July 2023 - Bay of Plenty Business News

July 2023 BAY OF PLENTY BUSINESS NEWS 15
MANAGING DURING A RECESSION
CREDIT CONTROL
> BY NICK KERR
Nick Kerr is regional manager for Debt Free and director of
International Private Investigations Ltd. He can be reached on
021 876 527 and nick.kerr@debtfree.net.nz
So its official: we are
in a recession. Now
what? During an economic
downturn it is essential
to practise both corporate and
individual safe credit management
to minimise the risk of
financial losses and perhaps
avoid turning a speedbump
into a brick wall.
With the recent plague,
huge material cost increases
across many essential industries,
massive changes to how
we work, increased unemployment
coupled with staff
shortages (a strange dichotomy
indeed) huge cost of living
increases across-the-board
the economy has clearly taken
a hit and this has negatively
impacted people and businesses
alike.
However with safe credit
management practices individuals
and businesses can have a
much better chance of keeping
their finances in check during
these tough times and therefore
make recovery easier,
cheaper and less stressful.
Here are some safe credit
management practices to help
you manage your finances
during a recession:
Manage your cash flow
Cash flow management is crucial
during an economic downturn.
You should keep an eye
on your accounts receivables
to ensure that your clients are
paying on time. Late or unpaid
receivables can cause cash
flow problems, so it’s essential
to follow up on overdue payments
promptly.
Moreover, you should also
manage your accounts payables
by negotiating payment
terms that suit your cash flow
before any amounts are overdue.
Often you can find some
very good savings by simply
going through your bank statement
and culling unnecessary
expenses.
I followed my own advice
and found nearly $100 per
month savings by cancelling
the insurance on a car I haven’t
owned for over a year, cancelling
several subscriptions to
software that I no longer use
and deleting an old Netflix
account as I get one free with
my phone plan.
Shop around for suppliers
– savings are everywhere to be
found, you just have to look.
Monitor and protect your
credit score
Your credit score can significantly
impact your ability to
access credit during a recession.
A good credit score will
help you secure loans at more
favourable rates while a poor
credit score can lead to higher
rates or being denied credit
altogether. It’s essential to
monitor your credit score regularly
to identify any discrepancies
or errors that may be lowering
your score. I have seen
peoples credit score decimated
for 5 years; this may have been
the case needlessly if they had
sought advice and had a more
strategic way of thinking.
Prioritise your debts
During a recession it’s vital
to prioritise debts to ensure
that you can meet essential
expenses. Prioritising your
debts means focusing on paying
off the most critical debts
first such as your mortgage or
rent utilities and food. Once
you have taken care of the
essentials you can then focus
on your other debts. As always,
communicate with creditors
if there are relief provisions
available (income insurance,
hardship)
Build an emergency fund
Building an emergency fund
is an effective way to manage
your finances during a recession.
An emergency fund can
help you cover unexpected
expenses or help you get
through periods of reduced
income. It’s essential to build
an emergency fund even if you
have other savings or investments
because those may not
be easily accessible during
times of crisis as we have seen
in other countries, such as the
Greek economic crisis.
Avoid new debt
During tough financial times
it’s so easy to think that a temporary
influx of cash is the
answer, which may well be
the case, unless you are borrowing
from your future self.
It’s best to avoid taking on
new debt unless it’s absolutely
necessary. Taking on new debt
can add to your financial burden
and make it even more
challenging to manage your
finances in later times. It’s better
to focus on paying off your
existing debt using a “domino”
debt payment schedule and
building an emergency fund.
Often recovering from the
choices made trying to get out
of a situation is far more difficult
than recovering from the
situation itself.
Avoid opportunity vultures
During economic hardship
the charlatans come out of the
woodwork: the, “join my team
and make thousands of dollars
for almost no work a day!”
Of these “wealth building”
multilevel marketing schemes
(that may or may not resemble
certain Egyptian monuments)
very few ever make anyone
wealthy, other than those at
the top. With any opportunity,
research and due diligence
are your best defences against
potential loss.
In conclusion, safe personal
credit management practices
are essential for survival
during a recession. Managing
your cash flow, monitoring
your credit score, prioritising
your debts, building an emergency
fund and avoiding new
debt are essential practices that
can help you navigate tough
economic times.
By implementing these
strategies, you can keep your
finances in check and prepare
yourself for any challenges
that come your way.
Just a thought.
Workplace culture is key
Organisational work culture plays a pivotal role in shaping the success and well-being of a company and
its employees. It’s something that we hear a lot about, but what actually defines a good culture vs a bad
workplace culture?
