Issue 2 - Polson Higgs

Issue 2
2009
Milk - a formula for success
Providing quality products backed up
by top service is helping Milk Contemporary
Baby Store to find its niche in the competitive
retail market in Christchurch.
The baby boutique has won back-to-back
awards in the Champion Canterbury awards
- it was named as the champion retailer in
the small enterprise category recently.
Owners Malcolm Cleugh and his wife,
Nicola Thomas, spotted a gap in the market
when starting their own family. Disappointed
by some mediocre service and products,
they set about sourcing fine clothing such
as merino jerseys, well-made prams and
high chairs, and designer gifts.
The success Malcolm and Nicola and
co-owner Jenni Saunders have earned has
been built on solid foundations. They spent
a year doing research to ensure there would
be demand for a high-end business.
Phillip Roth and Debbie Sherratt from
Business Services at Polson Higgs have
been a sounding board since the start.
"When we were setting up, we knew it was
important to have a professional organisation
helping us with various aspects such as
benchmarking, and Phillip and Debbie have
done that for us very well," Malcolm says.
Phillip says management capability, a
clever location, underpinned by solid system
processes and clear reporting and monitoring
functions are contributing to a sound business.
It was launched in Ferrymead in 2005
and within two years the owners were looking
for new premises because of the demand.
Staff numbers have expanded to 12 with
an emphasis on providing knowledgeable
service within a child-friendly setting.
Malcolm says he is constantly on the
lookout for the latest trends with environmental
awareness a dominant theme currently.
"There's a strong demand for re-useable
nappies and the use of natural fabrics such
as merino and bamboo.
"When we have kids, it's often a time to
start questioning our values and purchasing
behaviour. People are conscious of what's
happening to the environment, and that's
why there is a lot of demand for our organic
ranges."
While many retailers are finding trading
difficult, Milk's second store opened in
Merivale in July and once again Phillip and
Debbie advised on how to structure it.
Phillip says as the business expands, it
is important it remains sustainable with managed
growth and solid cashflow. "Strategic
development and business focus are keys,
and more businesses are appreciating and
engaging in these processes," he says.
Milk co-owners Malcolm Cleugh and Jenni
Saunders have been named as top retailers
in the Champion Canterbury awards.
Great backup for online retailers
A Christchurch company is at the forefront of the increasingly
popular online retail sector.
When people all over the world look to maximise their opportunities
and revenue from selling goods or services online on the likes of
Trade Me or blogs they tap into the training and business services
of DoubleDot Media.
From small beginnings in 2005, founders Simon Slade and Mark
Ling have seen their company mushroom. A growth rate of 250 per
cent last year earned them a spot on the Deloitte Fast 50 2008.
Simon says his own sales success on Trade Me inspired him to
set up the business. "I was importing goods from overseas and
people were constantly asking me where I found them."
Now SaleHoo, a directory of more than 650 international suppliers,
is one of the company's most popular websites.
Most of the programs are free but as users require more advanced
programs they buy the company's premium range. The customer base
has grown so much that 24 staff are now employed.
Simon says being able to use the expertise of Frank Burgess
and Bruce Allen from Polson Higgs' Christchurch office has been
perfect. "They help us look at the bigger picture, giving us advice
on things like reducing costs. And they put it in laymen's terms."
Simon says being named as a finalist in the Global Operator
category of the Champion Canterbury awards for the second year
in a row was great recognition for him and his staff.

What sort of lifestyle
can you afford in
retirement
Lifestyle planning for retirement has
taken on a new life at Polson Higgs
Wealth Management with the adoption
of new planning software known as True
North. The pre-retirement software
generates a large number of random views
of the future and is considered state-ofthe-art
in pre-retirement planning around
the world.
As each year passes we all get closer
to retirement and the savings message
starts to mean a lot more. It makes sense
to smooth our lifestyle out over the balance
of our life. The temptation is to live the
high life while our income is good and
throw ourselves on the generosity of the
government on retirement. But for most
people, living on around $12,400 a year
each, after tax, and sitting on a hospital
list waiting for basic health care isn't their
ideal lifestyle.
