2013 Q1 BCS

Media Release: For Immediate Release Media Release: Business confidence in Northern region soars A business confidence survey undertaken by the Chambers of Commerce in the Northern region, extending from Northland to Taupo but excluding Auckland, shows one of the most significant lifts in business confidence that region has seen in the last decade. There has been a shift from those firms which have either expected the economy to deteriorate over the previous six months or deliver more of the same to a large percentage of those surveyed expecting the economy to improve over the next six months. Northern regional confidence Aug 12 Nov 12 Feb 13 Improve 30% 29% 48% Same 56% 53% 46% Deteriorate 14% 18% 5% Business owners responding to the survey also had a very positive view of the economy over the next six months with over 60% expecting the economy to improve up from 47% in November 2012 and 49% in August 2012. A rising concern for those looking to expand their businesses is the fact that 25% of those surveyed are having difficulty finding the right people with the right skills. Chamber spokesperson Tony Collins CEO NZ Chambers of Commerce Northland, suggested that this skill shortage would stifle growth. “Every effort should be made to invest in training and alert the Chamber of specific skill shortages so it can work with Government agencies to mitigate skill shortages,” he said. The survey also found: • Employment expectations are up • Hours to be worked up • Profitability expectations up “I believe the continued good fortunes of the agriculture sector have helped people’s confidence, a focus away from the issues on Europe and onto the massive opportunities in the Asian markets – and a good summer,” said Mr Collins. ENDS Summary of survey results attached For more information, please contact: Tony Collins | CEO | NZ Chambers of Commerce Northland 027 444 1010 | ceo@northchamber.co.nz Attached: Full results of Northern Regional Business Confidence Survey Northern regional confidence Aug 12 Nov 12 Feb 13 Improve 30% 29% 48% Same 56% 53% 46% Deteriorate 14% 18% 5% Personal Business Outlook Aug 12 Nov 12 Feb 13 Improve 49% 47% 60% Same 41% 42% 33% Deteriorate 10% 10% 8% Skilled Employment Aug 12 Nov 12 Feb 13 Easier 11% 10% 8% Same 43% 42% 46% Harder 24% 23% 25% N/A 23% 25% 21% Unskilled Employment Aug 12 Nov 12 Feb 13 Easier 20% 18% 18% Same 38% 35% 46% Harder 5% 5% 4% N/A 38% 42% 32% Most limiting Business Factor Aug 12 Nov 12 Feb 13 Capacity 10% 9% Demand 50% 51% Finance 24% 22% Supplies 2% 2% Labour 5% 6% Other 9% 10% Number of Full Time Employees changes in next three months Nov 12 Feb 13 Up 14% 20% Same 71% 67% Down 7% 6% N/A 9% 7% Total hours worked in next three months Nov 12 Feb 13 Up 30% 40% Same 55% 50% Down 12% 9% N/A 2% 0 Expected profitability for next three months Nov 12 Feb 13 Up 25% 35% Same 47% 46% Down 26% 15% N/A 2% 4%

