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An eco-friendly business offers plenty of advantages: lower costs, increased profitability, marketing opportunities and the biggest one of all, a better environment for everyone.

Long gone are the days when businesses who actively chose recycled photocopy paper were ‘different.’ Today’s businesses are striving to become greener, and they are proud to show it. We take a look at some of the ways you can do to also become an eco-friendly business.

What is an Eco-Friendly Business?

An environmentally sustainable or eco-friendly business is one which focuses on using resources more efficiently and reduces waste. Often a business is seen as being green if it sells products made from recycled materials. But there’s more too it that simply the products they sell. Every business can improve their level of eco-friendliness regardless of what they sell or where they are located.

Like with everything, going green is something best done from a place where you know where everything stands. This requires you to identify what your business’ current environmental practices are, such as:

  • waste – what is recycled, reused, composted or sent to the landfill?
  • consumables – how many do you use, can you reduce their usage, is there a better viable option?
  • workplace – what strategies are in place to reduce waste, electricity and water usage?
  • promotion – how are eco-friendly practices encouraged by your team members? Does this work? Where are the areas for improvement?
  • policies – are there any workplace or business policies in place regarding being a green business? Do they need revision?

Once you’ve identified areas for improvement, you can begin making real changes.

Easy Ways to Operate an Eco-Friendly Business

Keeping in mind the areas you’ve identified where you can improve your business’ eco-friendly practices, consider which ones of these suggestions would fit:

  • use natural light where possible – not only does is save electricity usage, and therefore save you money, but natural light is also kinder on our eyes. Position desks and workstations near windows.
  • go paperless – invest in some cloud storage to keep your documents in rather than printing out and putting in a filing cabinet. This also refers to invoices, where Xero for instance, can invoice digitally.
  • work from home – thanks to COVID-19, many businesses had their employees working from home where possible. Why not continue this trend at least part time, cutting down on commutes and resources used to get to work.
  • meet digitally – virtual meetings have been around for a while but are on the increase. Instead of driving to meet at someone’s office, meet digitally instead.
  • choose reusable products – single use products are costly in resources and price. Invest in reusable products such as mugs, refillable hand sanitiser containers and printer inks.
  • buy sustainable – this means identifying suppliers which are committed to practicing sustainability and using their products or services.

Here at MBP Advisors + Accountants, we strongly believe we are an eco-friendly business, we even won the ICNZB Award for Most Sustainable Bookkeeping Business in New Zealand. . That’s because we are dedicated to being paperless, efficient and environmentally conscious. We plant a tree for every single ream of paper we use and we actively fund environmental initiatives in our local communities. However, we’re always looking for ways we can do better. We’d be keen on learning what your business does too, so let us know in the comments below.

At a time like this, money is tight for pretty much every business. Cutting costs can be a quick and easy way to improve the profitability of your business. Introducing well thought out cost saving tactics can bring immediate savings and ensure you remain profitable in the short term.

But it’s important that cost-control measures are carefully managed. Eliminating errant expenses is clearly beneficial, but indiscriminate cost-cutting could lead to a drop in quality, or poor morale if staff fear being made redundant or are not given the tools they need to do their job efficiently.

This risk is heavily reduced by identifying where you can safely trim costs, setting clear cost-reduction targets, and researching any cost saving tactics before making changes to your business.

Planning Effective Cost Saving Tactics

The first step towards reducing costs is identifying your major cost areas. These are likely to include:

  • Production
  • Purchasing
  • Sales and marketing
  • Financing
  • Administration
  • Facilities maintenance.

Start by assessing your profit and loss statement for the last six months and rank all your expenses from highest to lowest, working your way down the list and identifying areas where you can reduce costs. It’s a good idea to first focus on identifying cost-saving measures in areas where you’ll see the biggest return. For example, it’s smart to work toward saving 5% on a $200,000 expense rather than a slightly higher percentage on a lower-cost expense.

