Why NZ Import Businesses Fail and Tips How You Can Avoid It
Hello, my name is max today we, are gonna talk about white. Museums, important. Businesses, fail and tips how you, can avoid it and we're starting right now. Welcome. To the show of business owners how they brought to you by easy Freight dog hotel in tips. If. You want to learn more about other business, cakes then subscribe to this channel, and you can, ask me any additional, comments, down, in. The comments below our guest today is both. We're, who. Is a business, adviser who, is three years of, business, experience and he, has recently published, another book called white business, spell, and a journey through our direction. Of mind it was also featured in young Herald Radio New Zealand and other media websites today. You will learn why, this pumpkin. Patch limited, collapse how, did the leaders of the, popular companies, make decisions, that to get the breakdown of their businesses, and other. Practical, tips you, can implement, today but, would you like to add anything else, about yourself or your business now. Well thanks thanks it's great to be young. Have any business a long time but I based on recent months or, actually recent years so it's doing a lot of research on, trying. To expand on that with regard to understanding, a bit more about how to be successful in business but I came up from the angle of looking. At why businesses fail and so many of them fail and you still and see what we can learn from that so no, not much more rapid, up hurricane, never joke about what what, made, it to write, this book now boy are you I'm written a couple of other books like you're supposed to enjoy the process of researching, learning, information, and then sharing that so that's that process, I love doing but, I guess they have particular, interest from my advice, to other businesses, and running my own businesses, is that how. Could we do better at it but. I came from a different angle or rather yet, from being successful is well let's, learn for the people who wanted to got it very wrong and I, guess I started out with, a small amount of information but that just grew and grew as I did more and more research and, then ended up being another book. Me that triple used to produce so started out with a desire just to learn more about what, business again into so much trouble in New Zealand because too many do well, was there anything in, particular that, you, didn't expect, let you discover it well.
My Thing was when I started out I was sort of using, my business experience and training I guess I was looking at the, more traditional, things were growing too fast getting. Boring, too much money cash. Flow issues all those sort of things but, what I found the more I looked is there wasn't a lot of common, threads those, a whole lot of things happen but they weren't the same in all cases the. Only thing, that was the same was the person. Factor the human being involved and the, fact that these businesses, were, led by people who are owned by business that made some pretty strange, decisions. And that's what, led me on a path down the psychology, of hence the second part of the book title is, our irrational minds, so. That was a piece I wasn't expecting, but I promise better fair amount, of time looking at how we make decisions and, why we get so many of those decisions wrong, when. Even at the time we should have known better so, it journeyed off it was sort, of wants to study the human mind as much as they did about the business itself so that's the bit I wasn't expecting, what, was quite enjoyable all the same I. Croatian, from, one of our lines. He was asking, that. Some, social, media influences. And business advisors they say one. Of the best ways to get, new clients and make your business successful is, to get the girls, yes. Do. You have any any in, particular tactic. Or a specific is example, how do we get this referrals, because it's easier said than done isn't, it yeah well, there's no doubt throughout the, world the best marketing. Tool any business you need on the planet is. To get referred by a trusted source so if someone you know recommend. You use a business, or buy a product from someone you'll trust that over any other form of marketing so, that's what everyone's aiming to achieve is to get referrals probably. The most critical, thing getting referrals is when you do you do a really good job I always use the argument that the, best marketing, you can do is to do a great job every time you do it and have a great customer service and sell a product that's worthwhile and, useful and people want to do it because. That word spreads, so, it doesn't matter what marketing, you're using you can not doing a great job every time you won't get referrals because people want to say good things about you so that's, a very critical thing unfortunately. When you're started out in business where you're smaller you, can't, just a thought before it's relying the fools because I'm you, have enough customers so you have to do a lot of the proactive marketing but.
