Weekly Digest â€“ 21 April 2021
Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.
New Zealand- Australia Travel Now Open
New Zealand and Australia started their first quarantine-free flights on Monday, after successfully keeping COVID-19 transmissions under control.
To fly under the travel bubble‘s rules, passengers must have spent 14 days before departure in either Australia or New Zealand. They must not be awaiting the results of a COVID-19 test, nor have any symptoms, amongst other criteria.
New Zealand relies on Australia for 40% of its international tourism, injecting about $2.7 billion into the economy. Meanwhile, Kiwis accounted for 1.3 million arrivals to Australia in 2019, contributing A$2.6 billion to the Australian economy.
NZ Startups Show Strong Growth Despite COVID-19
Startup investment has grown despite the challenges of COVID-19, according to a report from PwC and the Angel Association.
In 2020, investors provided more follow-on capital than before, with 56% ($109 million) of all investment being follow-on capital, which indicates strong commitment to support startups. More venture capital funds also chose to invest in startups, and now account for 45% of total startup investment.
These developments show that the startup ecosystem in New Zealand is not only resilient, but also becoming more mature.
Tourism Infrastructure Fund Now Open
Applications for the Tourism Infrastructure Fund are now open, especially in areas under pressure due to COVID-19.
Between $13 and $18 million will be available, and five South Island regions namely Kaikōura, MacKenzie District – Aoraki Mt Cook, Queenstown Lakes, Fiordland, and South Westland will be given priority.
Applications will close on 30 April at 5 pm. You can read more about it here.
Non-Bank Lenders Join Business Finance Guarantee Scheme
Business Finance Guarantee loans can help small and medium businesses access credit for cash flow, capital assets and projects related to, responding to, or recovering from the impacts of COVID-19.
If you borrow from a bank, it will determine the amount you can borrow and the length of the term up to a maximum of $5 million payable in five years. Meanwhile, if you borrow from a non-bank, the maximum amount is $3 million payable in five years. More information on eligibility criteria and how it works can be found here.
This loan scheme is now available to five non-deposit-taking lenders including these Financial Services Federation Members:
- UDC Finance Limited
- Prospa NZ Limited
- FlexiGroup (New Zealand) Limited
- Speirs Finance Group Ltd
Applications for Business Finance Guarantee loans are open until 30 June 2021. If you need help or have any questions, don’t hesitate to drop us a message.
Free Online Digital Training and Support Tool
The Ministry of Business, Innovation and Enterprise, in partnership with The Mind Lab and Indigo, has launched a free training and support services to help businesses develop their digital capabilities.
More than 9100 small businesses are already taking advantage of these solutions through DigitalBoost.co.nz. This includes providing support on cybersecurity and fraud prevention.
Meanwhile, if you want more focused software integration advice, you may also get in touch with us so we can assist you in getting the right tech in place.
Beware of COVID-Related Scams
CERT NZ (Computer Emergency Response Team) is once again seeing an increase in COVID-related scams as the vaccine rollout ramps up.
The scams involve getting a phone call advising the vaccine is available for $49.99 and requesting people to enter credit card details. Another scam asks people to go to a website where they can ‘vote’ to be eligible for a jab.
In the previous week, there were also reports of an email scam claiming to offer money for taking a survey on the Pfizer vaccine.
Keep in mind that the vaccine is free for all Kiwis. So if you receive requests for payment or financial information, you may report it here or call 0800 2378 69.
Short-term Absence Payment
This is available for businesses, including self-employed people, to help pay employees who cannot work from home while they wait at home for a COVID-19 test result. This is a one-off payment of $350. You can find the details here.
Leave Support Scheme
The Leave Support Scheme is available for businesses, including self-employed people, to help pay their workers who can’t work from home and meet certain health criteria, eg they have COVID-19 or are a ‘close contact’ who has been told to self-isolate for 14 days.
The Leave Support Scheme is paid as a 2-week lump sum per eligible employee.
The Leave Support Scheme is paid at a flat rate of:
- $585.80 a week for full-time workers who were working 20 hours or more a week
- $350 a week for part-time workers who were working less than 20 hours a week.
Find out more about the Leave Support Scheme here.
Small Business Cashflow Scheme Extended Until 2023
The Small Business Cashflow (loan) Scheme has been extended until 31 December 2023.
Organisations and small to medium businesses, including sole traders and the self-employed, may be eligible for a one-off loan with a term of 5 years if they have been adversely affected by COVID-19.
The maximum amount loaned is $10,000 plus $1,800 per full-time-equivalent employee. The annual interest rate will be 3% beginning from the date of the loan being provided. Interest will not be charged if the loan is fully paid back within 2 years.
You can find out more here, or simply get in touch with us so we can provide our professional assistance.
Kiwi Business Boost Tool
The Government has funded specialist consultancy support services to provide advice to businesses who need it. You can use the Kiwi Business Boost Tool to find out what services are available in your region.
The Treasury website’s COVID-19 Economic Response Measures can also provide more information on the range of supports available to businesses.
What Does It Take to Grow Profitably?
When you ask entrepreneurs what their business goals are, one of the most common answers will be something to do with growth. However, the real challenge is achieving both growth and profitability.
This Forbes article discussed how to grow profitably based on the model by Daniel Marcos of The Growth Institute. According to this model, different strategies are required depending on where a business is at in its development.
Startup stage (1-5 employees)– Focus on total revenue. Prove the business model and reach breakeven first. Learn who your more profitable customers are and build systems around delivering your products and services.
Grow up stage (6-15 employees)– Add the right revenue. Conduct an analysis of your gross profit to determine the customers you want to build processes around. It may be a difficult mind shift, but learn to say no to the customers that are not a good fit for your business.
Scale-up (16-100 employees)– Concentrate on the cash flow aspect of your business. Many companies grow too fast and flame out. So in order to not outrun your cash flow, you should know the cost of acquiring a new customer.
Ideally, you’d want the revenue generated by new customers to offset the cost of acquiring them. You want to have net cash flow from growth that you can fund through your operating profit.
Besides working on your cash flow, you must also continue refining the processes you started in earlier stages, growing your people, and adding talent with new skills that can help you in scaling up.
Need personalised business advice? Get in touch with us and tell us more about your business.
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Contact us if you have any questions or want to discuss the next steps for your business.