Trial New Ideas

You might find it’s difficult to anticipate savings without actually implementing new systems and processes. Remember that any changes you make don’t need to be permanent. If you aren’t sure if a cost-saving measure is suitable for your business, consider trying it for a few months then assessing the results. This way, you’ll soon get an idea of the real cost savings without having to commit long-term to new processes or changes.

Any new processes or systems should be benchmarked and frequently revisited to ensure they are still suitable for your business. Consider asking staff for feedback around any changes to make sure there are no hidden problems that could be costing you more than the cost-saving value.

If you are in doubt about any potential changes, ask an advisor. We are more than happy to chat through this with you.

Quick Savings

You might be surprised to find that significant savings can be made without having to worry about your quality and affecting performance. Here are the most popular ways to trim costs without making radical changes.

  • Eliminate unnecessary costs – start with waste reduction, heating costs, and utility charges.
  • Reduce inefficiency by identifying manual tasks that could be sped up with technology or completed less frequently.
  • Avoid frequent, small orders that cost more than larger orders and take additional time to complete.
  • Reduce travel expenses by booking air travel earlier and using cheaper accommodation on business trips.
  • Find alternatives to high-priced suppliers or negotiate better payment terms or discounts on purchased goods.
  • Revise your credit policies to encourage prompt payment.
  • Brainstorm quick cost savings with your staff – they might have some useful suggestions you may have overlooked.

Significant Savings

Once you have identified your major cost areas, you may want to investigate potential ways to save money by changing existing processes.

Some of the most common opportunities are listed below, but before adopting any changes you should be aware of any potential damage to your core business activities.

  • Cut payroll costs by outsourcing non-essential activities.
  • Redesign your existing processes to eliminate duplication, and cut time wastage.
  • Make use of current technology, or latest industry thinking.
  • Agree to long-term supply contracts, or guarantee a minimum purchase amount to secure better terms.
  • Trim back or revise your current product offering and remove poor-performing products.
  • Form strategic alliances with other businesses to buy larger volumes.
  • Consider subletting office space, or relocating to a more cost-efficient location.

There may also be other costs such as long-term, fixed-rate business loans or fixed-price contracts for raw materials that you may be able to reduce when these are up for renewal or tender.

Pitfalls to Avoid

Reducing costs can have a negative effect, so you’ll need to be sure that changes will not compromise your operational performance.

Some common pitfalls include:

  • Over-dependence on one supplier could put you at risk if your supplier fails.
  • Reducing your marketing budget could affect your marketing strategy.
  • Tighter control of business finances could leave you without a safety margin if cash flow becomes tight.
  • Cutting short-term costs such as training, research, and development, or advertising can lead to long-term weaknesses.

Employee Costs

Reducing employee-related costs is generally risky and counterproductive in the long-term. Reducing costs such as staff training or meeting times could lead to poor staff morale and reduced productivity.

Changing an employee’s terms and conditions can also create legal issues in some circumstances, so it’s always a good idea to get expert advice before making a decision. Making employees redundant could bring short-term costs and the risk of possible employment proceedings. It may also contribute to low morale.

These problems can be reduced by maintaining clear communication with employees. Introducing cost saving through improved practices and procedures will require a degree of employee ‘buy-in’ so it’s important your employees are aware of why you are making changes. Employees may need additional training and support over these periods.

Next Steps

  • Schedule a staff meeting to review your costs and brainstorm possible saving measures.
  • Commit to an ongoing cost-control and monitoring process (or delegate to key staff to manage the process).
  • Ask our advisors to assist you with cost-saving initiatives or brainstorm ideas.

Please get in touch with us to find out how we can help you to identify and implement some cost saving tactics. Click Here to book a free chat with an MBP Business Partner.

Selling a business is a bit like selling your home. You want to get the best price possible, with the least amount of effort and at the lowest cost to you. What you do need to be clear on are the reasons you want to sell, plus be 100% certain that a sale is the best option for you.

As accountants and business advisors, we regularly play a role in helping clients sell a business. We believe it is important to consult with professionals such as ourselves because selling a business is a specialist area. To demonstrate this, we are sharing some of the processes and knowledge required to achieve a successful, legal and profitable business sale.