But Basically I, think there's no simple answer, this, one actually because we all battle and do if we've got a market ourselves as well we've, got to get networking, going so we're meeting with people and then, when we get a chance to do a job to, someone provide, a service producers, product self, like we've, got to do it really well because we don't do that the referrals, won't come but, what I define that. Business. Is about to cowboy evening, thank you though, most, of the time is the distance Adam. Is. Sort of actually jumping in there but it's something like this which I'm jumping in because it's. A very good question and it's one that comes up all the time minutes or something well first thing is is it very rarely is it son but ticking for the bigger businesses if you're in a small business things can go wrong a lot quicker because you're smaller you, don't have the cash to. Get out of a problem quicker and things can happen a lot quicker in small businesses, no doubt but, big father's I thought that they were coming for many years it, just people didn't take. Notice, of the signs and do something about it but, the sort of things you laught the theme that you'll see first in in business that's getting into trouble is issues, around cash now. They say cash is king and it's absolutely correct it's, usually not the cash that caused the problem something else is happening in the business to get into that situation but. It will be that you're starting your struggle to, pay the bills to manage, your tax, you've got creditors, chasing, you and you can't find the money to pay them now why that's happening is the challenge but as soon as you start to struggle with paying, the bills meeting. Your requirements, with the banks paying. Your creditors on time where, you've got the tax department, if, any that's starting to happen and, you don't know why you need to stop very quickly and, work it out because then that.
Starts And continue it will happen a lot quicker in small business and it's harder to get out of it in a small business so long way just look at the cash you know because, if you're struggling with that doesn't matter how good everything else is things can happen a little quicker than you like, well. I was reading your book I've noticed, one interesting. Statistics. You were saying that and, correct, me if I'm wrong that several. Percent, of the failed businesses, had a single director. Had, two family related directors, could be married couple, or family. Members, meaning nine. Million 90 percent of failed businesses, had a single director or around. By family and if. You put it into numbers out, of hundred businesses, this would be ninety, fails and ten, percent that, succeeded. In some kind of business partner, unrelated, yeah in, would. It be correct, to say that if, you have undulated. Business, partner, could be a mentor some other other. Business partner you're nine times, likely. To succeed, if you have a single, director for example yeah. I. Guess the piece of information is. A great insight into, obviously. Done your homework on the book which is great mates I guess, the. Statistic. For that what it shows me initiative, was a look at a thousand, business liquidations. Because, when I say failure I mean business that's gone broken gone into liquidation and, most, of those were small businesses with a single director, or a mum, and dad so it's, far more common, that a small business is likely to fail proportionately. To the big guys unfortunately, the big guys fail at, judo a lot more pain because they're digging there's a lot more money involved in people involved but. You're right is that those. Businesses are further small, and a lot of the times people are isolated they're on their own that I'm CEO and when, you're very emotionally, attached to things you often don't see what others will see so, this there's a another, key thing I found even before I wrote the book but it's certain if something confirmed its me that business. To me very lonely very, hard and, we don't know everything, these are overthinking business, now no, matter how experienced, we are we, just simply don't so. Having, people around you that can advise you is really important, one. Because it gives something another perspective and. If those people care about you they'll challenge you but I just said to be nice to they don't know people challenge, you and. When you do come to make those really big decisions, that could go wrong someone's there to sort of say we'll have you thought about this or um you know Bobby do you think that's the right thing to do it's not what you want I think, your, correlation, is quite an interesting one I think there's some real truth in that but I haven't sort of pulled out exactly, the statistics. Show that small businesses, are more likely to fail and they're usually families, and, mums and dads and, directors. On their own and you're, right if you're on your own you're going to be more likely to get into trouble so please always, seek help and don't, you never, speak it you know it all because none of us do so. Yeah screw inside very good inside Thanks we, have another question from Alex. He's. Asking, can, you see the question. How. Is the business owner, will. Any, reader, or, another, business owner benefit. In, your. Book. It's. Quite interesting to learn from the, mistakes of other people, in. Some ways it's a matter of interest we have as human beings we like to watch, other, people do things badly but. In saying that so this is quite interesting stories, just there's a lot of case studies in, there so certainly. The case studies my. Guess is that there's. A lot of information that I played together at the end of the book to say well if, you want to be successful, based, on learning from others mistakes these, are the things you should look to do so I've definitely summarized, everything towards, the end of the book but. But I guess a few other key messages, for me from the book is it's, not just about the basics of business it's about understanding yourself and understand, the. Limitations. We have as people and the mistakes we can make in the decisions, we make so. There's a lot of insight into out the limitations, our cognitive biases, as before the things the decisions, we make we don't even know why we make them or the things that are influencing, our decisions so.
