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K’Road disruption a warning to small businesses everywhere

K’Road disruption a warning to small businesses everywhere

The current hurt experienced by small businesses in Karangahape Road – as council enhancements of one of Auckland’s iconic streets gets underway – is a timely reminder to all New Zealand businesses to expect, plan and prepare for disruption because it comes to every business.

Vinay Iswar , Partner Accounting and Advisory at Auckland-based accounting and business advisory firm OneHQ – a firm which has clients in K’Road – says that while many local businesses may be aggrieved because they feel they only had two months’ notice of works, in reality many of those businesses have only themselves to blame.

“Don’t expect councils, governments, customers, banks and anybody else to do you any favours. When you are in business, you are on your own. It is quite literally like being in command of a sailing vessel, there will be rough weather ahead.

“The truth is that Auckland Transport and the K’Road business association have gone to extraordinary lengths to ease some of the pain, and I really want to encourage business owners to take advantage of the help that is available – including the offer of free business mentoring for 12 months,” says Iswar.

The fact that not all businesses are affected at once because work will progress in incremental blocks of three months along the length of the K’Road for the duration of the project, gives those not yet impacted time to prepare.

The season, or time of year when a business is disrupted will be significant because the majority of businesses in K’Road are retail – clothing and craft stores, take-aways, restaurants and cafes – which depend on seasonal buying patterns.

“Part of the problem is that business owners don’t know the options are available to them, so they may be tempted to throw up their arms and quit the business just when better times are ahead of them.

“Cycleways, landscaping and other features are going to make K’Road an even better destination, which means more business for the majority of retailers in the area.”

Iswar says four strategies available to small business owners facing disruption are:

1. Taking out unsecured finance to help weather the storm
2. Using a business advisor or expert to help navigate through
3. Contacting your insurance company to find out if you qualify for business disruption insurance
4. Using the downtime to train staff or renovate

“Funding, particularly unsecured loans, is not easy to obtain. On the flipside there are options, particularly because short term borrowing would be best. Funding yourself to pay salaries and rent through the down period is better than shutting down.

“Bear in mind that improvements to K’Road will contribute to an increase in business, so this is a good time to borrow and prepare for growth. You may even be able to extend your overdraft at the bank.”

Iswar says that while some small business owners fear borrowing, they should question just how serious they are about being in business because borrowing for growth is a key business strategy.

“Get expert advice, draw up a good business plan and a cashflow forecast and take that to the bank. Give financiers a plan for growth – even consider renovations that you might not be able to do when times are busy – and you’ll get the support you need.

“Surround yourself with support; a mentor, your accountant, a coach, your banker – all of these people can help you manage through,” says Iswar.

Another option is to approach your insurance company to determine if you are covered for business disruption insurance, but they may want material evidence of disruption and may also only pay out after the fact.

“The council works in K’Road, as is often the case when businesses are disrupted, are beyond small business owners’ control, so they can take back some of that control by making an active choice to take action and doing something that makes the best of a bad situation,” says Iswar.

For more information: http://nexgen.nz/

Ends.

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