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Did you see the last Kentucky Derby in the States?
WOW! It usually lives up to its billing as the most exciting two minutes in sports but this year it was off the charts.
As you may have already heard, 50-1 long shot Mine That Bird absolutely blew away the field. A horse, that was purchased for a mere US$9,500 and was racing against thoroughbreds valued at millions of dollars, is not supposed to win.
But win he did. Mine That Bird was dead last at the ¾ mile marker, in twelfth place at the mile marker, and by the time jockey Calvin Borel got him to the final straight he had flown by the field to take the lead and win by over six lengths.
Obviously I couldn't help but think of all the lessons we could take away from Calvin and Mine That Bird:
1. You don't have to be the biggest or the richest to compete but you do have to be in the race to win. Some of the horses that Mine That Bird beat were purchased as foals for over $3,000,000, are owned by very wealthy people and are trained by the most prominent and successful trainers in the business. Mine That Bird's trainer is an unknown out of New Mexico.
The lesson: While your competitors may have deeper pockets than you do, the one who executes the best will still win.
2. Seize the opportunity when it presents itself. One of the keys to Mine That Bird's victory was the ability to not only get to the inside rail, but to get through two openings between horses to get to the lead. Any hesitation by jockey Calvin Borel and Mine That Bird may well have been caught behind the pack, unable to break through.
The lesson: We are presented with opportunities every day but they'll pass us by if we're not a) looking for them and b) willing to act quickly and decisively to maximize them.
3. Pedigrees and experience are great but never underestimate hard work and a big heart. Mine That Bird came into the race as, the Boston Globe said, "An extra in a 19-horse race of stake winners owned by bluebloods." Jockey Calvin Borel is described by Sports Illustrated as ". . .not often thought of in the first flight of today's top riders even though he has over 4,000 victories and a Derby win in 2007."
The lesson: It reminded me that some of my best employees never went to college, or had no retail experience when I hired them. Don't look at what people don't have on the outside, but look what they have inside them. The same holds true about yourself.
4. Last but not least, believe in yourself. As Calvin was celebrating his victory while still atop Mine That Bird, he pointed toward his helmet and screamed, "It's all in your head."
The lesson: Think like a winner, believe you're a winner, and chances are you'll fly to victory just like Calvin Borel and Mine That Bird.
Remember this: People, horses, and companies are only long shots because someone wasn't smart enough to bet on them.
KiaOra, the Essential Guide to Central Rotorua
The Rotorua Chamber of Commerce is again publishing it very successful KiaOra Essential Guide to be released into the market at the beginning of October, in time for the start of the tourist season. The Chamber first published the guide, previously called The Map, eight years ago. Since then it has become an essential publication promoting the retail offering in the central business district.
Last year the format underwent considerable reformatting as it featured sections on different attractions in the city: restaurants, bars, high street shopping, Rotorua Central Mall, tourist attractions, and financial institutions and information centres.
It would appear that this is the first guide in New Zealand to feature main street shopping and big box retail alongside each other as a complementary attraction. The guide has been particularly popular with the Australian tourists coming into Rotorua on the direct Sydney to Rotorua flights.
Representatives from the Rotorua Chamber are currently contacting all of the advertisers in the 2009 edition to renew their advertising. Any retail business in the CBD can take either a line listing at $100 plus GST or a full colour block advertisement at $400 plus GST. The 2010 edition will feature a new section that will offer 24 discount or value-add coupons.
New retail outlets that would like to be featured in the 2010 edition should contact either Karen Heard or Denise Emery at the Rotorua Chamber of Commerce
Retain your valuable employees with education and up-skilling opportunities
The unique relationship between the Rotorua Chamber of Commerce and Waiariki Institute of Technology means Chamber members and their staff have the chance to up-skill at a much reduced rate.
For several years Waiariki has offered the Chamber special deals around business and computing courses. Now the range has become much wider and Chamber members and their staff can extend their skills and enhance their CVs in many directions.
Creative writing offers you the chance to stretch your literary legs around screen writing or technical scripts. You can try an introduction to sociology or psychology with the team of lecturers in social sciences. There are some excellent health and safety courses coming out of the School of Forestry and in the School of Business and Tourism, those who work in customer services or behind the scenes crunching numbers can raise their skill level with a wide range of courses on offer.
Waiariki timetables some of these courses in Semester 1 and some in Semester 2 which starts shortly. This is an excellent time to enquire.
The Waiariki-Chamber deal means that an unlimited number of employees from the same business who are fulltime staff members can take advantage of the offer. There is a part-time brochure available from Waiariki and this outlines the courses available from every School. Some run during the daytime, some in the evening, and there are also lecturer profiles so you can see the calibre of the Waiariki tutorial team.
If it has been a long time since you studied, do not be put off. Waiariki also offers courses for those who need to polish up their study skills. These make an excellent pre-cursor to specialised courses further down the line.
There are a couple of things to be aware of: this offer is good only for one course per employee and can be used only once per employee. Enrolment and study of the course must begin in Semester 1 or 2 in 2010 and a number of small additional fees still apply.