BUSINESS ADVOCATE COLUMN NOVEMBER 2012

The recent Westpac Northland Business Excellence Awards was an opportunity to showcase some of Northland’s more successful businesses. Obviously there is a criterion around which these businesses were measured and on this occasion it used was the Baldrige Criteria. This is a relatively common business excellence measurement tool and one that looks across a broad range of performance areas and then seeks confirmation of this through a number of indicators. While this provides a very useful measurement of a business’s performance it may not necessarily be as useful for measuring success. That is unless it is rigorously applied against the vision and strategic plan of the business owner and that there is an acceptance from the evaluator that not all business owners have the same vision as to what success is. Success cannot be measured without a business first having set clear goals and unlike many large corporates, the nature of Northland businesses mean that many of these goals are going to closely aligned to the personal aspirations of the people and families who own these businesses. For many business owners, their personal goals and their business goals will need to be considered together as each will influence the other. Having asked where the business owner wants to be in their personal life at some date in the future will inform them as to what goals they need to set within their business if they are to get there. It could be argued that while it is valid to assess a business’s performance against its economic bottom-line and the systems and processes it uses, an enterprise may be successful in spite of these indicators if the owner’s goals are being achieved. It is the individual business owner who has made the investment, taken the risk and has an expectation of some reward. The personal nature of these aspirations and associated rewards means that it is not appropriate to judge whether they are right or wrong although there may be opportunity to question how practical or achievable they are. The attractive nature of the owner’s aspiration and their future desire is what energises and motivates them to take action. It gives a reference point against which they can focus, adopt innovative ideas and develop a level of resilience that is so important. Of course having set your goals, using good businesses practices as advocated within the Baldrige Criteria or other business excellence frameworks will make those goals more attainable. Although relatively high profile, the gala evening and announcing of winners is a very small part of the overall entrant experience. For most of the entrants it is the culmination of all they have learnt and practiced in their business life to date. Often they would have planned to enter for well over a year and in many cases they may have been considering entry for many years but were waiting for their business to be ready to enter. In truth, most businesses a constantly changing and developing to meet the challenges of a dynamic economy and market which demands that businesses innovate and evolve or else fail. The time critical nature of the entry process and the prescriptive framework used to evaluate the entrant business demands the business leader to rigorously examine how they do business and to consider whether their results confirm they are doing things the right way to ensure business success. We are always incredibly grateful to our sponsors of which there are many who contribute in a wide variety of ways to this event. It is a massive understatement to say we could not hold this event without their support because the reality is over the last three decades it is the unfailing support of these people who allow us to showcase the best in Northland business. In particular it is gratifying to see how focussed these supporters are on ensuring that the event spotlight remains on the entrants first and foremost. As always the event is a work in progress with minor refinements being made year to year to ensure continuity while at the same time ensuring we can respond to feedback to improve the process of entering and the entrant experience. Along with this is the need to ensure that all entrant businesses can use the process to examine how they do business and develop robust and sustainable enterprises.

ADVOCATE COLUMN 4th WEEK DECEMBER 2012

In my last contribution to the Northern Advocate for 2012 and I would like to take this opportunity to thank all the people in Northland who have supported the Chamber this year. We are a membership organisation and a vast majority of our revenue is directly attributed to membership subscriptions, sponsorship and sales. We have been fortunate to have a loyal membership which has grown albeit slightly over the last 24 months. Given the difficulties many Northland businesses have experienced I would like to think this growth and loyalty is due to the relevance the Chamber has to them and the opportunities that it can provide for business development. It always amazes me how positive and aspirational many of our members are and how passionate they are about their various enterprises. This year we have been heavily involved with a number of projects that assist Northland business. In particular, the Northland Business Grow team, Business Mentors New Zealand and the Pathway for Parents programme. These focus on improving or strengthening both business and workforce capability. Looking at New Zealand’s economic and business profile, an overwhelming majority (97 percent) of businesses is small to medium sized enterprises yet they account for only about 40% of our economic output. These projects are intended to improve the productivity of Northland businesses to the benefit of all our communities. Our membership base reflects our regional profile with a majority of our members being small or medium enterprises. The nature of these businesses mean they are often by necessity, forced to focus on the day-to-day running of their operations and often with very limited resources. Chamber membership can assist with the challenges they face. We have also been fortunate to receive support and membership from some of Northland’s larger businesses and their desire to be good corporate citizens is to be congratulated. Their membership provides support and networking opportunities to many of our smaller business members which is deeply appreciated. Finally, many of our members have told us that one of the roles we fulfil for them that they value is to provide them with a voice through the advocacy work we undertake. I would like to thank the support we continue to receive through our relationship with various Northland media organisations such as the Northern Advocate and Media Works. We are extremely grateful for them continuing to allow us the opportunity to use their resources to raise issues that are of interest or concern to our members.

