people aware of your business. Make sure you continue marketing with your social media posting, even it it’s just to post links to COVID-related resources or informative articles that your audience will appreciate.

Play around with your social media plan to see if there are ways to reach a wider audience without spending a lot of money. Facebook often has credits that make its sponsored posts free or almost free. Those posts reach a wider audience than your regular posts and can bring people to your website.

Divert Cash if you Can

You may have budgeted this year to spend marketing money at trade shows or networking events that will not happen. Instead, put that money in your digital marketing budget. Rather than having your marketing money spread out, focus on one or two areas that get you higher return on investment. These include areas such as search engine optimization and social media.

Final thoughts

It’s tempting to not continue marketing to save money right now, but you run the risk of not having customers when the pandemic is over. Instead, maximize your budget by diverting money into one or two focused areas. Finding ways to engage your customers through videos, online classes and social media will also ensure you’re ready to go when the social distancing is over.

Please get in touch with us if you have any questions. Alternatively, reach out to a marketing expert like The Marketing Baker.

Originally Published 7th May 2020
Last Updated 30th August 2020

The government has announced what COVID-19 Alert Level 2 will look like for New Zealand.  The decision to shift to Level 2 is yet to be made.  Cabinet meets on Monday to decide if, and when, the shift to Level 2 will occur.  However, all indications are that Level 2 will begin from next Wednesday, but the Prime Minister has signaled that Level 2 may be phased in over a period of time to reduce the associated risks.

The framework for Level 2 significantly removes many of the strictest restrictions of COVID-19 Alert Levels 3 & 4 which will be a much-welcomed relief for our collective sanity and a major boost for the economy.  The changes resemble a first step towards something like a return to ‘normal’. However, it isunlikely we will return to a true ‘normal’ until COVID-19 is a distant memory and a vaccine is available. The road ahead is long and we are truly only just starting the journey.

Like the shift to level 3, it is fair to expect an initial rush of people wanting to get out and spend. Be prepared to manage an influx of orders or customers, you don;t want your restaurant, cafe or store to be the reason we get kicked back into Level 3 or be shamed in the national media for any failings.

Basic Principles for Alert Level 2

Level 2 was described by the Prime Minister as a safe reopening of the economy.  The fundamental principles include:

  • People should stay at home if they are sick (as you always should!); and
  • Anyone with any cold or flu symptoms should be tested; and
  • Enhanced hygiene measures need to be in place (regular cleaning of high touch surfaces, etc); and
  • Contacts need to be traceable (i.e. a guest register will be required for somewhere that strangers can be in contact with each other); and
  • Social distancing (2m) remains for contact with strangers, but can be somewhat relaxed for non-stranger interactions; and
  • Bubbles will be a thing of the past; and
  • No gatherings of more than 100 people (inside and outside); and
  • Contactless payment will no longer be required; and
  • Borders remain closed, but domestic travel can resume.

The Government is working on a nationwide contact tracing technology that will be based on QR codes, but it does not sound like that will be ready in time for the shift to Level 2. As with most things, you’re better to have a plan for your own business rather than waiting on the government.

Update: The NZ COVID Tracer App is now live. Displaying the app’s QR codes to enable people to sign-in is also now mandatory for all businesses. To create your unique QR code, Click Here.

Alert Level 2.5 – Adjustments Following Auckland Cluster

The government has mandated the use of protective masks on all public transport from Monday the 31st of August.

Gatherings in Auckland will be limited to 10. However, there are no travel restrictions so people from Auckland can travel freely nationwide. It is important to maintain social distancing and the other basic principles of Alert Level 2.

It is advisable to wear a face covering or mask whenever you leave your private home. Masks will be a part of our daily life until Alert Level 1. Read more on how to wear a face covering safely and make it part of your routine.

What Alert Level 2 Means for Businesses

If businesses can safely trade within the Level 2 framework, they will be able to do so.   The shift to Level 2 will provide the first opportunity to trade for about 7 weeks for many businesses, including some of the hardest hit industries.