That Will certainly provide. Some insight that I didn't expect to get on my side of the book that readers will get stop. And think about what. The biases, that we have towards when we meet people the biases, that we have about information, and how we interpret it the, biases, easiest within us so there's a lot of information there about, the. Psychology, of how businesspeople and human beings work so. You. Know I don't like to think I've written in a style as it's, accessible, to anyone you know I don't, think you need to be a business person to read and, a lot of these father's like pumpkin patch solid energy south Canon or quite high profile, and, a lot of stuff in the media some of which was true some of it was an incorrect as Norman happens it was a bit more factor, for mine what happened, so yeah two of those things off and quite interesting but the others so. Mod we discuss, reasons. Why. Businesses. Fail such, as cash cash, flow or. You don't have business. Mentor, or business adviser more, other things that can make you succeed what, other things you can do to make. It easier please yeah, well. Things like following you go into business sort of depends sometimes you're going to be businesses, that's one thing but I assume I'm talking that the people are in the small business side, of things the. First thing they're doing business you going to enjoy what you're doing because if you don't business. Is pretty tough and you. Get out you've got to get some reason to get out in the morning and enjoy it so you really got to pick something and if, you're finding that you just don't like it anymore, eventually, that lack of passion is gonna impact. On the financials, and the business itself because, you won't be put in the same effort in you'll. Get it is sloppy on things so you're, going to test but if you enjoy doing it because if you don't you in trouble, so you're gonna enjoy doing it and you're, going to get some meaning out of it because I'm just too hard not to do that so that's one thing is testing, you know is this really what I want to do and, if it is really what you want to do that's a good start then got to start to think about well that might be where I'm going to with my business why's it here what's what a much one would achieve out of this and start, to look a bit further into the future because. If you're not you just living from weekend a weekend to, wait a week and, before you know the years has gone past and you probably aren't getting where you want to go so you got to stop and look at the big picture and then, you start drilling down into the little things for. Example if you want to grow. Where, they want to grow what what risk so you appeared and paid so. I mean I've been going with one of these to speak you know on and on this there's a lot of aspects of it max like this was a good break it down into a few key areas if you like. Basically. Okay, so I guess that's, the person to have a clearer idea where you're going do you want to do it you're enjoying this the. Next thing is is that will say, for example you're a small business and you want to grow you want to get a lot bigger which. Is not, all businesses, want that but a lot do so I okay you want to get a lot bigger well, the things you need to get a bigger our staff and money and the. First thing you say do you like the employing people do you want yes I do I like that pool or if. You don't like it well you're probably going to struggle because you eat stuff so that's funny where you going to get them from the. Next people on its way to get money from because most Kiwi business, has done it enough cash there are undercapitalized and, the, only place you can get it from usually the bank so, are you prepared to borrow money if you are what, richest do you have to take and then. As in usually, you can borrow against your home if you do that are. You prepared for the risks of that because, if things go wrong you might lose your home but. A lot of us have to borrow against our home so then you start, to develop that out and then you start to look at your systems and processes, and then you look at in, my marketing, to the right people coming, back to your point before about some referrals, where am I going to get my business from because. I'm going to get in that business to pay that the debt often so, you start breaking you down into all aspects, of the business and. That was another key message, for me was, a lot of the time it's a lot of the little things you've got to do well it's. Not always is making, good decisions but also doing all the little stuff well you, know can day to day so. I mean there's. A lot better summarized in a small space of time next but some so, two key messages at that point and. If you've just joined us I'm talking, to both we have who is the business advisor with three, years of business experience and, if you want to do another, business.
