McLEAN AND CO DECEMBER  2003 NEWSLETTER PAGE 2     

INLAND REVENUE DEPARTMENT 2002-2003 REPORT- OVERVIEW               

In 2002- 2003:

·          Tax revenue was $34.97 billion, 81% of the Government's total revenue.

·          Student Loan repayments were $386.9 million.

·          $273.5 million in child support payments was collected.

·          $1,017 million in family assistance was distributed.

·          $111 million in child support was paid to custodial parents.

·          $56 million of paid parental leave was distributed.

·          there were 5.529 million registered taxpayers as at 30 June 2003 .

·          212,585 new IRD numbers were registered.

·          the net taxation effect of adjustments made as a result of audit activity was $899.4 million. 

SMALL BUSINESS DEBT COLLECTION STRATEGIES  

Coping with ever increasing costs is one thing - making sure you get all the money that's due you from customers or clients is another.   Here is how many business owners deal with the problem:

·          Set Established Payment Guidelines.   To avoid problems in the first place, establish ground rules for how payment should be made and stick to them.  Clearly spell out your terms of sale and payment options on your order form or brochure.

·          Get it in Writing.   Get the customer to sign an agreement/ contract or memo of understanding as to the payment terms, and explain these also to the client.

·          If the Project or Supply is ongoing charge monthly instead of at the end of the Supply Period.   If payment is not received within the agreed term, do no more work for them until payment is made.

·          Send a series of Reminders.   However if written reminders don’t work call personally and ask for the payment.

·          Evaluate the Situation. Present Options.   If the client is overdue by a small margin (say a week) give them some time. But if the days turn into weeks and months, start with a friendly phone call to follow up and let them know the payment is overdue. Try and get a date for payment and follow up if they don’t meet that date.

·          Be Persistent in trying to Collect

·          Send a Registered Letter. This has the effect of getting your point across without having to confront them verbally or in person.  

·          After all else fails, let them know that you are either turning over the matter to either your Lawyer or Collection Agency, or taking them to the Small Claims Court .

·          Be Willing to take Legal Action.

·          Know when to Quit.   Try to collect if you have the time and ambition to do so, but if not, just write it off to experience.  Sometimes the money is not worth the aggravation.

ACC TIME OUT FOR EARNERS  

Earners planning on taking a break from employment or taking unpaid leave from work for more than two weeks (e.g. for an overseas trip, or study leave) need to think about income protection.   They will not be eligible for weekly compensation if they are injured after the first two weeks of unpaid leave. 

This is because they will be classified as a non-earner at the time of injury (therefore not eligible for weekly compensation). 

ACC Corporation has a product called ACC Time Out for people taking a break from work.  A minimum of three months and a maximum of five years cover can be purchased.  The person can choose to be covered either immediately from the date of incapacity (following a one week stand down period) or to defer this cover to when they are able to return to work.     The person must be in continuous employment for 12 months prior to application.

      McLEAN AND CO DECEMBER 2003 NEWSLETTER PAGE 3     

 ACC – THINGS YOU SHOULD ADVISE THEM ABOUT   

Heres some things you should advice ACC Corporation direct about:

ACC Corporation's telephone number is 0508 426 837.  

FRANCHISING- ADVANTAGES- DISADVANTAGES   

Franchising is a method of distribution or marketing in which a business (the franchisor) grants a contract to an individual or business (the franchisee) the right to carry on a business in a prescribed way in a particular territory for a specified period.   

ADVANTAGES TO FRANCHISOR 

DISADVANTAGES TO FRANCHISOR 

ADVANTAGES TO FRANCHISEE

DISADVANTAGES TO FRANCHISEE

      McLEAN AND CO DECEMBER 2003 NEWSLETTER PAGE 4     

CREATING A SUCCESSFUL MARKET NICHE  

The person who finds or creates a special niche, gets the cream of our societies financial rewards  e.g Bill Gates of Microsoft Corporation.     The niche, and the person who creates them, is the main factor that separates one product from others. To out-niche your competitors you must focus on these "14 Principles" of niche creation at all times.  Observe the ones you apply to your business, product, or service . 

1. The Principle of Adaptation   The simplest way to create a new idea is to do what others in another business or industry are doing. Next, see if you can adapt it to your own business, product, or service. 

2. The Principle of Addition   Can you add something extra to your product or service that your competition doesn't have or isn't doing? 

3. The Principle of Combination      What positive elements can you combine from another product or service to make yours better?"  

4. The Principle of Customization   Can you find little ways to personalize a part of your product or service? That's a quick, easy, and cheap way to create niches. Can you make your product or service more personal? 

5. The Principle of Ease and Convenience    Can you find more ways to make your product or service easier and more convenient to buy, use, or own? Then you'll have a strong niche. 

6. The Principle of Elimination    What negative or inconvenience can you eliminate for your customer, with your product or service. People not only pay for more they'll pay for less. Less irritations, less waiting, less inconveniences. 

7. The Principle of Enlargement    Do people like your service or product? Then it's a sure-fire bet there is a segment of your market that would like even more of it. Can you super-size something? 

8. The Principle of Entertainment    From cradle to grave, we all have this inner urge to be entertained, amused, or fascinated - especially before we spend our money. A relaxed customer spends more. Find little ways to amuse customers before, while, or after they buy your product or service. 

9. The Principle of Longevity    It's making some feature of your product or service last longer. It can also include making a positive experience or feeling last longer. If you can do either, you will have a niche that's hard to match. 

10. The Principle of Portability    People hate to be tied down. So, if your product allows people the freedom to use your product or service in more than one place, that's a powerful niche. 