Like the shift to level 3, it is fair to expect that there will be an initial rush of people wanting to get out and spend.  Consumer confidence is extremely low, so consumer spending will almost certainly fall to far lower than normal levels at some point after this initial rush.  Therefore, businesses will want to make sure they are prepared and can reopen safely in those first few days.

The Prime Minister today described how certain industries will be able to operate.  Here is a brief summary:

Retail – can trade with enhanced hygiene measures, especially for high touch surfaces.  Numbers of customers in the store may need to be managed for larger retailers to ensure social distancing.

Hospitality – Unsurprisingly hospitality has the toughest requirements.  A hospitality venue will be subject to the “3 S’s”:

  • Seated – patrons must be seated.
  • Separated – there must be physical distancing between the tables.
  • Single server – each table must be served at the table by a single server.

These requirements may mean that it is impractical or uneconomical for certain hospitality venues to reopen at Level 2. This specifically applies to some bars and nightclubs. However, some restaurants will also not be able to seat a viable number of patrons or will simply not have the required number of staff to enable single server service per table.

Hairdressers and beauty salons – can resume seeing customers but will need to wear personal protection equipment due to the prolonged close proximity to customers. Masks or facial shields are the key items to be worn. Regular hand washing with soap and water is more practical and effective than gloves in many instances.

Sport and recreation – Gyms, pools, parks and museums, etc. can all reopen, subject to necessary precautions.

Sports can resume on a case by case basis.  A domestic rugby and netball competition will start as soon as possible.

Education – Can resume subject to necessary precautions.  Schools will resume the first Monday after the announcement.

Take a Precautionary Approach to Health and Safety in Your Workplace

While COVID-19 is in or community, caution is the best cause of action. You don’t want your business to be ground zero of the next cluster.

Cleaning is key for all businesses. We recommend bathrooms and high touch surfaces are cleaned as frequently as possible. Tills/EFTPOS machines should be sanitised after contact payments, hands should be washed at least every 15 minutes and bathrooms should be cleaned as often as practicable given their levels of use.

If your team can work from home, encourage it. The non-taxable $20/week allowance to help cover costs of staff working from home has been extended by the IRD until March 2021. They have also extended the time frame for making non-taxable payments of $400 to staff to reimburse them for the costs of setting up a home office. You can make these payments with no reimbursement evidence (receipts, etc.) and with no payroll or FBT implications.

Encourage the wearing of masks in your business when social distancing is not possible. This is not a requirement but is a cautionary approach that should see the risk of COVID and flu spreading in your workplace drastically reduced.

With everything we have learned over the past few months, take the time this week to review your internal Infection Control and Prevention Policy. Make the required updates and discuss these with your team.

Book in a Free Chat with one of our Experts

Need to discuss your plans for moving forward? Click HERE to book a free 30 minute chat with an MBP Business Partner. We can advise on everything from tax to payroll, human resources, cashflow and more.

New Zealand will move down to Alert Level 3 from start of business on Tuesday 28th April 2020. The change in the alert level will mark a shift from ‘essential’ business operations to ‘safe’ business operations, with many strict restrictions still in place. For hospitality at level 3, this means contactless takeaways only, provided specific heightened health and safety standards can be strictly adhered to.

We have had a number of discussions with our building and construction sector clients in recent days and know this will be very welcome news. To ensure that the last month (soon to be five weeks) of lock-down have not been a very expensive waste, it is essential to follow the new industry guidelines.

Is it Even Viable for you to Open?

The first thing you need to carefully consider is can you actually afford to open at Alert Level 3. For many businesses, the restrictions at level 3 make it more expensive to open than to stay closed, do you know if your business is one of those?

Do not rush and think that just because you can fire up the kitchen again that you’ll be better off. You need to have a plan and a high-level cashflow forecast for every scenario. Some key questions to ask yourself before even considering opening:

  • Do I have the ability to do takeaway?
  • How will customers order?
  • How will customers pay?
  • How will the orders get to the kitchen?
  • What is the likely demand?
  • How  many staff will I need?
  • How do we manage the staff we don’t need?
  • Is our kitchen big enough to allow safe operation and social distancing?

