Johnston Associates Chartered Accountants

Masterminding Brighter Tomorrows

Business Planning & Advisory

by

The 3 Cs to consider when pricing your product or service.

When you start out in business one of the keys to your growth and success is knowing how much to charge for your product or service. If your prices are too high you could put off prospective customers; if they are too low you may find it difficult to make a profit.

costs

Here are 3 Cs you need to consider when pricing your product or service.

Customer – Who is your customer? Have you done your market research to determine how much they would be willing to pay for your product or service? Which customers do you want to attract? Is your product or service aimed at a smaller group of customers willing to pay a higher price for a premium offering? Or does it have mass appeal? In which case you might be looking more at budget pricing.

Competition – You need to analyse your competition; and their pricing structure. Because you can bet your bottom dollar that’s exactly what your potential customers will be doing. That’s not to say you should always price match; indeed this can be a risky policy for small businesses as competitive pricing results in a narrower profit margin, making your business vulnerable if costs rise. As a smaller business think about value pricing, what are you offering that your competitors are not?

Costs – A fundamental consideration in pricing is that you need to cover your costs and make a profit. After all, we’re all in business to make money. How much does your product cost you? Don’t forget that the cost of a product is more than the actual cost of an item, you’ll need to factor in your overheads. Here at Johnston Associates South we can help you determine the prices you should be setting for your product or service by ensuring you have a fuller understanding of your costs and overheads.

Pricing structure is not just important for those of you starting out in business, it’s something you need to review on a regular basis, contact us to find out how our business consulting division can help you with this.

by

Teamwork makes the dream work… 3 professionals to have on your side.

Here at Johnston Associates South, your chartered accountants in Nelson and Marlborough we believe that great teamwork is key to success in business.

teamwork

When you hire a new team member at your organisation, we’ve no doubt that you have the correct HR processes in place to ensure that they’re going to be a great fit for your business. But it’s worth remembering that team work is not just about your staff and employees, it’s also about key third-party professionals who are going to help your company succeed and grow.

Many entrepreneurs and business leaders have been known to say, “Surround yourself with people who are smarter than you”, and we couldn’t agree more. Whether you’re starting out in business, going through a growth phase or implementing your exit strategy you’ll always need a sound group of business advisors around you.

Here are a few professionals to consider as part of your team…

Business banking advisor – Whichever financial institution you choose to bank with, you’ll likely be offered an opportunity to meet with a professional from their business banking team. Shop around to find out which bank is offering the right deals for your business. Consider account charges, interest rates and any other extras that would be valuable to your business. As an example, some banks offer conference facilities and meeting rooms for their business clients; if you’re just starting out and don’t have these facilities in your work space, this might be important for you.

Lawyer – You may have used a lawyer for personal legal matters before, but you will need completely different legal advise when you’re running a business so consider wisely. The New Zealand Law Society has lots of information on how to choose a lawyer. Discover it HERE. Your key third-party professionals will often have to collaborate on business matters, here at Johnston Associates South we’re proud to have good working relationships with numerous legal practices throughout Nelson and Marlborough.

Chartered Accountant – That’s where we come in… We forge strong relationships with our clients, and these are developed through a truly personal service. We offer advice and information on corporate governance, company structure and strategy, accounting systems evaluation and implementation and debt management. We also have a specialist Business Consulting Division, offering clients the services of a Virtual Chief Executive Officer and Virtual Chief Financial Officer on a part-time basis; behind these roles we offer support in the form of business analysis and forecasting, and also ensure all compliance and tax reporting is up to date and current. Overall we provide a 360-degree approach to business consulting. You are welcome to interview us… Just give us a call!

 

by

We’ve got their back and yours too!

Johnston Associates South Chartered Accountants formed part of the line up backing the Tasman Makos for success in 2015 and we’re proud to announce that, once again, we’re on board as a brand sponsor of the Tasman Rugby Union for the 2016 season.

You’ll see our Johnston Associates South logo sits proudly on the back of the jersey, but of course it’s not just the Makos backs we’ve got covered… We’ve got you, our clients, covered too! As Chartered Accountants, we undertake specific examinations and continued professional development to ensure that we can meet the high standards that your business needs to help you grow successfully.

Screen Shot 2016-05-19 at 2.13.12 am

Here are 5 ways we have your back at any stage of your business journey:

  • We use strategic knowledge to formulate business plans. You might need these for start up finance, investors, or your board. You’ll definitely need one as an entrepreneur to allow you monitor your business growth.
  • We’re trained to restructure corporate procedures and policies, to help you improve your business’ performance. If you’ve just bought a business, contact us to find out how we can help make it more efficient.
  • Don’t fall foul of the taxman. We have a resident tax specialist who can come up with a financial tax plan, as your business grows.
  • We work with other seasoned professionals in Nelson, Tasman and Marlborough. Our relationships with other service providers, from lawyers to banks and many others, ensures that whatever stage your business is at, and whatever processes you’re going through we can liaise (given your permission) with other key parties to ensure that your journey to business success is plain sailing.
  • We help with your succession plan, even before you’ve thought about moving on. Preparation is the key to any success, and deciding when and how you want to leave your business is as important as deciding when and how you want to start it.