Polson Higgs Wealth Management
can advise on the issues around
retirement and help provide answers to
a wide-ranging set of questions:
> When do you expect to retire
> What sort of lifestyle do you want to
maintain
> Have you planned to work past age
65 Will you need to re-train
> What unexpected expenses might you
face in retirement (Expect the
unexpected)
> Where will you live
> What assets are you prepared to sell
to fund your retirement
> Is your business saleable and what
would it be worth in a difficult market
> What other liabilities do you have such
as debt, family expenses and the like
> Do you have any inheritances that you
can depend upon
> How much can you save
> Do you have a written pre-retirement
lifestyle plan
Pre-retirement planning is Polson Higgs
Wealth Management's core business with
the focus on sustaining one's lifestyle over
what is, hopefully, a long life.
Like any transition in life, things can
go wrong, especially around selling a
business or investing its proceeds, and
the sooner the planning begins, the
greater the chance of success.
By Rhodes Donald, CEO of Polson
Higgs Wealth Management.
Polson Higgs Wealth Management has
senior advisers in both Christchurch and
Dunedin specialising in pre-retirement
planning. Our disclosure statement is
available from our website www.ph.co.nz
or directly from the office.
To thrive or survive That
is the question...
2009 has not been the easiest of years for many New Zealand businesses. The
gloom and doom from sections of the media surrounding our well publicised "recession"
has only added fuel to the fire.
The team at Protocol Credit Bureau have spent a large part of our time educating
clients through a "Thrive or Survive" campaign. The aim is to help companies find a
balance between having a defined credit policy to ensure a healthy cash flow and
bringing in more business of a desirable nature.
Historically Protocol Credit Bureau has been viewed solely as a debt collection
agency. While this remains a core part of our business, it has been the educational
aspect of our services that has caught the eye of many organisations.
Internally Protocol has been busy helping our clients by writing and implementing
"tight" policies and procedures surrounding the extension, management and collection
aspects of the credit function. This ensures that businesses are only offering credit
after a legally binding contract has been agreed to, in writing.
Don't allow your organisation to become a victim of slow payers and bad debtors.
If you need help in establishing if your debtors are inappropriately using you as a bank,
then we will advise you about your industry norms and assess how your business is
performing against those.
A specific training programme has been developed to assist Accounts Payable/
Credit/Finance teams to deal with difficult debtor behaviours and structure their calls
effectively, keeping debtors on track towards a positive payment outcome, within
desired timeframes.
Externally Protocol has been asked to assist organisations' sales and marketing
teams through our Client Centred Selling approach. This tailored strategy arms
businesses with the tools to present winning proposals, overcome objections and win
new business. Protocol Credit Bureau can help organisations implement relevant,
proven business processes that will help ensure clients will thrive heading into 2010.
For more information phone Dene Bannister on 0800 729 722 or email
dene.bannister@protocolcredit.co.nz
Food for thought
Finance Minister Bill English spoke
recently to 200 Christchurch business
people about the Government's first year
in office, the global financial crisis and the
economic challenges and opportunities
that lie ahead for New Zealand.
He was talking at the annual Duncan
Cotterill business lunch held in support of
The Family Help Trust. Several Polson
Higgs staff attended the event, which
raised $15,000 for the Trust's work with
vulnerable children.

Passion for the land recognised
An accomplished chef, environmentalist and proven Charolais
stud breeder would not be the standard introduction for your average
farmer but it does describe the essence of Allan Roulston - a farmer
based in Hillend, South Otago - just north of Balclutha.
Having attended two years chef training through Otago
Polytechnic, Allan has gained the skills to tantalise the taste-buds
of many over the years. He is well-known for his delectable hors
d'oeuvres and his melt in your mouth pig on a spit - grown on his
own farm. Allan is also very generous in giving his time for cooking
demonstrations as fundraisers for local charities.
With Telford Rural Polytechnic just down the road, Allan has
opened his farm to many students to share his experience of farming
on the tops of Hillend. He is well respected for his contribution to
these students and has been invited onto the advisory panel for
the Polytechnic and is now Chairman.
His operations are diverse - he farms sheep, breeds pigs and
operates a Charolais stud on 400 hectares of rolling country.
However, he is better known for his passion for the environment
and his effort to create a sustainable environment.
Allan has a passion for silviculture and this has seen the planting
of 40 hectares of the property in a vast array of tree and plant
varieties to provide shelter for stock and as a source of farm income.