What Are Your Reasons for Selling a Business?

There is most likely a lot of your blood, sweat and tears which have gone into your business. There is probably also a large amount of pride and emotional connections associated with it too. So, chances are that you have thought long and hard about whether or not selling your business is the right move for you.

The decision you have come to would have been based on one or more reasons, such as:

  • you are ready to retire
  • you don’t enjoy owning a business any more
  • there are health problems which are affecting your ability to manage your business
  • it is time for a change and you want to do something else
  • you want to release your equity locked within the business
  • there’s a financial downturn and you want to get out now
  • a partnership dispute is causing problems

It is always best though, to ensure that the one or more reasons for selling absolutely require the business to be sold by having a chat with us. For instance, a financial downturn can be beneficial for a business which can pivot and reach a new market. Or employees can be hired to assist when health problems force the owner to step back. If you are 100% clear about your decision, it’s time to move onto the next stage: collating all your paperwork!

Organising Your Paperwork When Selling a Business

It would be a fair assumption that one of the first things an owner considers when deciding to sell their business is what the purchase price should be. However, like with selling of anything, the purchase price cannot simply be plucked out of thin air. Instead it relies on having a solid understanding of and updated knowledge about the business first. This requires you to get all your paperwork in order, including:

  • up to date financial records for current and previous tax years, including profit and lost statements, personal drawings, balance sheets, and employee costs
  • list of assets
  • current business plan
  • supplier contracts are current
  • details about all leases
  • any debts the business has are paid in full or have a plan to be paid prior to the sale
  • any legal issues are resolved
  • all regulations and requirements are complete, including health and safety planning
  • full documentation of all business processes

Finally, you will need to prepare an information memorandum for potential buyers which include all the above items. It should also contain specific details about business growth opportunities and other pertinent information not included elsewhere.

If all of this sounds too challenging or you don’t have time or want to do it, we can help. Get in touch with us today and we can start planning the sale of your business. Next though, we’ll cover how to get a valuation for your business.

How Much is Your Business Worth?

Even if you chose to take the DIY option when selling your business, it is highly recommended that you have it valued professionally. After all, a business valuation completed incorrectly can cost you plenty of money!

When it comes to valuing a New Zealand business, there are three main methods:

  • asset valuation – when you calculate the total sum of assets on your balance sheet
  • market approach – the amount of earning potential your business has which is based upon the theoretical market demand
  • income valuation – projecting the future cashflows of your business

You’ll often find that there is a valuation calculation used too, known as EBITDA. EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortisation. Generally, it is used to identify a business’ operating profit, but can be unreliable when a business is close to break-even.

Now we need to have a chat about price and value. We can help you identify the value of your business, which is taking into consideration the EBITDA, to know how much to ask for your business. However, the price of your business is the amount someone is willing to pay to buy it. Like with calculating its value, there are factors which can affect the price of your business, including:

  • physical presentation of your business
  • current economic climate
  • lifestyle the business provides
  • a comprehensive operating manual ready for an easy takeover
  • condition of fixed assets
  • existing restraints of trade
  • business name and trademarking
  • additional clauses in the sale and purchase agreements

Once you have finished the valuation of your business, it’s time to start looking for a buyer and we’re going to share some tips on doing this with you next.

Where to Find a Buyer When Selling a Business

When selling a property, most people use a real estate agent to help them find a buyer. When selling a business though, you’ve got a few other options up your sleeve. These include:

  • hiring a business broker – a business broker helps connect buyers and sellers, and they usually have an area of expertise. A broker is likely to have a database of buyers, as well as have a solid understanding of how to attract other potential buyers to consider purchasing your business. A broker can help you with the valuing and marketing of your business and expects a commission upon completion of the sale.
  • talking with employees – you may have a current employee who is interested in purchasing the business from you. Already knowing how the business is run is a huge bonus for them, and with some help from you, they may be willing to take the next step.
  • approaching your competitors – instead of having to compete with you, your competitors could buy your business out instead!
  • customers – do you have some raving fans of your business? They may be ready to purchase and run the business themselves.
  • advertising – put ads on social media, radio and even print media asking for interested parties to get in touch.