Tips. And tricks then make sure you subscribe to our Channel baba it's, no secret to anyone that in. 2018. You, have to have digital presence, presence. Only, difference, for media yes, I think. That many, businesses, do not have a website like the. Last time I think 50% of New Zealand businesses don't have a website yeah. Why. Why, do people, justify. Why does why don't they do the basics. Yeah. This probably comes back to my point about the psychology, of us as human beings is that some, common. Sense and rational thinking would say you have to have one but sometimes we don't do the things that are good for us for some reason I guess. If I used to come from sort, of a slightly older generation, obviously and but. Even now when I first started advising other businesses, on purchasing our Sybil's you may not need a website you know this is probably seven or eight easier but. Now I say to everybody, you have to have an online presence if you don't even. If you don't sell online, or. You, someone people want to go and find out about you but a lot of times when, we're in Business Week we, either get stuck in our ways we get stubborn we, don't do enough research and. This comes a little bit back to us, as human beings making, not making the best decisions, I'm not getting the right advice because. I completely agree with investors you, know and we don't develop just met but I can't agree with a person more about you have to have an online presence in this world now and, that could be for any number of reasons you, know. But. You have to have an, online presence and it could be that you're selling online it. Could even just simply be when you meet someone they want to go somewhere and find out something about you and if you don't have a website where they're going to go because all of us are online looking, to find out so if I meet you for the first time I'll go LinkedIn, and see backgrounds I look at your website see what products you sell people, are going to go there so you have to have a strong presence there as a minimum and the, reason people don't have it is one. Note they think it's too expensive and they can't see the value from the money comes to money and most businesses lack cash so they'll always cut somewhere and unfortunate, sometimes it's not always the right place I think that's one place you shouldn't be cutting you should have some presence even a Facebook page there's. A minimum I'm. Still a believer website. You can get very very good website these days for not much so yeah, why do people do it because, I think we. Don't see the value in these things and we don't ask around without asking boss but, you need of your mind. There, are a lot of competitors, a lot of similar, companies like them so. If. You are, if Seyi would start an important, business and you would you, would want to import any widget or any product from a user Tunisian, and you've got another, 50 other competitors. Which are very similar what. The, first three, things you would do to stand out to me to, be competitive to get this market, is. The first thing if. You're starting out. You. Want to done, your homework I'm not sure this is three but I'll just give you general sort of some ideas you, really want to make sure that something that you're importing is it going to be a demand for it I mean there's not much point in forty or something when, there's no demand so you need to do some level of research. And that might not be a lot of detail they all start importing, it as a small level to assess. The markets, even some understanding, and, this is a bit of the risk if you weren't decided. On something they're imported four or five crates all that product without testing the market at all you, could be left with four or five crates of something that you can't sell so, I think the first step is to do some sort of testing of the mark and the market, I think, in every business whether, it's import or rather you have to be clear on there's a jargon but your point of difference what is different about you or your product, that's going to make someone interested, so you've got to be very clear on that so when you do go out start to sell up that it's very clear well what are you offering that the next guy is not offering is, a price is it a quality product is it's targeting. A specific market. And you've got access to something that others don't what is different about you because in the end all of us as consumers don't care about, the person selling it they only care about themselves and. What's in their benefit so tell me what benefits, me in buying your product and if you can't find a difference you're probably going to struggle between all the others the, danger with price is that if you're small a, price, battle.