The farm is beautiful with many colour and fragrance themes
featuring in the hillsides and valleys of the property. Allan has also
focused on riparian plantings on the land surrounding his creeks
and streams which has seen the recovery of many natural ecological
environments - with the return of fresh water crayfish an obvious
sign that things are well on the way to recovery.
Allan is much admired by farm foresters for his enthusiasm for
experimenting with various varieties in the different climates that
the farm contains. This passion, combined with his effort to get the
best out of his land and stock, has earned him the NZFEA Trust
Award-winning farmer Allan Roulston, centre, with Sarah Middleton and
Tim Dunn from Polson Higgs at Allan's farm in South Otago.
Habitat Improvement Award and Hills Laboratories Harvest Award
at the 2009 Ballance Farm Environmental Awards.
Allan has worked with Tim Dunn and Sarah Middleton from Polson
Higgs over several years and has gained from a range of farm
accounting and structuring advice. He has also hosted the Polson
Higgs business services staff on a farm visit which is still being
talked about!
Tax changes affect associated
person rules
Amendments to tax legislation have resulted in major tax changes
which will impact on future property purchases by property developers
and dealers as well as builders starting construction, together with
associated entities.
These changes widen the tax base and are aimed at those who
are associated with people or entities in the business of building, or
dealing in, or developing land. The effect of this extended definition
greatly restricts the ability for a builder, developer or dealer to hold
property as a tax free capital investment in another entity. There will
now be many more taxpayers tainted by association, resulting in
investment properties acquired by them being subject to tax on profit
when sold.
If a taxpayer is associated with a property developer, dealer or
builder and disposes of their investment property within 10 years,
they may now be exposed to tax on any profit that might have been
considered a capital gain previously.
Note the following key points:
> Tax law changes will affect property transactions that have occurred
since 6 October 2009.
> In some circumstances, the changes will affect land which is
already held as a capital investment where improvements have
been made after that date.
> In most cases we believe that the existing structures you may
have are unlikely to provide adequate protection from the tax
consequences of these changes.
> The changes to the definition of associated persons are extremely
wide and it will become much more difficult to design an ownership
structure that prevents investment properties being tainted.
> You should take care when structuring property transactions and
seek advice before undertaking any property transaction.
To ensure you understand the impact of these changes in managing
your tax exposure, contact your Polson Higgs adviser to discuss
your situation.
Fellowships awarded
Polson Higgs is delighted to announce that the New Zealand
Institute of Chartered Accountants has awarded Fellowships to Ray
Polson and Michael Turner.
Fellowships are conferred on members of the Institute who have
demonstrated outstanding service to the accounting profession,
or to the community.
This year only 24 Fellowships were
awarded. Ray and Mike join the other
members of this exclusive group at Polson
Higgs: Stephen Higgs, Phil Broughton and
Graham Crombie.
Ray is a founding partner of Polson Higgs
and was the Chairman of the partnership
for 10 years. Over his long career, he has
specialised in the local government area.
In addition, Ray holds several high profile
directorships. He has also been involved
in the not for profit sector, particularly the
Shipwreck Relief Trust and the New Zealand Ray Polson
Land Search and Rescue.
Michael is responsible for the Polson Higgs
tax division. He has lectured at the University
of Otago on tax and run many national
courses on tax issues on behalf of the New
Zealand Institute of Chartered Accountants.
In addition he has been a member of the
NZICA tax committee, contributing to the
tax policy debate and liaising with the Inland
Revenue Department, Treasury and
Government. He is also a past Chair of the
Otago Branch of the New Zealand Institute
of Chartered Accountants, as well as a
current member of the Otago Branch
committee.
Michael Turner

Building towards a brighter future
By Phillip Roth - Polson Higgs Business Services
Few would doubt or even debate that
the majority of businesses in New Zealand
have this year come through arguably one
of the most challenging business cycles we
have experienced.
While words such as recession and "green
shoots" recovery have been bandied around
almost to the point of ad nauseam, most
pundits correctly identify that we are through
the worst of the economic downturn.
What we have identified in recent months
is that businesses and organisations that
have quickly adapted to their challenging
business environment and in many cases
made the tough decisions required of them,
have come through remarkably well. In many
other cases we have seen businesses in
fact increase their sales revenue and market
share on account of other market players
falling out of their industry.