ADVOCATE COLUMN 4th WEEK NOVEMBER 2012

Businesses are only as successful as their owners and managers. They operate in a dynamic, changing environment that requires the business leader to constantly and deliberately build on their management capabilities. These capabilities could include among other things, marketing strategies, finance, business systems or governance. Often a lack of business capability is something that is limiting our region’s economic growth. If in general terms there are two parts to a business with one being what your business does and the other being how you do it then the “what you do” part is the business capability. The how you do it part would fall within business excellence models such as those used measure business performance such as the Baldrige criteria. It is about adding value to the customer and it starts with a customers need and finishes with the fulfilment of that need. The business capability aspect is much more interesting and to most of us it is often harder to identify or articulate. It encompasses what a business must know and be able to do so that the organisations goals can be achieved. There is a raft of literature available on the subject and much of it is built around its own language and jargon which can be confusing and overly academic for the average business person. What matters are that good processes and efficient use of resources accompanied by an increased ability and knowledge that leads to a more effective organisation. This in turn means a better chance of that organisation achieving its goals. The good news is that NZTE through its Regional Business Partner Programmes that it has in place throughout New Zealand can help businesses to grow their capability. In Northland this role is undertaken by the Northland Business Grow Team. At no cost to a business they will assess your business and its capability needs and then prepare a development plan for you and provide advice, information and business assistance. Having done this the can then direct you to relevant resources and services to help to help fulfil this need and you grow your business, including providing links, contacts and referrals to other government and private sector business assistance programmes. Finally through government support for this programme in many cases they can partially subsidised training and coaching services may be available and can be accessed through a voucher system. With their support many Northland businesses are now better placed to achieve their strategic objectives through increase capability.

ADVOCATE COLUMN 2nd WEEK NOVEMBER 2012

Most of us would like to be successful at whatever we chose to pursue particularly if it is something that we are passionate about or that has a negative financial impact if it were to fail. In fact one of New Zealand Chambers of Commerce Northland strategic objectives is based around enabling business success. The difficulty comes in defining what constitutes success. Obviously there are some performance indicators and results that will show a business is or is not financially viable and any business still operating after the difficult times of the last two years has achieved a level of success. Then there is the purely analytical perspective based on the potential of the concern and whether or not, given external influences it is performing to its full potential or is it through underperformance failing to achieve the maximum return on investment. Once again this is going to be a result of the business processes in place, the overall level of business excellence being practiced and the level of capability of the owner and workforce. Measuring success on these criteria is relatively straightforward as it a combination of evidence based behaviour confirmed by measurable results. However the human factor is still missing from the equation. It is the individual business owner who has made the investment, taken the risk and has an expectation of some reward. The attractive nature of the owner’s aspiration and their future desire is what energises and motivates them to take action. It gives a reference point against which they can focus, adopt innovative ideas and develop a level of resilience that is so important. Success cannot be measured without a business first having set clear goals and unlike many large corporates, the nature of Northland businesses mean that many of these goals are going to closely aligned to the personal aspirations of the people and families who own these businesses. For many business owners, their personal goals and their business goals will be inextricably linked. Having asked where the business owner wants to be in their personal life at some date in the future will inform them as to what their business objectives will be. For this reason even if business is financially underperforming and there is room for improvement with its systems and processes, it may still be a success if the owner’s goals are being achieved. Of course having set your goals, using good businesses practices improves the chance of success.

