Update from MBS Advisors
Happy New Year and welcome to the first MBS newsletter for 2021!
We hope you all had a great Christmas and New Year.
Hopefully you were all able to enjoy a well-deserved break with family and friends. Several of our team at MBS managed to get away locally and enjoy more of our beautiful country. Being well rested we are all now back on deck and here to help.
The theme of this newsletter is about reflection in these uncertain times and ensuring that you and your business are prepared for any future uncertainty arising from Covid-19.
As always please don’t hesitate to contact any of our Directors and helpful staff – we are here to assist you.
WELCOME TO 2021! What a year 2020 was… none of us saw that coming! While there’s a lot of uncertainty about what 2021 will bring, we can take what we learnt from 2020 and use that information to plan for a better and safer 2021.
As a firm, we learned just how agile our team is. From having to wear the ‘Teacher’ hat to delivering our first webinars remotely to clients. We experienced first-hand the challenges from working from home as did many of our clients.
We’re all relieved to see the end of 2020, but before we completely erase it from our minds, let’s take some time to reflect on all we achieved. A useful exercise is to ask yourself the following questions and write down your answers.
1. What are you / your business / family most proud of from 2020? 2. What was your biggest learning? 3. What is the most valuable thing you learned about yourself? 4. Who were the most influential and supportive people for you? 5. What three things from the year are you most grateful for? 6. What do you wish you’d done more of? 7. What do you wish you’d done less of? 8. What will success look like to you in 2021?
Let’s keep in touch this year, we’re here to support you in any way we can. Get in touch for a review of your business, or book in a Business Planning session to discuss your future goals and aspirations, or perhaps a discussion in relation to how lockdown ready your business is. These are just some of the ways we can help.
No matter what 2021 brings us, we know it’ll be better if we work together to support our teams and communities.
Here’s to 2021!
MBS STAFF HAPPENINGS We would like to congratulate Accountant Harjot Singh for gaining her Bachelor of Business, majoring in Accounting. She is embarking on the remainder of her Chartered Accountancy qualifications during 2021, we wish her success and celebrate her achievement.
ADDITIONS TO THE MBS FAMILY Prior to Christmas there have been a number of additions to the MBS Family –
Associate Kassie Thomas and her partner Phil welcomed their daughter Quinn in September
Director Jeremy Skedgwell and his partner Christine also welcomed their second daughter Sarra also September – a busy month indeed.
Client account manager Sue Brownlie welcomed an addition to the family of an adorable “GrandPuppy” Murphy.
STAYING AFLOAT AND THRIVING IN A DOWN TURN When the future looks uncertain, what can you do to prepare and strengthen your business?
Recent times have certainly shown us that the future path of your business can change in an instant – usually, due to influences that are far beyond our own control. The Covid-19 pandemic and the ongoing global economic recession have both had a negative economic impact on the business world – so, when a downturn strikes, you need to be ready.
The key is to be prepared, to have a ‘Plan B’ and to react in a proactive way to the uncertainty. But what elements of your business should you focus on to get your downturn plan ready?
How to keep your business afloat To keep your business afloat, you’ll need to be agile, innovative and resourceful and being flexible in the face of adversity is also likely to play a big part in your survival. No business owner has all the answers, and there are some important steps to take if you’re going to overcome the challenges of a downturn and stop the business from declining.
Proactive steps to take will include:
* Enhancing your business knowledge – knowledge is power, and being in control of your business data gives you that knowledge.
* Improving your cashflow – during a downturn, money will be tight and your cashflow position is likely to be poor. To improve this, you need to be proactive about reducing overheads, billing your clients promptly and regularly and having processes in place to follow up on overdue invoices.
* Negotiate with your suppliers – if you can negotiate a better deal from your suppliers, that goes a long way to enhancing your cashflow position even if this is simply extending your payment terms. Also be proactive and talk to your landlord about a reduction in rent – or even a rent holiday.
* Accessing additional funding – when your cash reserves get tight, there may be a need to look for additional funding. This could mean asking for an extended overdraft, selling excess or unused assets, even review staff annual leave balances to ensure staff have taken holidays and are well rested.
