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We have 5 things a small business needs to do and know as they operate here in New Zealand:

  1. Don’t be afraid to pay tax : payment of tax is just a consequence of how much you earn. Paying tax is good, it means you are business is doing good. Other people will also trust your business, bank will lend you money, you can attract and retain good suppliers, employees and customers.  Your expansion becomes easier, you can get better tools for your business perhaps rent an office.
  2. Cost of sale is a trap for kiwi businesses- it is very important to understand, cost of sale concept. When you get $100 in your bank account, that is not your actual profit. You also need to account for material and labour cost. Ideally you should be making 40% gross margin. Now, this differs industry by industry. It means when you get $100 in your bank account (ex. GST) after paying supplier and labour you should have $40 left. I have seen multiple times people in building industry struggle to understand this concept.
  3. Your website is your full-time marketing staff- in this information age, your website is like a sales staff. This cannot be make it once and forget type of investment. You need to keep making regular changes in the website, your website is a tool to have first contact with your client. Try to make it responsive, so that it can do all initial work for your business. Quote, sales pitch, email communication, newsletter, regular updates are just few tips. Be creative.
  4. Cheaper pricing is fastest way to hell – running bargain, discount and promotion is ok, but if this is done solely to get new business, you may struggle financially. The research shows bargain hunters are not likely to do repeat business. Client generated by quality work and better services are going to stay with you for a long term.
  5. Don’t compete, create:  having competition is good in open economy. It provides choices to customer. But, you don’t need to complete purely on price. You need to be creative. When you are creative you grow faster and your business can sustain for a long term. So, focus on creating something new, better service, delivery, performance or perhaps something else.

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