To get a copy of the booklet so you can phone 0800 924 274 or visit http://www.waiariki.ac.nz/
Annabel Schuler, Director
School of Computing, Technologies and Communication
Waiariki Institute of Technology
Budget 2010: Impacts on Businesses
On 20 May 2010 the Government announced the long-awaited budget. Much has been published and discussed since then, and the general consensus is that it was a good budget which should help to encourage more saving and direct investment more towards productive enterprise.
We have set out below some of the issues which we see as being of practical concern to local business operators and taxpayers.
Personal Tax Rates
All personal tax rates will reduce from 1 October 2010. This reduction will be between 5% and 7.5%, depending on individual income levels, and brings the top rate of taxation to the same level as Trusts, and closer to the Company tax rate. It is expected that the additional after-tax income over all levels of taxable income will more than offset the increase in GST, referred to below.
Company Tax Rate
The company tax rate will reduce to 28% from 1 April 2011, reducing the gap between the new company tax rate and the top personal tax rate to 5%. The reduced rate will lead to more companies re-investing tax-paid profits into the business to sustain future growth. There will be a 2 year transition period to allow tax paid at 30% to be imputed to dividends at a 30% rate from 1 October 2010. The top PIE rate will reduce to 28% from 1 October 2010, which should continue to make this type of investment attractive to taxpayers who are on higher taxation rates.
GST
GST will increase to 15% from 1 October 2010. It is expected that this will create a one-off spike in inflation of at least 2%. Businesses need to ensure that their accounting systems, IT systems and procedures are able to deal with the new GST rate. Other issues that should be given consideration by businesses are pricing, consumer demand prior to 1 October 2010 (stock and working capital), contracts spanning 1 October 2010, time of supply, credit notes and bad debts.
Depreciation Changes and the Impact on Property Investors
In an effort to change emphasis from investing in property, it is proposed to remove the depreciation claim on residential and commercial buildings from the commencement of the 2011/2012 income year. This change is to apply to buildings with an estimated useful life of 50 years or more, and we expect more debate and clarification of this definition over the next few months. There has been some comment that rents will increase as a result of these changes, but this would seem unlikely in the current market. Chattels and fit-out costs will still be depreciable, and it will be important to be able to classify such items in any future property transactions, to enable a clear separation from the definition of “buildings”. We still believe that people will find property investment attractive and it may become more of a domain for specialists. In simple terms the removal of a depreciation claim is a timing issue as in most cases such depreciation was ultimately recovered on sale and taxed accordingly at that stage.
Qualifying and Loss Attributing Qualifying Companies
With effect from commencement of the 2011/2012 income year there will be no distinction between Qualifying Companies (QCs) and Loss Attributing Qualifying Companies (LAQCs). QCs will have one class of share only, and will be included in the definition of Partnerships for taxation purposes, requiring the filing of an IR7 Partnership tax return instead of an IR4 Company return. This means that both profits and losses will flow through to shareholders according to their “effective interest” (voting interest, shareholding percentage, etc). Losses will only be able to be claimed to the extent of the shareholders’ investment in the QC. Excess losses will be carried forward and claimed as the investment in the company increases. It is anticipated that a significant number of companies will revoke their QC status if they expect to make profits. This would need to be actioned during the current year ending 31 March 2011, to avoid taxation issues arising under the proposed new rules regarding changes in QC status.
Trusts
The Trustee tax rate has not changed, and is now the same as the top personal tax rate, at 33%, which will simplify deciding whether to allocate Trust income to certain beneficiaries. Resident Withholding Tax must be deducted by companies paying dividends to Trustee shareholders, for the difference between the company tax paid and the Trustee tax rate, at the time the dividend is paid. This difference will rise from 3% to 5% once the new company tax rate of 28% has become established. In our opinion Trusts are still very desirable structures to use as part of an overall strategy of asset protection and wealth maximisation, depending on individual circumstances.
If you have any questions regarding the Budget announcements, or any of the above comments, please contact either your professional advisor, or Don Stewart, David Watt or Koren Wilson of Nairn Fisher Limited.
Using Social Media to Get Your Website Higher on Google
Having your website at the top of the search engine results for a particular term is a really good goal to have but it can be difficult to achieve, especially if your competition are also doing some advanced search engine optimisation (SEO).
Owning many results on the first page of search results is even better than just ranking at number one. Imagine if your website or the web pages that you control could fill almost the entire front page of search results for some search terms – that will give you great traffic…!
As more and more websites want to market their product effectively online it is also getting more and more difficult to add enough “search engine bait” to your product descriptions or web pages to be found in search engines.
Social media may be the answer you are looking for in two ways:
1) to help you get your main website listed higher on search engines
2) to increase the number of pages that you have listed near the top of search results.
Google (and more recently Bing) are now indexing many parts of social media that were not getting listed in search results until a short while ago.
Let’s look at some of the social media tools that are getting indexed and how you can use them for your business.
Twitter
The Twitter-stream is getting indexed – not quite in “real time” but with only a few hours delay by Google. The Twitter-stream is the content or the “tweets” that make up what people are saying using Twitter and other third party Twitter tools.
