Bay of Plenty Business News April/May 2018

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18 4 BAY OF PLENTY BUSINESS NEWS April/May 2018 A X Special Event Preview New path to Chinese markets for startups Are you a Kiwi migrant with a great idea for a startup? Or working in a team in startup phase? Then New Zealand’s first Chinese angel fund wants to hear from you. New Zealand’s strength is in its diversity, with new Kiwis arriving from all parts of the world every year. But establishing a career in a new country can be hard, particularly for entrepreneurs. A lack of networks and not understanding the local startup ecosystem are barriers to success, and especially to raising capital. New Zealand’s economy and its investors can’t afford to lose these bright sparks and their ideas to other countries. This is where the New Kiwi Challenge can help. It’s a nationwide startup competition, run over three months, to encourage more new Kiwis to take up entrepreneurship. Entry is open to all migrant founders, irrespective of your country of origin. The challenge was started by Zino Ventures, the first Chinese Venture fund in New Zealand, which is leveraging its network, capital and expertise to enable investee startup companies to scale for growth in Chinese-speaking markets. The New Kiwi Challenge is also supported by UniServices, VicLink and Alibaba Cloud. New Zealand’s 2017 Arch Angel, Deb Hall, will join Zino Ventures’ partner and founder, Nelson Wang, in Tauranga during Techweek to explain the New Kiwi Challenge in more detail, and meet with founders. The New Kiwi Challenge prize-winners will be announced in August, with prizes including the opportunity to present at the Alibaba Cloud competition in Sydney, and a sponsored place on Zino’s China trip to Shanghai and Hangzhou in November. The Zino Growth Fund aims to deliver superior returns by investing $1 million to $2 million in great New Zealand companies, generally at the pre-series A stage or later, based on having a product or service that has been validated in New Zealand and has a unique proposition for the Chinese-speaking markets. To hear about the New Kiwi Challenge in Tauranga during Techweek go online and book your place here: http://clik.vc/ zinoventurestga “Join in the week-long festival, full of events which demonstrate our internationally competitive research, development, entrepreneurship and commercialisation ecosystem. Creating a future for Tauranga and Western Bay complete with high-value, globally relevant knowledge and skills.” P L E N T Y Mon/Tue: 1-4pm/5-8pm @Basestation Wed: All day @ASB Arena Thur: 8.30am-1pm @Mills Reef Tauranga / 21-25 May GrowPlenty – 3 hour futurist workshops – Venture Centre and SO deliver 4 workshops for you to create a future you want to see. 10B Mouths – Wharf42 and Techweek present agritech innovators exploring new ways to feed the world. Unlocking Regional Growth Through Innovation – Waikato University and Priority One with David Teece discuss the economic value of R&D. D E S I G N T H E F U T U R E Create a future you want to see and be a part of... “Growing plenty of talent, ideas, solutions and entrepreneurs who do good for the world” Proud supporters Friday: 10am-2.30pm @Basestation Leading Change in Regional NZ, Investing in the Future of Aotearoa – Impact Investing Network and Bay Trust present, discuss and workshop the long-term social good investing paradigm. More events / to book / go to: http://clik.vc/techweektga18events Techweek Tauranga is curated, co-ordinated and promoted by Venture Centre. Tauranga City Council and Western Bay of Plenty District Council jointly contract Venture Centre in a public-private partnership to implement a pilot of the Digital Enablement Project, the goal of which is “a prosperous region where everyone can access, participate and benefit from digital technologies together.” Venture Centre’s role is to support youth, small business owners and founders (entrepreneurs) to increase use of digital and entrepreneurial mindsets, skillsets, and toolsets to create and grow projects and enterprises which will deliver social and economic benefit to Tauranga and Western Bay.