11. The Principle of Reduction    If you sell a product or service, is there any way to reduce a certain feature to make it more convenient? More portable? Or easier to use? Can you reduce it and make it more affordable for another type of customer? 

12. The Principle of Reversal    Look at what features or services your competition is offering or not offering and reverse them. If they close on weekends, can you be open? If they cater to seniors, target more young people. Or if they cater to high-end customers, target more low-end volume customers etc? The list is endless. 

13. The Principle of Safety   If you can show others how your product or service can add safety or reduce risk, you'd have a powerful niche. People hate to experience loss, feel insecure, or waste money. Try to think of little ways you can help people avoid the above with your product or service. 

14. The Principle of Speed    You should always be thinking, "What can I do faster than my competitors- without reducing quality?"  Can you fill your orders faster?  Can you give faster service?  Can your product get faster results?  Can you resolve customer issues faster?  Think speed! 

By following the above suggestions, you'll be able to create powerful money-making niches and outperform your competitors. 

      McLEAN AND CO DECEMBER 2003 NEWSLETTER PAGE 5     

 KEEP THE CASH FLOWING  

A thriving business is so often a vulnerable business.   The increased business can mean that attention shifts away from you’re your business’s lifeblood- cashflow.  

Cash flow, or working capital as it is called, is the money available to pay for the day-to-day operation of your business.   Without it your business, no wonder how profitable or successful, can’t survive.    A failure to manage working capital is a major cause of business failure, so careful management of cash flow is essential.  

Adoption of these strategies are important to take control of your cash flow and ensure that your business thrives and prospers:

·          Never run out of Cash- running out of cash will  result in business failure.

·          Cash is King-  it’s important to recognize that cash is what keeps your business alive.   Manage it with care and the attention it deserves, its very unforgiving if you don’t.

·          Know the Cash Balance right now- even the most intelligent and experienced person will fail if they are making business decisions using inaccurate or incomplete cash balances.

·          Do Today’s Work Today-   the key to keeping an accurate cash balance in your accounting system is to do today’s work today.   When you do this, you will have the numbers you need- when you need them.

·          Either you do the Work or You have Someone Else do it-   The work must be done. You can’t ignore it.   You do the work or have someone else do it.

·          Don’t Manage the Bank Balance-  the Bank Balance and the Cash Balance are two different animals. You have to reconcile your bank balance and allow for unpresented items to derive your correct position.

·          Know what you expect the Cash Balance to be Six Months from now-  this one question will give you a foresight into your future business position.

·          Cash Flow Problems don’t just happen-   an owner must be able to see a future cash flow problem in time to do something about, thus the need for future forecasting.

·          You absolutely, positively must have Cash Flow Projections-   Cash Flow Projections are the key to making wise and profitable business decisions.

·          Eliminate your Cash Flow Worries so that you are free to do what you do best   (taking care of Customers and make more Money).

IDEAS TO IMPROVE CASH FLOW- CREDITORS

Continued Next Page…………..

      McLEAN AND CO DECEMBER  2003 NEWSLETTER PAGE 6     

KEEP THE CASH FLOWING (continued)  

IDEAS TO IMPROVE CASH FLOW- SUPPLIERS

·          Ask alternate suppliers to tender.

·          Negotiate longer terms from suppliers.

·          Introduce Purchase Orders to reduce discretionary staff spending.

·          Don’t pay early unless big incentives are given

·          Use a 30 day Credit Card.  This can add 51 days to terms.   Warning- dangerous to your financial health if misused!!

IDEAS TO IMPROVE CASH FLOW- STOCK

·          Identify surplus stock for sale and return

·          Set up a just in time Stock Replacement System

·          Create a Stock Holding Register.

·          Set minimum and maximum levels for each stock line.

IDEAS TO IMPROVE CASH FLOW- TO KEEP CASH HERE

·          Identify and sell surplus assets.

·          Consider sale and lease back of productive assets.

·          Extend payment to shareholders.

·          Offer equity in business for cash.

·          Assess your bank fees. Renegotiate if necessary.

·          Combine multiple accounts into one.

·          Lease assets and equipment and retain useful cash.

·          Delay capital equipment purchases.

·          Get electronic banking set up so you can see your cash position when you need too, not when the bank sends out statements.

·          Put surplus cash into high interest Term Deposits or Cash Management Accounts.-  Cash Management Accounts can be re-drawn if the business needs it quickly.

·          Create a separate account for staff entitlements such as super, holiday pay, long service leave.   Treat it as a savings account.

·          Buy shares in other quality companies with spare cash and keep adding to it over time.  It’s easily liquidated when you need it.

THINGS WE CAN LEARN FROM A DOG

·          Never pass the opportunity to go for a joy ride.

·          Allow the experience of fresh wind in your face to be pure ecstacy.

·          When loved ones come home, always run to greet them.

·          When it’s in your best interest, practice obedience.

·          Let others know when they’ve invaded your territory.

·          Take naps and stretch before rising.

·          Run, romp and play daily.

·          Eat with gusto and enthusiasm.

·          Be loyal.

·          Never pretend to be something your not.

·          If you want lies buried, dig until you find it.

·          When someone is having a bad day, be silent, sit close by and muzzle them gently.

·          Thrive on attention and let people touch you

·          Avoid biting when a simple growl will do.

·          On hot days, drink lots of water and lie under a shady tree.

·          When you are happy, dance around and wag your entire body.

·          No matter how often you’re scolded, don’t buy into the guilt thing and pout- run right back and make friends.

     MERRY XMAS AND A HAPPY NEW YEAR