This will be increasingly important as more people are using iPhones and other smart-phone and mobile devices while they are away at a holiday destination such as Rotorua to find great places to eat or other neat things to see and do.
Ideally you would use Twitter to let people know how busy your bar or restaurant was so that people will want to come and join in the fun or so they will know that there is no waiting for tables.
You may use Twitter to showcase your weekly or daily specials or to promote “soft-dollar” discounts just to your followers. Soft-dollar discounts mean you give something away for less than retail – but the purchaser has to buy something first.
Remember to have a great Twitter profile that mentions your company name as well as some of the products or services that you provide.
Facebook
An agreement has been reached whereby Google will be able to index Business Pages within Facebook and Facebook also now have several ways to display your Facebook Business page content within your own web site. This means that the items that you or others post into your Facebook Business Page will soon be available as search results in Google.
As with Twitter you can offer specials to your loyal fans and post information about the benefits of using your products or services.
Blogs
Blogs are a great way to create search engine friendly content as Blog posts are typically about a particular topic and can link directly to the sub pages of your web site. Content can be created quickly and easily and the more often your update the Blog the more often the various search engine robots will visit the blog.
Other Sources of Links
There are several other social media platforms that you should be using to help promote your business. Video’s could be hosted on http://www.youtube.com/. Image galleries could be hosted on http://www.picasa.com/ or http://www.flickr.com/.
You own personal details could be included in http://www.linkedin.com/ with a Company Group as well as on community websites such as http://www.oldfriends.co.nz/
Having a company profile that mentions some of the benefits of your products or services in each of these social media tools will help in the results that you see from search engines.
If you want to view Twitter and other social media results when you do a Google search click the word “Social” on the left-hand side of the screen next to the search results. You will see recent Tweets by Twitter uses as well as links to other Social Media content such as Blogs or Forum comments.
Contact me if you’d like to know more about how social media can work for your business.
EC Websites
Chamber moves to electronic voting for Executive Board elections
Last year the members of the Rotorua Chamber adopted a new constitution. There were a number of rule changes that has brought the Chamber into the modern era. One of these changes is the move to electronic voting for the election of Executive Board members. This move was made to encourage greater participation in the election process of the governing members.
The Chamber has been fortunate to secure the support of electionz.com, an organisation specialising in web-based elections. Amongst their clients are government and non-government organisations. Some organisations in Rotorua are already using their services.
Prior to the AGM, the names of the candidates standing for the Executive will appear on an electionz.com website. Each member organisation of the Chamber will have one person with the authority to vote on behalf of the organisation. They will be given a unique personal identification number to permit them to vote through the electionz.com website. Each voter will have the opportunity to vote for up to eight candidates for the Executive.
The result of the election will be announced at the AGM.
The Rotorua Chamber of commerce acknowledges to support and contribution of electionz.com to make this new voting process possible.
NZ in Recovery Position
The recent tremors in global markets, as a result of Europe’s sovereign debt woes, come at an unfortunate time for New Zealand. All the ducks appear to be in a row for the domestic economy: activity has picked up and is ready to accelerate, with a more balanced mix of growth focused around the goods-producing sectors. But there is a nontrivial risk that the European situation, if mishandled by the authorities, could lead to renewed difficulties in accessing credit – a particular risk for a nation like New Zealand that relies heavily on overseas financing.
Europe aside, external conditions continue to work in New Zealand’s favour. Commodity prices have pushed on to new record highs, and export penetration into the fast-growing Asian markets (excluding Japan) is steadily increasing. We estimate that export volumes – which saw only a modest turndown as a result of the global financial crisis – increased by nearly 10% in the year to March, and that growth has been broad-based.
Dairy has been the star performer to date, exemplified by Fonterra’s initial payout forecast for the 2010/11 season of $6.90 to $7.10 per Kg of milk solids. This is 50c higher than for the latest season, and even on this initial estimate would be the second highest payout on record, following the $7.90 per Kg payout in 2008. Fonterra also noted that if world prices and the exchange rate hold around current levels for most of the season – a big if – the final payout could be well above $8.00 per Kg. As for volume growth, drought conditions are now easing, though in some cases replaced by heavy rain – not ideal growing conditions for the early part of the season, but the risks have diminished.
Business confidence, one of the most reliable short-term indicators of growth, remains on the up-and-up. Own-activity expectations are at their highest in 11 years, and employment and investment intentions are now at above-average levels. These readings are consistent with quarterly GDP growth accelerating into the range of 1% or more. Indeed, the recovery is now so well-established that even the labour market has convincingly turned the corner, with the unemployment rate falling from 7.1% in December 2009 to 6.0% in March 2010.
Against this backdrop, on 10 June 2010 the RBNZ took the widely anticipated step of beginning to remove some of the substantial monetary policy stimulus currently in place. The Official Cash Rate (OCR) was lifted by 0.25% to 2.75% and in the accompanying statement the RBNZ made it clear that this should be seen as the first step in an extended series of rate hikes. The RBNZ’s projection for 90-day interest rates implied that the cash rate will rise to 5.5 to 6.0% over the next few years. That’s not quite consistent with a 0.25% lift at every review date for the next couple of years – but it’s not far off.
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