Cost-effective tax support 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 Another financial year has flashed by and all businesses will soon know if they have paid sufficient provisional tax during the year. A short payment of tax is often the result when your provisional tax payments made during the year fall short of your actual tax due – usually where you have had an increase in profitability over the previous year. A short payment of tax is also caused when you miss making a payment that you should have. In this situation you are likely to not only have Use of Money Interest (UOMI) imposed, but additional tax too. Thankfully there have been some changes to the way Inland Revenue treat short payments of income tax which will take some of the sting out of Inland Revenue’s imposed UOMI rate and calculation. Companies and Trusts now have a safe harbour level similar to that which has been available for individuals for many years. As long as you have met all your tax payment obligations and are within the ‘safe harbour’ level, UOMI may not apply. What if you would prefer to prevent the uncertainty around tax time and pay based on your current year earnings? Recently, Inland Revenue has introduced AIM (Accounting Income Method) – which is available to small businesses and designed to synchronise your provisional tax payments with your GST periods and the profitability of your business. For more information please refer to http://www. ird.govt.nz/news-updates/ accounting-income-methodprov-tax.html. Similar to AIM, is the ability to pay provisional tax using the GST Ratio method. Like AIM, the GST Ratio method allows for the payment of provisional tax with your GST payments. Neither of these will suit all small businesses (we have a mixed use of these by our clients), so it is best to consult with your accountant to see if either may be of benefit to you. However, what can you do if you can’t avoid the implication of UOMI? Companies and Trusts now have a safe harbour level similar to that which has been available for individuals for many years. Your accountant may consider tax pooling where tax can be ‘bought’ or ‘financed’ and a tax intermediary used to pay your tax on the actual due date, as if the money had been paid by you on time. The interest charges are significantly lower than Inland Revenue’s and you avoid any nasty additional tax penalties. Tax Finance is used to pay for future tax payments. You select the amount of time required to finance the payment and pay only the finance cost up front. The principal balance is due at the end of the finance period or as soon as cash is available. Again, the interest cost is lower than Inland Revenue charges and the payment is made on the due date so you avoid any late penalties. There are no credit applications or security. Tax Buying is where you can purchase historical tax which may have been the result of having an excellent business year, an IRD audit or you have found an error and want to make a voluntary disclosure. This is a relatively easy process with one tax intermediary stating savings of approximately 30 percent over Inland Revenue’s UOMI can be achieved. Another option is your accountant working with you and your bank to secure the finance needed to pay your tax. This may be short term or long term finance. The message here is that you have options and the sooner you discuss these or communicate any issues you have with taking care of your tax responsibilities with your accountant, the sooner a plan of action can be put in place. Succession planning needed for key roles, not just owners 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 New Zealand businesses are woefully unprepared for succession planning. Some owners think succession planning doesn’t need to be on their radar, especially if they have no intention of exiting the business in the next decade or more. But there is a crucial part of succession planning that is often overlooked, which can impact all organisations at any stage - when a key staff member or specialist leaves the organisation. It’s vital that business owners and leaders start forward planning for when key people move on. In today’s working environment it is a matter of when, not if, this will happen to your business. Business owners and leaders shouldn’t be surprised by employee churn. It’s a well-researched and documented fact that the num- ber of career changes and positions held have increased dramatically in the last 50 years. We change jobs, industries and careers multiple times during our working life. A major employment survey in New Zealand, by Lawson Williams Consulting It’s vital that business owners and leaders start forward planning for when key people move on. In today’s working environment it is a matter of when, not if, this will happen to your business. Group and the Human Resources Institute of New Zealand, shows the national average staff turnover in 2015 was 18.4 percent. That’s nearly one in every five employees being a new addition to staff teams across the country. The Hudson Report found 63 percent of professionals in New Zealand were either actively or passively looking for work. Only just over onethird expected to be in the same position in 12 months. Nowadays business owners and leaders can expect staff to change roles every two to three years. While some of this will be changes and promotions within the organisation, it still demonstrates the neccessity for all businesses and non-profits to manage the succcession planning of key roles. The benefits are many. Your organisation will end up retaining important knowledge and skills. Business continuity will not be impacted when people leave. It will also reduce training and orientation time when key positions in your business change. Think about your business and you will immediately be able to pinpoint some positions or staff members that are critical to your success. People in these roles have an incredibly complex collection of knowledge, much of which is based on experience and is difficult to quickly replace. Sometimes it is the skillset a person has, rather than the role inself, that is crucial. To make sure you identify all key roles and skillsets in your organisation, ask yourself these questions: Who holds strategic roles and has knowledge in critical areas? When there’s a problem, who do people consult first? Whose job is highly specialised and/or whose skill set is unique? If left open, which position would significantly hurt your business? Which positions would be difficult to fill, because they need particular technical expertise or a high degree of corporate knowledge? Which positions are facing a labour or market shortage? Once you have identified the roles and skillset that are crucial set out a strategy for succession. Your plan needs to have a dual approach of retention to keep staff longer and for succession to fill vacancies when people leave. Effective and proactive succession planning is an important element of a successful business. If you’re not already doing this, then it’s time to make it a priority.
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Bay of Plenty Business News April/May 2018

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