HUMAN RESOURCES
> BY KELLIE HAMLETT
Talent ID are Recruitment Specialists and can support you through your
recruitment process. Please feel free to talk to us about this by calling
07 349 1081 or emailing kellie@talentid.co.nz
While a good work culture
fosters productivity, innovation
and employee satisfaction,
a bad work culture can
have detrimental effects on morale,
performance, and overall organisational
health. Here I delve into the
characteristics that distinguish a
good work culture from a bad one.
A good work culture can be characterised
by several key elements.
Firstly, it promotes open communication
and transparency, fostering
an environment where employees
feel comfortable expressing their
ideas, concerns, and feedback.
Furthermore, a good work culture
encourages collaboration and
teamwork, fostering a sense of
camaraderie and shared purpose.
In such a culture, employees are
empowered to take ownership of
their work and are recognised for
their contributions.
Additionally, a good work culture
values work-life balance and
prioritises employee well-being.
Organisations with a positive culture
offer flexible work arrangements,
support personal growth
and development, and provide
resources to enhance physical and
mental health.
Finally, a good work culture
embraces diversity and inclusion,
recognizing and respecting the
unique perspectives and experiences
of employees.
At the other end of the spectrum,
a bad work culture exhibits distinct
characteristics that hinder organisational
success. One common
trait of a bad work culture is poor
communication, where information
is withheld, feedback is ignored,
and decision-making is opaque.
This lack of transparency erodes
trust and leads to frustration among
employees.
Moreover, a toxic work culture
often manifests in excessive competition
and a lack of collaboration.
Employees are pitted against
each other, hindering teamwork
and stifling innovation. In such
environments, blame-shifting and
finger-pointing become commonplace,
leading to a toxic and unproductive
work atmosphere.
A bad work culture also neglects
employee well-being, emphasising
long working hours, unrealistic
expectations, and a lack of support.
This approach leads to burnout,
decreased motivation, and ultimately,
a higher employee turnover
rate.
The difference between good
and bad work cultures has a profound
impact on both employees
and organisations. In a good work
culture, employees feel motivated,
engaged, and supported. This translates
into higher levels of productivity,
increased creativity, and
improved overall performance.
Additionally, employees are more
likely to stay with the organisation,
reducing turnover and the
associated costs of recruitment and
training.
In contrast, a bad work culture
takes a toll on employee morale
and well-being. This often results
in decreased productivity, reduced
quality of work, and higher absenteeism
rates. A toxic work environment
fosters stress, anxiety, and
dissatisfaction, leading to negative
impacts on mental and physical
health.
For organisations, a good work
culture enhances their reputation
and employer brand, making them a
more attractive option for top talent.
It creates a positive feedback loop,
with satisfied employees becoming
advocates for the company, attracting
further talent and customers.
Conversely, a bad work culture
tarnishes the organisation’s image,
leading to difficulty in recruitment
and potential damage to its brand
reputation.
Transforming a toxic work culture
requires commitment and effort
from both leaders and employees.
By fostering open communication,
leading by example, setting clear
expectations, promoting work-life
balance, investing in professional
development, celebrating diversity,
and recognising achievements,
organisations can make significant
strides toward building a positive
and thriving work culture. The
resulting benefits include higher
employee engagement, increased
productivity, improved retention
rates, and a stronger organisational
reputation in the long run.
NEW INDUSTRIAL
BLOCK TO OPEN
IN ROTORUA
Peka Lands Trust is pleased to announce
that development of a 13ha block south of
Rotorua will commence in 2023.
Located just south of Rotorua, the Peka
block, comprises 633 hectares with over
2000 beneficiaries.
Plans for the Industrial Development
were initiated in 2020 after the harvest
of over 400ha of pine planted in the mid
1980’s. A masterplan for the development of
the 13 hectares was completed with Council
and Waka Kotahi involvement.
The opportunity to bring the start date of
the development forward was presented by
way of funding opportunities available on
application through the Regional Strategic
Partnership Fund, Peka Lands Trust applied
and were successful in securing a loan of $6
million.
A ground-breaking ceremony took place
in June, commencing stage one of the project.
The Minister of Regional Development
and Transport, Hon Kiritapu Allan, spoke at
the ceremony.
Helen Beckett, chair of Peka Lands
Trust, said the planning for the development
has been nearly 40 years in the making.
“The trees were planted with the intention
of providing opportunities to create
future wealth for all beneficiaries of Peka
Lands Trust – the job is now ours to see this
to fruition”.
With no other industrial zones available
in Rotorua, transitioning from harvested
land to an industrial park has been supported
by Rotorua Lakes Council and RotoruaNZ.
RotoruaNZ chief executive Andrew Wilson
said, “The development of Peka Block
is great news for Rotorua. It will allow for
more business expansion, create more jobs,
and further contribute to the economic
development in our city.”