Dec 2020 - Bay of Plenty Business News

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6 BAY OF PLENTY BUSINESS NEWS December 2020 Defensive options in New Zealand Investment market update (for the quarter ended 31 Oct, 2020) WHAT TO DO WITH YOUR MONEY > BY BRETT BELL-BOOTH Investment Adviser with Forsyth Barr Limited in Tauranga, and an Authorised Financial Adviser. Phone (07) 577 5725 or email brett.bell-booth@forsythbarr.co.nz. October capped off a good quarter for the New Zealand equity market, with the earnings reporting season signalling better than expected results for many companies. The government’s relative success in navigating the Covid-19 pandemic was rewarded in October’s election. The shift by centre-right voters towards Jacinda Ardern’s Labour Party resulted in the first one-party majority government in New Zealand since the first MMP election in 1996. This clear-cut win and its political ratification of a more centralist policy platform would likely have comforted most investors. Inflation data for September quarter was lower than expected at +1.4 percent, boosting expectations the RBNZ will likely ease financial conditions even further. Investors’ search for income provided further support for defensive dividend yield stocks including listed property, which had a very strong quarter. A strong housing market flow benefits the economy In addition to stock markets, another beneficiary of ultra-low interest rates is the housing sector. Around the world, house sales, prices, and construction demand have all recovered strongly. The importance of housing to the broader economy should not be underestimated. Increased housing activity is reflected in areas such as retail, manufacturing, and transport. Stronger house prices and the positive wealth effect for homeowners boosts consumer sentiment and retail sales. It supports stronger construction activity, and demand for durable goods such as house furnishings. This has all contributed to the better-than-expected resilience of economies this year. Learning to live with Covid-19 To date, activity in the global economy has exhibited a V-shaped recovery in areas such as housing sales, construction, retail sales, and manufacturing. Many companies in New Zealand and offshore are experiencing better-than-expected outcomes, which is translating through to better employment demand. The recovery may face a setback over the next few months as the latest wave of the pandemic sweeps back through the Northern Hemisphere. However many businesses and economies have adapted to live with the virus. The “working from home” theme is becoming an, at least semi permanent, theme in many economies, with numbers of people moving out of the cities and into the suburbs. While many countries are seeing new virus cases hitting new highs, hospitalisations and deaths are at a fraction of levels seen earlier in the year. The risk of most economies being completely shut down again is low. There also continues to be a number of vaccine prospects in late-stage human trials – the potential for a treatment being available at some stage in 2021 remains reasonable. Investors should be confident that, in general, the trough in earnings is behind us, and a recovery is underway. Uncertainty still ahead, but stick to the plan The commentary above all sounds pretty positive. And clearly equity markets have responded favourably. But these remain unprecedented times. We’re still navigating the first global pandemic in over a century. Interest rates are the lowest in history, which may lead to economic imbalances longer-term. Governments are spending money with abandon, funded largely by central banks printing money, but this can’t last forever. Given the recovery in equity market values since March, we note that: 1. Markets are able to remain resilient in the face of bad news. 2. Share prices reflect the long-term earnings companies will generate over the years and decades ahead, not just the next six to 12 months. 3. It’s not possible to consistently time or predict short-term movements in markets. Overall, it’s important to establish and remain committed to an investment plan that meets your longterm goals. This column is general in nature and is not personalised investment advice. This column has been prepared in good faith based on information obtained from sources believed to be reliable and accurate. Disclosure Statements for Forsyth Barr Authorised Financial Advisers are available on request and free of charge. Clean Sweep for LINK at Annual REINZ Awards ADVERTORIAL LINK celebrated another incredible evening with six wins at the 2020 REINZ Awards. For the fifth year in a row LINK were awarded Large Business Broking Office of the Year! On top of this, LINK won all available awards for the business brokerage industry. With the year it’s been, LINK truly appreciates these successes and the people behind it all – an exceptional way to the end the year. Aaron Toresen, LINK’s chief executive officer, was excited to share the evening with the team. “While 2020 has been extraordinary for lots of reasons, our performance at this year’s REINZ awards was nothing short of sensational. “Winning every category against our competitors in this marketplace was a very welcome reminder of the great company we are all part of. ” Among the 41 awards that were presented, LINK won: • Large Business Brokerage of the Year – LINK Ellerslie • Medium Business Brokerage of the Year – LINK Bay of Plenty • Small Business Broker of the Year – LINK Christchurch • Small Agency