ADVOCATE COLUMN 2nd WEEK DECEMBER 2012

As some people are beginning to wind down for the holiday season and possibly some time away from business many we use this time -if they are fortunate enough not to have to work through the holidays- as a time for reflection. They will consider what they have achieved over the last 12 months and where they want to be in the future. Out of this reflection some may decide to embark on a new endeavour and possibly to follow some long-held desire to start their own business. International research has shown that failure rate among start-up business can be very high. One report I read recently suggested that only one in twelve start-ups succeed in the long term. People intending to start their own business should ensure that their decision is as well informed and objective as possible and that they have done everything prior to starting to ensure they have a high chance of success. There will be many reasons why someone wishes to start their own business yet whatever their motivation they will experience very similar challenges in doing so. They will need to critically examine the venture before investing too much time and money and ask themselves some serious questions. Putting aside questions such as where the money is going to come from or whether everyone involved in the business has a shared vision or whether they have the shared capability for the venture to succeed, the important question is what you are selling. There must be a reason why the market wants your product or service. That is, what is the value proposition for the customer is and where will the customers be found. It does not matter how fantastic you think something is, if others do not share your view or feel that the return they will receive for their investment is sufficient, then there will be no demand. Without clearly establishing these two points the start-up will struggle to identify the best business model to sell whatever it is they are selling and how they will create a demand for it. There will be risk involved and this in general will correlate with the potential rewards. There are many agencies to assist start-up businesses and those people who have done their planning in advance, established a value proposition and are prepared to listen and ask questions can reduce the risks considerably.

ADVOCATE COLUMN 4th WEEK OCTOBER 2012

In October this year I attended the New Zealand Chambers of Commerce Conference along with about 30 other chambers from throughout the country. Generally I have reservations about attending conferences and some conferences I have attended for various organisations in the past have been of limited benefit and have not added a whole lot of value to the organisations involved. On this occasion there were both good things and some things that were not quite so good. This is not a criticism of those involved in organising the event as they were a small Chamber with not full-time employees and the event was organised in a faultless manner, it ran smoothly and showcased their district in the best possible light. The challenge generally is the content of the event and who delivers it. We did have some great speakers who were well known at a national and international level. I suppose my main concern about these events is that they will be their very nature be quite formulaic and will invariably include someone providing what is intended to be an inspirational presentation on leadership or some similar topic. I have no problem with the topic and leaving a conference inspired and invigorated is obviously a key objective. What surprises me however is how often the person delivering the address on these subjects is a sportsperson. In some ways it is a reflection of the role sport plays in our society but at times it would be good to seek inspiration from other sectors of our communities whose endeavours equally deserve recognition. On a more positive note it was amazing to the see the combined strength that the network of various Chambers of Commerce from throughout New Zealand provides our Chamber through shared resources and member benefits. This national profile also means that we are offered fantastic savings for our members through relationships with national companies that we as an individual Chamber would not normally have access to. Within the Northern Hub alone there are eleven chambers that meet on a regular basis and allow us as a small regional chamber to deliver services that would otherwise be well beyond our own individual capacity. This same network also gives us a national voice. It allows NZ Chambers of Commerce Northland to advocate for our members at a national level with central government on matters that affect their businesses. We are certainly stronger for these relationships and conferences provide an opportunity to recognise this and strengthen these relationships further.

LEADER COLUMN JANUARY 2013

LEADER COLUMN JANUARY 2013 There’s no doubt that event tourism is great for Whangarei and Northland. This month we have seen a number of sporting and cultural events that have added to the vibrancy of the town and provided a positive show case for the region. These events help grow our regional economy and cater to all sectors of our community. They allow our businesses, sports people and artists to showcase themselves on a national or international stage. In a very short time we will know if Whangarei District Council has been successful in their bid to have Whangarei city be one of New Zealand’s host venues for the 2015 Fifa Under-20 World Cup. Being broadcast across 200 countries with a potential audience of 500 million people this is a very significant event. There is stiff competition from 8 other New Zealand towns vying for the honour of being a host city and the opportunities that hosting such an event presents. This is a truly international event that would put Whangarei, its environment, tourism infrastructure and sense of place on the world stage. It is also an affirmation of what was stated leading into the Rugby World Cup 2012 by many commentators that to be truly successful a major event needs to leave a legacy that extends past the short-term gains that evaporate as soon as the visitors leave for home. In hosting games during RWC2011 Whangarei was given the opportunity to show that our district and Northland as a whole are capable and have the capacity to host international events. It also acted as an impetus for the completion of a number of minor civic projects that greatly improved the amenity of many of our local communities. When Whangarei hosts any such event -whether it be national or international- the attending participants and their supporters make a significant contribution to our economy. They discover more about our region, our people and our culture. They see the real New Zealand. These visitors promote us to the wider world and when they return to their hometown or country they can spread the word about travelling here. There is always going to be a slight disconnect between investing in tourism or event infrastructure and the existing demand for it. The legacy of this investment and these events cannot be understated as it creates a reputation local people can be proud of and facilities which benefit future communities.