* Evaluating your market offering – to generate enough revenue to survive, it may be worth evaluating your market offering and making some changes. Do some products deliver a much higher return than others? If so, you could make more money by focusing purely on these products and having a tighter and more profitable product range.
* Evolving your marketing and sales – communication with your customers during a downturn is vital. Keep them in the loop and let them know that your products/services are still there for them and will ensure that your business remains front of mind. Re-evaluate your marketing channels to make sure you’re hitting the right audience and your advertising is providing you with a return.
* Learning to pivot and diversify – some sectors will likely be affected far greater than others during a downturn – for example, the travel and hospitality sectors were badly hit by Covid. If this happens, you may need to pivot into a new niche or sector to find a new audience and more revenue streams. You can also diversify your product range to meet the needs of a wider range of customers, bringing in more revenue streams and bumping up your cash position as a business.
It’s all about having that Plan B in place. When (and if) a downturn hits, you’re then primed and ready to respond.
Talk to us about getting the specific business advice you need.
The better prepared you are, and the faster you react, the more likely it is that you’ll ride out a downturn successfully.
If you’re looking to improve your business planning, upgrade your disaster management plan, or improve your financial model, do come and talk to us.
ARE YOU LOCKDOWN READY? The information overload is real. The ramifications of Covid-19 on businesses are being felt and speculated upon every minute of each day - probably leaving many people feeling overwhelmed.
Here are some simple tips to help you out:
1. Cash/Credit
2. Computers
3. Colleagues
4. Customers
5. Condense
6. Change
7. Communication
8. Compassion
If you need support with developing your Business Continuity Plan to help your business emerge successfully from a potential lockdown, then please get in touch.
WHAT IS TAX FINANCE AND HOW CAN IT HELP? Tax Management NZ (TMNZ) is an IRD approved scheme provider that MBS Advisors works with to assist to manage the rigidity of paying Income Tax. It allows you to pay when it suits your cashflow, instead of the other way around – avoiding penalties and giving you peace of mind.
What are the products available?
Flexitax: Provides a facility to make retrospective tax payments to avoid IRD penalties when original payments are not paid on their due dates.
Tax Finance: Allows you the convenience of planning and matching your future income tax payments around your cashflow.
If you would like to know more, please contact one of our friendly team.
HOLIDAY PAY Working out what an employee gets paid for taking a day off on annual holidays will depend partly on what they have earned in the previous 12 months.
Find out more about how to calculate payment rates for holidays and leave at Employment New Zealand, or using Wolters Kluwer's New Zealand Workforce Manager.
An employee gets an alternative holiday for working on a public holiday that is an otherwise working day.
So, if you have an employee working on these days (who wouldn’t normally work on Saturday), their holiday entitlement is transferred to the following Monday. If your employee would normally work on Saturday, then they’ll get their holiday entitlements on Saturday (the calendar date of the public holiday).
Talk to our payroll department at MBS Advisors for any assistance with this.
WILLS Do you have a current and up to date Will? This is an important legal document everyone should have.
Given recent rule changes if you don't have a Will, this could cause unnecessary delays in having your personal tax affairs up to the date of your death finalised.
Please check with your solicitors on whether you have an up to date Will and let the MBS team know if we can assist at all.
INTEREST RATES Have you ever wondered if you are getting the best Interest Rates from lending or investing? www.interest.co.nz is a great website you can utilise which gives you an up to date list of all lending and deposit rates for NZ Banks, and other Financial Institutions.
Lending rates - https://www.interest.co.nz/borrowing
Investing rates - https://www.interest.co.nz/saving/term-deposits-1-to-5-years
If you would like to have a chat about the difference you pay and what you could pay, we can help. Several of our Directors are also former bankers so feel free to get in touch with any finance assistance you require.
COMMUNITY NEWS Congratulations to the MBS Advisors Morrinsville-Piako Cricket Association, with their premier side making a fantastic start to the T20 competition.
The team managed to dismiss Hinuera for 57 runs, in what was a superb team effort with all eight bowlers taking at least one wicket each. The runs were then chased down in the 10th over with 7 wickets remaining.
We wish the team all the best in their endeavour to reach the T20 final.
IF YOU'VE MADE IT THIS FAR..... Life is short, smile while you have teeth.
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