of the Year (All Disciplines) – LINK Business Brokers • Business Broker Salesperson of the Year – Bruce Cattell, LINK Ellerslie • Business Broker Rising Star of the Year – Jeff Wiley, LINK Ellerslie LINK Directors and team representatives at REINZ Awards. Photo/REINZ • Finalists also included: • Medium Business Brokerage of the Year – LINK North Shore • Business Broker Salesperson of the Year – Lindsay Sandes, LINK Ellerslie • Business Broker Salesperson of the Year – Martin Plom, LINK Ellerslie • Business Broker Rising Star of the Year – Steve Catley, LINK Bay of Plenty Bindi Norwell, chief executive at REINZ says: “Every year we have a significant number of high-calibre entries, many of whom have won their own local or agency awards making for some extremely tough competition. “It has been great to be able to come together and celebrate success from across the country. To win one of these awards is to be the best of the best, and that is a noteworthy achievement. With a growing reputation for the highest level of customer service, LINK has become the most trusted brokerage focusing on service, value and integrity. The team at LINK is proud of the company’s history and is committed to continuing the tradition of selling businesses, as only LINK can. Aaron Toresen said “Whether a member of our administration team, marketing, finance, management or of course the brokers – who make it all happen – every member of LINK can be enormously proud of this achievement. “Winning any award when pitched against your competitors is a great moment, but to have a clean sweep of every business broking category was the ultimate validation. It takes real teamwork to achieve results like this and my deepest thanks go to every person who makes up part of this special group.” LINK’s size and reach mean that its brokers have the opportunity to utilise their knowledge, experience and connections to successfully sell any business. “We have the best brokers in the business; from the rising star (and the runner up!) to the broker earning the most in New Zealand (and the runners up!) to each category size of office and even an all disciplines award…this was a defining moment for LINK. “With the world changing, LINK’s business model has returned to a focus on NZ, so rest assured the best is yet to come” says Toresen.
December 2020 BAY OF PLENTY BUSINESS NEWS 7 To consumer or not to consumer You don’t need me to tell you that it’s been an extraordinary year… Covid-19, the whole country working from home, several high-profile data security breaches, Privacy Law changes, general elections, and Australia and Argentina beating the All Blacks. This year has certainly had its trials. But, as businesses, we have learned a lot as well. Probably the main shift that we have all seen has been the move to a more flexible workforce. Whether we like it or not, widespread remote working is here to stay. For a number of years there has been a massive focus on mobile working. Ironically, thanks to the pandemic, we may now actually be “on the move” less. For many, our homes have now become our workplaces and offices are emptier than they were before, or are being shared. As we move away from constant mobility, and with more businesses embracing video conferencing, and measuring productivity through outcomes rather than time spent in the office, personal computer (PCs) sales have increased, whereas mobile device sales have slumped. A Recent IDC New Zealand report shows commercial PC sales jumped up a massive 61.5 percent from last year and worldwide mobile phone sales dropped 12 percent in the first quarter this year. Businesses and schools sent people home to study and work. The Ministry of Education handed out 17,000 notebooks to students studying online, and product lines ran out. Computer makers used up stock in weeks that would normally take months. The requirement to technically tool up our workforce to enable them to work from home has brought with it a new set of challenges and options for businesses and organisations to consider. To ensure you support your workforce and protect your business, it’s important that your choice of IT equipment and technical set up, firstly, works for you, and, secondly, does not compromise you from a security perspective. Far too often we have conversations with businesses having issues with IT set ups and security inconsistencies purely based on the hardware and licensing decisions being made. One of the main issues is the purchase of consumer grade products for commercial use. Consumer-based products can look great, but the clue is in the name – they are made for consumer/domestic use – not business. So what are the fundamental differences and why should you buy business-grade technology for businesses? Home v pro, business and personal Licensing for operating system (e.g. Windows) and office products are different for home use. There are different end user licence agreements (EULAs) for these and one key element is that you should not be using personal or home licenses for generating an income. But even more important is the security, integration and business functionality you get with the correct licensing, especially if needing to connect to a remote office or headquarters. What’s in a laptop? Business laptops typically cost 10 to 20 percent more than consumer laptops with similar hardware features, but the premium is a smart investment. Business laptops have key advantages and are made with commercial use in mind. • They are more robust and made to go in and out of bags