These are just a few of the essential questions you’ll need to ask yourself. If you need a hand running through these, book in a free 30 minute chat with one of our business advisors.

We also have a range of free and fully funded services to help you make informed cashflow decisions. You can access our free Business Continuity Plan (BCP) Guide here and download a copy of the free BCP template from there. That will help you with many of the decisions you need to make.

Preparing your Business to Open

In the lead up to the move from Alert Level 4 to Alert Level 3, you can start getting your business, premises and staff ready for work.

Talking with your staff is really important and should be one of the first things you do. Engaging with them is essential to making sure they are happy, healthy and safe to work. They will also need to be up-skilled on the new health and safety protocols and requirements that you will have in place.

Look at your menu. What items can be done with contactless delivery or pick-up? What things will be impractical to serve?

You should have completed a stock-take before shutdown and know what your need to reorder to get back up and running. If you haven’t, head in and get the stock take sorted so you know where you’re starting from with your stock. A lean stock flow will be essential. There is no knowing if we will go back into lock-down and customer demand is unpredictable so don’t carry more than just a couple of days of stock at a time.

It is likely you’ll also need to order in some extra take out containers and other items to facilitate a changed operating environment if takeaway is new for you. If takeaway is new, its even more important to have made a well informed decision on the viability of opening.

A key task to be undertaken in the lead up to opening will be a floor to ceiling clean of you premises. After more than a month of being closed, its likely the place will need more than just a vacuum and a wipe over. Set aside a day to get in there and give it a deep clean and sanitisation. Health and Safety has never been more important. The last thing any business needs is to become a center of a new cluster and the reason the entire country gets kicked back to level 4 and locked-down.

Health & Safety Guidelines for Hospitality at Level 3

Hospitality at Level 3 is not business as normal. However, you should already have most of what you need in place from before lock-down.

We’ve received many questions about the need for gloves to be work when working. If you did not previously wear gloves when working then there is no requirement for them to be worn now at level 3. While it might seem a smart move to use gloves, they can actually become a recipe for unsafe and unhygienic practices, especially if your staff are not used to working with them. Regular hand washing with soap and water is often your best option. Avoid relying on sanitizer as this is less effective than simply washing your hands properly (it’s also more expensive).

Similarly, people have been asking us about masks. These are probably a better protective option than gloves. It must be noted that they are most effective at preventing, or at least limiting, the chances of your staff contaminating the food you’re preparing rather than protecting staff from contamination from customers. Contactless processes and social distancing between your staff and customers is essential. Masks will be easy for front of house staff to utilise as long as they discard and change them regularly, especially after breaks. It may be harder to utilise them with staff in the hot confines of kitchens. Make them available for your staff and encourage their use.

The best thing you can do is to ensure that any staff returning to work have had no chance of contracting the virus and have had no symptoms at all over the previous week or more.

Every business in hospitality at Level 3 (or level 2 when we get there) should have a Covid-19 Control Plan and policies in place. The plan will guide how the business and its employees will manage work on their premises and the controls they will use to minimise the risk of Covid-19 transmission between each other and to customers.

WorkSafe has some great guides and template safety plans on their website. You can access them here.

Read the WorkSafe Guidance

Worksafe has some really good information for all businesses, including hospitality at level 3. It is well worth taking the time to run through this before you make any plans to open.

The governments dedicated COVID-19 website also has a wealth of information about what level 3 will look like overall. Click here to have a read through of all the info on covid19.govt.nz.

Remember, just because the cafe or restaurant down he street is opening, doesn’t mean you have to. Don’t make a knee-jerk reaction to open. Make a calm and well informed decision that is in the best interests of your business, your team and your customers. As a nation, we’ve all been really supportive of the lock-down and the extraordinary measures taken to preserve our health. Your customers will still be there in two weeks and you’ll be there, healthier than ever, to serve them.

Need some help getting your head around the new protocols and whether its worthwhile opening? Book in a chat here. We’re here to help.