Can End up lose, the small guys usually lose those battles so. You tend to find if you're a smaller importer, competing, with very big players you. Probably need something other than price unless, you've got access to something that very few others sale because I usually find the small people the small businesses, in a price family be the ones that lose because. We just can't support, you, know low margins, for too long so, yeah if you are looking at a price you need to make sure you can sustain it and then you really look at your market so let's go back to your points about online whether it's online marketing, direct. Engagement, with your signature distributors. Through. Retailers, that is how do you get your important, product to the end customer so. Much of this three or four five minute max, but it's you know the first, thing I think is summary make, sure before you make a commitment like that you're doing it a scale that you can test the market if you over commit invest, a lot of money what. If it doesn't sell can you answer that question if you said well, if I start small and test the market or. Then grow I can handle it make, sure you've got a very clear you want to be point of differences, and who you're selling to and what their needs are and then also the the route to market is it directly to customers which, is often more difficult or through other distribution, channels, you know retailers. And wholesale. Distributors, or someone else so, there are a few ideas of the cup we've. Given a mentor, and an advisor. It's what at what point do you have to start, thinking, about it is it like right from the beginning because, it's some of the services, are not cheap right because you're approaching, a. Person. With with. An experience, then. How. Do you decide what's the preferred process the business or not have to take to. Decide. Well. We're signing out I use, the same is fine point of the best advice you can afford and when you first start out you probably coming forward much so. But. This event there's are other, ways of getting good advice without, having to spend any money for example you're just starting out on your own during, the chambers of commerce that might cost you a couple hundred bucks a year join, some networking groups because. Then you've got to surround yourself with like-minded people. Who you can get advice from just, from their experiences, so that you can get advice through those sort of channels as a starting, point if, you know people in business community that are personal friends or family, also tap into that sort of knowledge is when, you're citing me I've got a lot of money just make sure they're not they're not just nice people that you know they're talking about because, sometimes people can tell you nice things I don't help you but the stage with which you need to probably step up to that is pony getting bigger and obvious a lot when you can afford it because yes. You're right so advice, can't be costly and it may be different advice at different times for example when you you probably. Need other every business needs an accountant of some sort some accounts are very good at offering additional advice some accountants are just good attacks and the basics, so, your accountants, might be a source of advice, early. On you. May need some legal advice to chase that so the, advice you get may depend on the stage the businesses, that getting, a sort of more formal mentoring, relationship. Like I found myself because I do do a lot of help for small guys are starting out but I tend to finally do that it's just over a free coffee to single people out the. Most often times I get people is when, there's slightly bigger they might have a few staff members there. Are more stable business, and they've got a regular cash flow coming in and they, have ongoing, issues, or they're in the middle that changing. Their business they want to grow they're in trouble or they're just decided, never want some support but you usually find it as at least some basic level of capital, cash, behind you to be able to get some ongoing, advice but, you know what I want to talk about prices, from my point of view but there are some pretty good people out there that don't cost you two mounts but you need to shop around as well so. I think this advice out there all stages just try and find the right best advice you can afford oh I, would agree with you that one, of the best ways.
To Get advice is to use websites. Like Nita they've got. You. Can join or. You can. Find, some groups on Facebook, that. Are. If. People, want to learn, more about you, and your. Services, how. Can they find you mom yo wassup, anything well, be talking. About websites I didn't have one but I do I have a website called pinpoint. Business so pinpoint. Business Carolyn. Said yeah books, on a separate website. If you want to buy it or look at this. Why. Businesses viable code instead and. Just the stuff you're doing now matches this is another place people can go to the sort of things you are doing is great you're getting you know so, there's a lot of really high-quality free. Advice out there as well for small business owners to help them as well so, all these things go together to help them so yeah check out our website we've got some stuff there check out what you guys are doing on Facebook. And that all helps us and. It doesn't cost anything so. I know, you have these new man book thanks. A, lot for your advice and. Look. Forward to reading, maybe another book. Really. Appreciate it so I mention I think you guys are doing a fantastic job, open, businesses up so keep doing it please thanks, for the feedback okay. All, this.