LEADER COLUMN NOVEMBER 2012

It could be said that all business is a competition between various enterprises competing with each other to give the customer better a service or product for their money. Their main function is to be efficient producers of goods and services responding to market demands. Business assists in the provision of an economic environment that allows us to live and work where we chose. Many businesses support a wide range of community and not for profit initiatives. Often their endeavours go unrecognised and although they do not expect any recognition; sometimes we should take time to celebrate the contribution of Northland’s business owners. I would like to take this opportunity to thank all those who were involved in this year’s Westpac Northland Business Excellence Awards which culminated with the award’s gala evening on the 26th October. The Awards provides an opportunity to celebrate business excellence and the role it plays in our community. Through business, countless individuals can apply their talents to achieve their own aspirations and to provide service for others. If we can celebrate and respect these people, and foster a better understanding of the contribution business makes to the wider community, then this will go a long way to inspiring others pursue their own aspirations. It is amazing to see how much passion the entrants have for their business and the products or services they provide. Embarking on a business venture can be daunting enough but to place your business under the scrutiny of a panel of judges to be measured against asset criteria requires a special sort of person. As always these events rely heavily on the contribution of sponsors who assist in various ways to make them a success. This year’s event received special support from Warwick Bell and the team at Palmers Canvas and Fabric Structure Systems who kindly provided a venue for the gala evening. The lack of suitable venues for large events continues to be a concern for our region because without such infrastructure Whangarei will always struggle to fulfil its potential to host a variety of events and conventions. The generosity of Warwick et al on this occasion was deeply appreciated. New Zealand Chambers of Commerce Northland is fortunate to have the support of many local and national businesses without whom organising an event of this scale would not be possible. Through their support they are real champions of Northland business.

LEADER COLUMN DECEMBER 2012

It does not seem like it is over 12 months since last year’s Rugby World Cup and the lift that provided us towards the end of last year both in terms of the local economy and our reputation as a destination. Without wish to sound like a broken record it has been another tough year and many Northlanders’ continue to struggle. Many businesses still find the lack of demand and skilled works present challenges to their growth. We have a relatively small population and a comparatively low regional GDP but both our population and economy will grow in the future but this growth is likely to be slow and consumers are likely to remain cautious. The good news is that there has been growth albeit small and many businesses are more positive today about the future of their businesses than they were 24 months ago. It is easy to identify the negatives but at the same time there have been some positive news this year and if we are to go into the New Year with a balanced perspective we should not ignore some things that have benefited our communities in the last 12 months. There is not room to mention them all but here are a couple worth noting. Broadband and Rural Broadband roll-outs are well underway and Northlanders will be the first to benefit from the opportunities this provides and a potential 2 to 3 year competitive advantage over the rest of the country. Also the council have identified many key infrastructure and sense of place projects that provide some clear direction as to where they see Whangarei in the near future. This gives some certainty over how Whangarei should look and feel which can be used by businesspeople in making investment decisions. Infrastructure projects well underway mean some perennial issues of wastewater, sewage and roading will be less of a concern and future generations will inherit a going concern of infrastructure with a replacement cost well in excess of the debt incurred to build it. More importantly I have noticed an increased level of collaboration than had existed in the past among various agencies and organisations. With the limited level of resources that exist in Whangarei and Northland, the sharing of skills and knowledge and working together towards shared aspirations makes so much sense. If this continues then I imagine in 12 months time we will have more things to celebrate that benefit our communities.