Our view is that regardless of whether we
are in a recovery phase, there are many
proactive areas of business that will require
a rethink about the way we do business.
Bruce Sheppard of the Shareholders
Association was recently quoted as saying
"Real restructuring should be about doing
something fundamental to change your
business. It involves thinking about your
value proposition, understanding your value
proposition and delivering it in a way that a
customer will respond to with a 'wow'. Very
few are doing this." In addition, Alasdair
Thompson, CEO Employers & Manufacturers
Association also stated "If you reduce labour
costs to meet the reduced level of demand,
you can stay in business. You may not be
making a profit, but at least you're not
shutting down."
We believe the following check/action list
might be helpful in assisting you with some
of the decision criteria required in building
your business towards a brighter future:
Business Planner Checklist (Note - this list is not exhaustive)
Focus Area
1. Strategic focus and direction
2. Business operations plan
3. Cash flow and working
capital management
4. Key staffing and personnel
5. Management and key
leadership roles
6. Funding and financials
7. Customer focus and key
business relationships
8. Marketing and sales
programme
9. Business processes and
systems
10. Action implementation team
Potential
Consider reviewing current strategy and redrafting
future plans.
Plan well ahead for the next trading cycle with realistic
budgets and assumptions.
Ensure a robust and ideally fully integrated budget
forecast is planned and monitored.
Review current requirements and ensure capacity exists
to grow.
Review future requirements, competencies and role
specifications.
In conjunction with number 3 above ensure you have
fully reviewed adequacy and applicability of current
funding lines.
Review internal client Relationship Management
systems and link these to marketing initiatives
Ensure that both strategic and operational areas of
marketing investment will provide value for the business.
Conduct an effectiveness review of all elements of the
business ensuring quality outcomes and deliverables
against agreed expectations.
Consider pulling together a dedicated resource to
monitor and evaluate progress on items above.
DIRECTORY OF SERVICES
The services offered by our divisions include:
Business Services
Annual and periodic financial statements
Taxation compliance
Advice re business sale and purchase
Business and strategic planning
Business and company valuations
Financial forecasts
Software installation and support
Business structuring advice
Audit/Assurance
External and internal audit
Review engagements
Corporate governance reviews
Internal controls/procedures reviews
Risk management
Forensic assignments
Taxation
Tax compliance and planning reviews
FBT/GST/ACC warrants of fitness
IRD tax audits and binding rulings
Tax advice on mergers and acquisitions
International tax advice
Training
Information Technology
Software development
IT assurance/IT warrant of fitness
Strategic IT advisory service
PC and network support
Package selection services
Project management
Wealth Management
Investment management advice and solutions
Personal and business insurances and advice
Employee benefits, advice and solutions
Comprehensive financial plans
Business Consulting Group
Human Resources
Executive recruitment
Strategic remuneration advice
Performance management
Psychometric assessment
Organisation reviews
Marketing
Strategic marketing planning
Marketing budget development
Assisting with advertising and promotion
Marketing for business profitability and growth
Business Intelligence
Feasibility studies
Market research for small to medium
businesses
Policy analysis and evaluation
Survey research
Public opinion polling/organisational profiling
Training
Business Management skills
Taxation and technical topics
Accounting for non-accountants
Financial management skills
CONTACT DETAILS
Christchurch office
Partners: Frank Burgess, Taxation; Geoff Bolderston, Business Services;
Phillip Roth, Business Services, Consulting; Michael Rondel, Audit &
Assurance, Consulting; Noel Walton, Business Services; Frazer Weir,
Business Services.
Director: Rhodes Donald, Wealth Management.
Associate: Brian Clarke, Taxation.
Dunedin office
Partners: Stephen Higgs, Business Services; Graham Crombie, Audit
& Assurance, Consulting; Tim Dunn, Business Services; Phil Broughton,
Business Services, Training; Steve Dunbar, Business Services, Insolvency;
Michael Turner, Taxation; Henry van Dyk, Business Services.
Director: Rhodes Donald, Wealth Management.
Associate: Carole Greer, Audit & Assurance.
T 03 366 5282 F 03 366 4254 E info@ph.co.nz W www.ph.co.nz
T 03 477 9923 F 03 477 9795 E info@ph.co.nz W www.ph.co.nz