everyday and to work eight hours-plus per day. • They have options to connect to multiple screens, docking stations and wireless connectivity are easier. • Their business grade software has features that make it easier to manage, TECH TALK > BY TONY SNOW Tony Snow is chief executive and co-founder of Stratus Blue. He can be contacted at Tony@stratusblue.co.nz. connect to the network, and has enhanced security options. • They have a longer lifespan due to swappable components and configuration options – unlike consumer models. • Due to the longer expected lifespan they also come with longer warranties and preferential treatment from suppliers – like getting a replacement machine while yours is getting fixed. Desktop PCs in the future? As we are moving less, desktop PCs are coming back into fashion, not just because the gamers are taking this option, but also because they have real advantages. • PCs last much longer than consumer laptops. • They are easier to upgrade or to replace components. • It’s harder to break or drop a desktop – even the micro or mini versions. • You tend to get a lot more for the same money as a laptop. As a rule of thumb, a $2000 desktop will have better features than a $3000 laptop. If your staff are moving less and most of the computing may be done in one location, it is worth discussing all hardware and licensing options with your IT provider. Emotions do not improve business communication In my time in the debt collection and dispute mediation industry I have had many instances where we step into a dispute that has been literally raging for 12 months with personal insults and at times threats or even instances of violence only for us to step into the fray and have the whole dispute resolved and paid within hours. The client asks us in amazement: “ How the heck did you get that so and so to back down and pay?” We often find the source of the aggression and anger comes from both parties’ inability to see past what they believe is happening and discuss what has actually gone on that led to the disputes. CREDIT CONTROL > BY NICK KERR Nick Kerr is Area Manager BOP for EC Credit Control NZ Ltd. He is also a director of International Private Investigations Ltd. Nick can be reached at nick.kerr@eccreditcontrol.co.nz There is no magic trick or special talent, it is simply that we are trained to de-escalate the situation by removing the emotion – and therefore the emotional response. Once the emotion is removed you are left with facts. And as well-known American political commentator Ben Shapiro says: “Facts don’t care about your feelings.” An analogy of this, is water spilling on someone. If Mr X is walking down the street after having a few of his favourite beverages at the local tavern and a big fat raindrop falls on his shoulder he will most likely brush off the water and get on with his travels. Let’s now put Mr X back in the tavern putting his best efforts into impressing Miss R with witty repartee and smooth dance moves. During a particularly impressive move, Mr G bumps into Mr X and spills a small amount of water on him. This time Mr X reacts with anger and pushes Mr G, starting a bar brawl resulting in injuries and a few arrests. You see the problem in the outlandish scenario above is not the water spilling – it is the perceived disrespect bestowed and the perceived embarrassment suffered. The same factors apply to many other personal and business disputes. Once we get a chance to sit down with both parties in a dispute, we often find that the source of the aggression and anger comes from both parties’ inability to see past what they believe is happening and discuss what has actually gone on that led to the disputes. “I didn’t understand that the extra work I asked for would cost that much” – turns into “you are a ripoff artist that tried to con me.” And “I really didn’t budget for the extras that I needed as I didn’t even think that I would need them” turns into “this bottom-feeding customer is trying to ruin my business that I have spent 20 years building.” If the conversation was begun calmly, with both sides acknowledging a mistake had been made, and a plan was made to rectify the problem as soon as it was noticed, then the emotions around the fear, embarrassment and frustration would not even occur. And before you knew it, the whole situation would be resolved. As humans, we can be a reactive and emotional bunch, but there are a few things that you can do to avoid the emotional escalation of disputes. 1. Focus on the facts not on feelings or opinions in any communication. 2. Use the three-draft method: in the first draft, write using the most extreme emotions, strong language, insults etc you can come up with. Download every raw emotion into words, then once you have finished, press DELETE. In your second draft, write a still emotional, but more fact-based and polite message and again, once finished push DELETE. In the third version, write only about facts and suggestions of what could be done to rectify the situation. Only then do you press SEND. Using this method you can get out all of the frustration off your chest and still keep your composure and professionalism. 3. And if you feel that the positions held by both parties are too far away to come together or if de-escalation does not seem possible – especially if the dispute involves large amounts or key relationships – then use a third-party mediator. Just a thought. As always, this is not meant to be prescriptive or legal advice.
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