With interest from buyers comes negotiations and contracts. This is another area where professional expertise is recommended. From business advisors to lawyers, it is best to have everything completed by those who know what they are doing. Yes, they will charge you for their services, but the financial price you can end up paying for mistakes at this time can be far greater.

We’d like to offer you our experience and knowledge as professional accountants and business advisors when selling your business. We can walk you through the process, ensuring you receive the best possible price with the lowest possible amount of stress and costs. Get in touch with the team here at MBP Advisors and Accountants today and let’s meet up for a chat.

Your “war chest” is the financial reserve your business has built up so you can take advantage of an opportunity or cover unexpected costs or emergencies. Building a cash reserve when finances are tight, however, can be difficult. You need money to continue running your business but, if at all possible, you want to keep your reserve account healthy.

Here are some ways to build (or preserve) a cash war chest during a crisis.

Shift all Extra Money to Your Cash Reserve

Some of your costs stay the same during a pandemic, but other expenditures are no longer necessary. You may have had money allocated for business travel or networking events that will not happen. Discretionary money for entertainment or hiring may now be freed up. Take some of that money (or all of it, if possible) and add it to your cash reserves.

Preserve Cash Where Possible

Go through your expenses and see what you can reduce. Are there ways for you to cut costs so additional money can be put into the cash reserves? Are there services you pay for that you don’t need to right now? Are there software subscriptions you don’t use?

Variable costs are often the quickest areas to save money.

Make laying people off the last resort, if at all possible. For some businesses, employees have to be let go but remember that at some point you’ll need to have your business operational again and for that to happen, you need employees.

Take Advantage of Assistance Programs

Government assistance programs are there to help you during this crisis. Pay attention to any loan repayment terms and don’t sign up for anything your business can’t afford to pay back, but if there are programs you’re eligble for, use them.

It’s not just the government offering assistance, either. Financial institutions, large corporations and loan providers are all looking at ways to support small businesses and prevent entrepreneurs from closing up shop. Do some research to see which of those you’re eligible for and apply.

Use that money to cover your expenses, and use any freed up money to build up your reserves.

Make Alternative Arrangements with Suppliers

You may be able to push back payments to your suppliers. Talk to your suppliers to find out if there are ways to extend your payment deadlines without damaging your relationship with them. See if there are arrangements that save you money without costing them a lot. Even slightly extended payment terms can help you with your cash flow so you don’t have to dip into your war chest.

Final Thoughts

When you’re trying to keep your business alive, putting money in the cash war chest might not be high on your priority list. Even if you can’t put money into the reserve, do your best to avoid taking money out of it unless absolutely necessary. If you do have to dip into it, try to pay that money back as quickly as you can.

Find ways to reduce expenses (especially variable expenses) and even bring some money in if you can. There are some things you can do to save yourself some money and live to fight another day.

If you’re worried about cashflow, please get in touch with us.

If you’re considering a business rebranding, you’re likely to have multiple reasons as to why you are likely to take this path. Whatever your reasons, business rebranding isn’t something that just happens overnight and requires identifying the specific reasons why a rebrand is necessary. Some of the main reasons business owners move to rebrand include:

  • repositioning their business to target a new audience or be more appealing to an existing audience
  • branching out to a wider international-based audience
  • updating an old outdated image
  • moving away from a bad reputation
  • a merger with a new company or having new directors join the business
  • making your business stand out from other similar ones

Once you have decided to rebrand, you’ll need to decide upon a rebranding strategy. From here, you’ll need to follow the steps necessary to make the transition from old to the new brand. We’ll cover both points in this article.

Choosing Your Business Rebranding Strategy

You’ve decided to move forward and begin rebranding. To begin this journey, you first need to decide on your rebranding strategy.

  • partial rebrand – more like a subtle image change, a partial rebrand is mostly a visual change to meet the needs of your business and target audience.
  • full brand – a complete reworking of your brand, from the values and mission statement, the products or services you offer and the way the brand looks.

