Bay of Plenty Business News March/April 2017

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8 BAY OF PLENTY BUSINESS NEWS March/April 2017 Surviving a media crisis It’s Monday morning, you’ve just settled in at your desk with your morning coffee and the phone rings. It’s a journalist from the local paper. One of your staff has been accused of discriminatory behaviour towards a customer and they want to know if it’s symptomatic of your company culture. What do you do? In situations like this, the way you respond can have a big impact on your businesses’ reputation, so it pays to have a plan. A sound plan will identify spokespeople, other parties that should be kept informed, holding statements and key messages. It needs the flexibility to cater for a wide range of potential crises, without being so generic that it fails to help in any specific scenario. When responding to a crisis, it’s important that the right person is commenting. Generally this should be the business owner or chief executive, particularly when you want to convey sincerity and show you are serious about ensuring the same thing does not happen again. While it can be tempting to deflect blame or go on the attack, often the best response is to apologise early and to offer to do whatever you can to put things right. Denying the allegation or trying to cast blame elsewhere often prolongs the story and risks even more reputational damage. Attempting to justify your position using statistics seldom works either – even if just 0.001 of your staff are discriminatory, that will be seen as one bad egg too many in your team. This tried and true approach doesn’t only apply in business. For example, Dan Carter’s early apology after his recent drink driving charge in France limited the reputational damage from what was, at the end of the day, a terrible lapse in judgement. His decision to drive drunk damaged the All Blacks brand and more significantly put others’ lives at risk, but his early apology and admission that what he did was wrong reduced the length of time the story remained on the front pages. When making an apology, showing sincerity is important. When the Rena grounded on the Astrolabe Reef in 2011, the ship’s owners’ decision to apologise more than a week after the event by video rather than in person caused significant consternation and was spurned by then-Tauranga Mayor Stuart Crosby. When they finally made the decision to fly to New Zealand to apologise in person 10 months after the disaster, it was too little too late. What’s more, an apology is meaningless if people don’t have confidence that you have learnt from the incident and are taking steps to ensure it doesn’t happen again. Tangible actions often speak louder than words for businesses looking to regain public confidence. It’s worth remembering that in 2017, reputation and crisis management needs to be exercised across multiple communications channels, including social media. Negative comments on Facebook or Twitter can quickly snowball if not handled well early on. A good example of this was the uproar that followed a Facebook rant by the owner of Wellington’s Ekim Burger, after a customer’s allegation that the burger bar gave her son food poisoning. The owner’s unapologetic response, which TELLING YOUR STORY > BY JAMES HEFFIELD Director of Bay of Plenty communications consultancy Last Word Writing Services. To find out more visit lastwordwriting.co.nz or email james@lastwordwriting.co.nz. claimed “Almost 20 years in this f***ing industry and never had a person who ate what I cook get sick from it”, caused outrage on social media, and was covered by radio stations and news media across New Zealand. Many of these issues can be mitigated with a bit of planning. While a fast response to a crisis is often critical, it needs to be considered. Speaking off the cuff can be dangerous. An effective response is credible and delivered by the right person at the right time. You can’t always turn a negative into a positive, but you can mitigate the impact, learn from it, and keep your business moving forward. 07 578 9144 Tauranga Windscreen 54 First ave, Tauranga 3110 info@taurangawindscreen.co.nz www.taurangawindscreen.co.nz 15094 Hamilton Windscreen LWP.indd 1 2/12/10 9:23:50 AM
BAY OF PLENTY BUSINESS NEWS March/April 2017 9 Don’t bankroll your customers’ businesses One of the most pertinent lessons for small business owners is that you can’t afford to let your clients use you as their bank because your bank may not be as supportive as they once were. Not that getting a loan has ever been easy, but it suddenly got tougher a couple of years ago and it is likely to remain that way. A common reason Small and Medium-sized Enterprises (SME) owners need shortterm cash top-ups is to manage while slow-paying clients get round to paying their debts. A recent survey by Xero of their users revealed that around 60 percent of invoices are paid late and more than a third are at least two weeks late. Irrespective of where in the world they ran the study, the results are essentially the same. Small businesses have a hard time getting paid. Cash keeps a business going on a day-to-day basis. So businesses that find themselves needing cash top-ups while they wait for their clients to pay up, may be forced MONEY MATTERS > BY STEPHEN GRAHAM Stephen Graham is director and managing partner at BDO Rotorua, Chartered Accountants and Advisers. To find out more visit bdorotorua.co.nz or email rotorua@bdo.co.nz to use alternatives to bank loans, which will almost certainly not be inexpensive. The best approach by far, is to get paid up front where possible. Other strategies that you can employ to mitigate late payments include: • Invoice as soon as possible – this way the value of your work will still be fresh in your client’s mind. Email your invoice for super