Contact us to talk to a member of our specialist business consulting team and discover how we can cover your back!

by

5 great reasons to base your business in Marlborough.

Here at Johnston Associated South Chartered Accountants, we’re proud to be based in the top of the South. We think we live and work in a fairly special part of the world, and we’re pretty sure you’ll agree, but just in case you need further convincing…

Here are 5 great reasons to base your business in Marlborough:

  1. Marlborough has experienced the third largest gross domestic product increase in New Zealand over the past five years. Marlborough GDP increased to $2.5 billion in the year ending March 2015. This was an increase of 2.2 per cent on the previous year and an increase of 28 per cent since 2010. Read the full story HERE.
  2. The annual Regional Economic Development Report, released late last year, revealed that compared with the national average, Marlborough had a higher employment rate, lower level of unemployment, cheaper average house prices and cheaper rent. Read more statistics from the report HERE.
  3. If you’re a B2B service provider Marlborough District Council is actively looking to support you. This article documents that through the Marlborough Smart and Connected initiative, MDC has work under way to identify how they can help you contribute even more to the region’s better known sectors, and to the Marlborough economy as a whole.
  4. It’s not all about the working week… With over 250 parks and reserves across the district, and boasting 20 per cent of New Zealand’s coastline. There are heaps of ways that you can kick back at the weekend. Whether you want to tramp, fish, swim, mountain bike, or enjoy a family picnic; the beautiful Marlborough region is waiting for you.
  5. Johnston Associates South now have an office in central Blenheim. As well as our office in Havelock, you can now visit us at Level 1, 30 Maxwell Road in Blenheim; we’re pleased to introduce you to Adrian Ferris and Rob Rowe.

by

So you’re thinking of selling?

Here at Johnston Associates South Chartered Accountants for Nelson and Marlborough we love being part of our clients’ business journey. Whatever stage you’re at we enjoy hopping on board and helping you get to where you want to be.

Let’s face it, we’re all in business to make money, and a critical decision for any business owner is deciding at what stage they’re going hand over the reins to maximise investment. Selling a business can be a complex process and whether or not you make a profit will often depend on why you’re selling and your timing. Of course the strength of your business’ activities and framework will play a part in boosting returns.

We’ve been involved in the process of transferring a business for many clients, and today we wanted to share with you our top three tips if you’re thinking of selling.
  1. Speculate to accumulate – If you’re thinking of selling you might have decided to cut back on operating costs, but carefully consider how and where you will lessen your expenditure as you will still need to promote your business without disclosing that it is for sale. This will often require a level of investment. You may need to update your website or spend more time at industry functions, in the lead up to marketing your business.
  2. The devil’s in the detail – If you’ve watched Dragon’s Den you’ll know that those fire breathing entrepreneurs are most impressed with the candidates that know their numbers. It helps to carry out due diligence on your own business prior to selling. If you can view your business through the eyes of a potential purchaser you may identify any likely issues, if you can answer  your prospective purchaser’s questions with detailed facts and clear numbers you’ll be more likely to progress to sale.
  3. Gather your team – If you’ve been successful in business, you’ll know how important it is to enlist the help of experts when required. This advisory support shouldn’t be neglected when you’re selling, you need your A-team. The players on your side will likely be your lawyer, possibly a broker, possibly your business banker and definitely your chartered accountant. Don’t forget that once your business is sold, you’ll need to figure out how to handle the profit, we can help there too.

If you’d like to discuss selling your business with our business advisory team get in touch, we’d love to hear from you.

by

Why running an obstacle race is like running a business.

Mud race runners, tries to make it through the tire trap

This coming weekend sees the second annual Wairua Warrior obstacle course race at Happy Valley Adventures in Cable Bay, and Johnston Associates South Chartered Accountants is proud to be a sponsor of this awesome event. Our very own Ben Douglas, Julian Stilwell, and Karen Stilwell are all taking part too, running the 12 kilometre course.

Both the six and twelve kilometre courses promise to challenge your strength, endurance and mental attitude, and we figure that’s a bit like running a business.

Throughout your business journey, you’re sure to come up against obstacles, it’s how you overcome them that will prove your mettle, we put together a list of three challenges we often see businesses experiencing. As Chartered Accountants we can help you face them head on and become a winner!

  • The tax man – The old adage, “There are two certainties in life death and taxes”, always runs true… Tax penalties can cost your business unnecessary expenditure. At Johnston Associates South we help our clients plan for taxes… Queue another adage, (aren’t we just full of them today?) “Forewarned is forearmed”.
  • Lack of cash flow – Once again the key to overcoming this hurdle is in the planning. As Chartered Accountants we don’t just look at the historical figures we’re consistently helping our clients plan for the future. Budgets and forecasts prepared by our specialist business consulting division could be the leg up you need to get you over the wall to the finish line.
  • Owner dependence – This is far and away one of the biggest challenges small owner/operated businesses face. You’re heads down, tail up pretty much trying to do it all on your own. If you think you can’t employ a full time CEO or CFO to take away some of the burden, then once again, our specialist business consulting division can help. We can offer these services virtually, helping you grow your business sustainably. And while we’re on the subject of owner dependence we can also help you with succession planning so your business becomes a viable and saleable asset.