You can involve your target market in this decision. Ask them what they like and don’t like about the brand as it is today. Having an understanding of what they think is incredibly useful!

Of course, the option you end up choosing will depend upon the main reasons you want to rebrand. Once you’ve made your choice, next comes the rebranding steps themselves.

Steps When Undertaking a Business Rebranding

There are five key steps we’re going to individually walk you through when it comes to rebranding your business. They are similar to what you would do when establishing a new brand, which in essence is what a rebrand involves:

Identifying your brand’s target market and audience.

You’ll need to re-establish exactly who your target audience is and where they hang out. Undertaking surveys, observations, competitor analysis and simply identifying who is buying from you will give you the information needed to do this. Nail out your new buyer persona, which includes details such as their age, income, location, likes and dislikes. This information will help you when creating content for your website and social media platforms.

Defining what your business’ mission, values and vision are.

Here you’ll redefine exactly what your business stands for. Why do you do what you do? How will you do it? What are the reasons behind the way you do things? Included in this section is your brand voice. This includes the words you’ll use, along with your tone of voice.

Choosing a new name for your business.

One of the hardest things people find to do is naming a business. You likely spent a considerable amount of time choosing your original name and now need a new one. When brainstorming a new business name, think about making up a new word, changing the spelling of an existing word, using an acronym, combining words or stating what you do. Make sure to check your business name using OneCheck for existing trademarks, domains and social media accounts too.

Coming up with a new slogan for your brand.

A slogan is a catchy little phrase associated with your business. If your old slogan still fits, then keep it. If not, brainstorm ideas for a new one. Think about making a claim, providing instructions, being metaphorical and including compliments within your slogan.

Building your brand’s identity from bottom up.

Here we are talking about your brand’s visual identity. Your logo, colour palette, fonts and imagery are all things to consider. Using the services of a graphic designer here will pay dividends, as they will be able to use all of the information you gathered in steps 1-4 and transform it into a brand guide for your business.

It is often this step which business owners find the easiest out of the entire rebranding process. You have learnt about what worked and what didn’t with your old logo and colours, and usually have a clearer idea of what you do want. In short, look for a logo which is clear and easily recognisable as yours. The colour palette needs to be chosen based upon what your audience would best respond to and is appropriate for you to use in a variety of manners. The fonts need to work with your brand’s voice and vision, and finally, the shapes and imagery need to help tie everything together.

Where to Next in Your Rebranding?

For many total rebrands, everything a business presents to the world needs to be updated. Website, email, social media and contact details all need to be changed and promoted. This can cause a huge issue if your existing audience didn’t know about your rebrand. That is why it is a great idea to keep them in the loop, helping them feel like a part of the change itself, so it isn’t a huge shock when it happens. It will also keep them informed about the changes your business is making, how these changes will benefit them and how to contact you moving forward.

Don’t forget to also include your employees and contractors in the process too. They can act as brand ambassadors, letting people know about the changes on your behalf. They’re also going to feel included and continue to show brand loyalty as they feel involved in the process.

Then it is all systems go when it comes to promoting your new business. A new website domain name will mean that your organic traffic will be almost non-existent at the start. You will need to put considerable effort into the content of your website and can expect to see searches from Google appearing in around three to six months. You can redirect your old domain name to your new one though so that people entering that one will automatically be taken to the new site.

Promoting your rebrand via social media is key, as you will most likely be able to continue to use the same platform accounts. Sending emails to your existing email lists is also a good idea, and paid advertising can help too. If you have kept your followers engaged and updated during the rebranding process, it shouldn’t be too hard to shift their attention to your new brand.

Finally, make sure that you’ve told your suppliers and businesses whose services you use that you have made the change. A phone call gives the personal touch and is appreciated, especially when followed up by an email which includes all of the new details.

If you are on the fence about undertaking a rebrand, a chat with one of our business advisors can help make things clearer and identify a path moving forwards for you and your business. Get in touch with our team today and together we’ll make things happen.