efficient delivery. • Don’t wait, chase – never procrastinate when dealing with slow payers. Don’t wait until it is two weeks overdue before reminding them, remind them as soon as payment becomes overdue. • Then keep talking – let them know that you are serious about getting paid. • Agree terms up front – best place to start. Advising clients of your costing structure up front helps ensure they’re making an informed decision and so will be less likely to question pricing at invoice time. • Partial up-front payment – a partial payment up front followed by progress payments is a good option, particularly where you have a new client relationship or you have a sale with materials as part of the supply. You don’t want to be left chasing a client for payment well after paying your supplier. At the very least, get the cost of the materials paid for up front. • Variances from agreed terms – ensure you negotiate, and get a written and signed agreement of, any further terms before starting work. This will reduce any nasty surprises on the part of either party. • Be aware of your margins. Slow payers will very quickly ruin any profit. Be prepared to walk away from some jobs. Implementing a strategy is hard, most people take the attitude that any business is better than no business. Wrong! Business is business. If you set client expectations up front and follow through on your strategy, the client will still love you tomorrow. Be the SME that sticks Small and medium businesses are the backbone of the New Zealand economy and contribute 26 percent to this country’s GDP. Unfortunately, the sad fact is that most small to medium enterprises have a short life span. Research by the Institute of Directors shows only three out of ten SMEs get to celebrate their fifth birthday and only one out of ten make it to double digits. With SMEs struggling to achieve longevity what is one of the key characteristics of success? From the get-go they are serious about growing revenue. A sales strategy is a must for all businesses, but especially important for a fledging business. Many start-ups focus solely on creating a great product. It is equally important to convey how great your product is to the right people so they want to do business with you. You need to wake up every morning and be thinking about where your next order or customer is coming from. Let’s face it, a business with no customers or orders is dead in the water. To be successful in sales you need to have a deliberate strategy. You might get by initially with an ad-hoc approach, but the odds will be against you for the long term. Look at Xero, one of New Zealand’s most successful start-ups recognised by international investors. In 2008 it had one customer and grew this to 400,000 by the end of 2014. By the end of 2016 it was close to reaching 900,000 customers. Xero set out a clear vision and has worked towards achieving it. So how can you have a successful sales strategy? Develop a sales vision that is inspiring, motivating, achievable (but a real stretch) and measurable. Know who your target market is and identify prospects. Make sure you know who the decision maker is so you’re talking to the right person. Find out who their influencers are. Understand the ‘value’ of your product or service. You are not selling your company but the value your product GROWING YOUR BUSINESS > BY DARREN MCGARVIE Darren McGarvie is co-founder and Chief Coach of the Firestation, the Bay’s only business growth centre. To find out more go to www.thefirestation.nz or email grow@thefirestation.nz or service provides. Always speak to your prospects on the benefits. Just as importantly take the time to listen to your prospects. The sales process should be a conversation, not a one-way dialogue. This only works if you actively listen. Make sure you follow up and deliver. If you’ve promised a follow up call or material make sure you deliver the goods. This shows you are reliable and are good to your word. You need to commit to your sales on an ongoing basis. Like anything worthwhile, it isn’t easy. It takes perseverance, time and energy, but the rewards are well worth it. Business leader to provide advice on science and innovation The government agency tasked with growing New Zealand’s economy by helping businesses succeed through technology has reappointed local business person and Priority One chair, Brett Hewlett, to its stakeholder advisory group. Callaghan Innovation announced the appointment recently, alongside the reappointment of Claire Robinson and Suse Reynolds. The Stakeholder Advisory Group provides independent, expert advice to the Callaghan Innovation Board. It includes some of the most well-respected people involved in New Zealand innovation. Brett is former CEO of Comvita Limited and an independent director of the US-based specialty medical device and pharmaceutical company Derma Sciences Inc. Claire Robinson is Associate Pro Vice-Chancellor of the College of Creative Arts at Massey University and former head of the Institute of Communication Design. Suse Reynolds is a founder and board member of Angel HQ, the Wellington region’s angel network, and currently an executive director on the Board of Angel Capital Association NZ. Science and Innovation Minister Paul Goldsmith says: “The reappointment of Ms Robinson, Mr Hewlett and Ms Reynolds recognises the valuable skills and insights they all contribute to the advisory group, as well as their work to ensure that Callaghan is connected and engaged with its stakeholders.” Brett Hewlett. www.stratusblue.nz *Read the full article in this paper, or on our website $12.2m Funded for the STRATUS Project TECHNOLOGY SOLUTIONS FROM GROUND TO CLOUD
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Bay of Plenty Business News March/April 2017

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