Would Leasing or Owning Company Vehicles be Best for Your Business?

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Whether a business is new or long-established, it’s necessary to decide whether it would be better to lease company vehicles or buy them outright with a business vehicle loan. The answer may not be the same in all cases. Most companies, however, establish a policy that dictates whether lease or purchase is generally preferred.

Leasing Company Vehicles

There are three types of lease arrangements.

Operating leases normally run for 36 months. The anticipated mileage is stipulated at the beginning of the lease and there is no right of ownership when the lease ends.

Finance or lease-to-buys typically last 46 months and include an option to purchase the vehicle at that time. There’s no requirement to stipulate mileage or be penalized for excess mileage.

Sale and leaseback allows a business to sell their vehicles to the leasing company and lease them back. This removes assets from the balance sheet and converts them to operating capital.

Pros of Leasing
A fully tax-deductible operating expense
Eligible for fringe benefit and personal use deductions
Monthly fee usually covers insurance and maintenance expenses
Fixed monthly cost is budget-friendly
Upgrade or purchase vehicle at end of lease
Avoid using capital for an asset that depreciates 50% in 3 years

Cons of Leasing
No equity
Expensive penalties for excess mileage
Leasing charges are permanent costs since vehicles are never owned
Vehicle costs are higher than if paid for up-front
Maintenance is at discretion of leasing company and can be delayed or not covered

Buying Company Vehicles

Buying a vehicle with a commercial vehicle loan is more cost-effective in the long run. When the business vehicle loan is repaid, the vehicle is owned outright.

Pros of Buying
Fixed finance cost until paid off and then expense is eliminated
Best for those who don’t need a new vehicle every three years and who drive a lot
Vehicle can be customised
Outright ownership is a plus
Maintenance is performed where and when desired
Have equity so can sell when wanted
Buy the desired vehicle. Not limited to the leasing company’s inventory

Cons of Buying
Maintenance costs aren’t predictable
Higher up-front costs

GVK Finance prides themselves on being a vehicle asset finance company you can trust. They offer custom finance and lending solutions to suit your business. Whether you need to finance one vehicle or a fleet, at GVK Finance you’ll find the commercial financial service providers in Auckland and even for small and mid-sized businesses in all over New Zealand. Visit our website (www.gvkfinance.co.nz) to find out more about our commercial vehicle finance and other financial services.

Mistakes Business Owners Make When Trying to Expand

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Business growth is a great thing and businesses should always be looking for opportunities to expand. But all too often, many businesses take the wrong road up the ladder, which risks further business growth. While entrepreneurs should always try to expand their business, they should also be wise about it. Here are some common mistakes business owners make when trying to expand.

1. Not doing research

This is perhaps the most common mistake many businesses fall prey to. You read an article about how a certain city is the next frontier in your industry or how a certain product is set to get very popular. These fads are easy to believe but often they will be the cause of the death of your business.

Do your own extensive research. Find out what opportunities there are in your current market and beyond. Determine how your planned expansion will play out with the market and your competition. If you are introducing a new product or service, carry out tests to see whether it will be well received. If you are entering a new market, check whether reception will be as high as you hope.

The importance of prior and ongoing research cannot be over emphasised.

2. Going too fast

There is nothing as exciting for an entrepreneur as expanding. You can see the potential for more customers, increased revenue and higher profits. In the excitement, you might risk moving too fast and hurting your business in the process.

One common problem is expanding too fast such that your business can’t handle the growth. With expansion comes increased costs. Can your business handle the new costs? Can you handle the greater demands on your time?

Adopt the right pace that is comfortable for your business. Take it one step at a time. For instance, you might first need to talk to financial service providers about financing your expansion.

3. Going too slow

This can be just as deadly as moving too fast. If you take all the time to expand, present opportunities could disappear before you take advantage of them. A new business will come along and scoop up the new market. A competing entrepreneur will offer that hot product before you do.

Once you discover an opportunity to expand, take advantage of it in a timely manner.

4. No change in branding and marketing

You have decided to expand your business but you stick to your old branding and marketing strategies. Once you expand, your entire business needs to move with you. Check whether your business name, logo, tagline and marketing strategies are in line with your newly expanded business.

For instance, you might need to remove reference to your local town in your business name if you are expanding to a larger market.

Finance for small and medium-sized businesses

GVK Finance is an asset finance company in Auckland targeted at small and medium-sized enterprises. We are a business finance company in Auckland that understands what it takes to grow a business and are willing to help entrepreneurs achieve their business growth objectives.

Visit our website at www.gvkfinance.co.nz to get in touch with us about our asset finance solutions.

Top Tips for Running Your Own Business: Setting Up

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So, you have a business idea but you need help getting started?

There are a number of options available to you especially if you are in the common situation of needing financial support to get your business idea off the ground. There are companies who specialise in lending money to new business ventures as well as options with your normal bank.

Before you go any further ask yourself two questions:

1. Why do I want to start a business?

2. What is it that I want to offer?

If you do not have the answers to these questions stop now! Do not pass Go! You are not ready to start a business yet!

If you are motivated and believe that starting a business is the next step for you towards financial freedom and not having to work for someone else for a salary then read on! Before you go one step further you will need a business plan to present to a money lender (banker or broker).

Key elements of a successful business plan

1. What will you offer?

2. Who is your target market?

3. How much will you charge?

4. What will you do to make this happen?

You manage to secure finance – now what?

  • Don’t over capitalise – start out small with minimal investment; you can build on your success later.
  • Run your business in an area you are familiar and confident with so you don’t have too much on the job learning to do.
  • Market your business – you cannot grow if no one knows you exist.
  • Read, research and learn from the mistakes of others – many have trodden this path before you.

Be your own boss

It’s a great idea to quit your job and start your own business and earn your own pay cheque but it won’t be easy and there will be tough days when you consider giving it all up. Only you can ultimately make this venture work. You have to be motivated and know when to ask for help and reach out for support and advice. When you are self-employed in your own business you have to ‘be your own boss‘, you set the work hours, the goals and the deadlines. If you don’t work to them, no one else is going to make you.

If you are dedicated to your success and follow your dreams then there is no reason you won’t start up a successful business. If you put in the effort in the set up stages and then seek advice along the way you stand a much better chance of survival than trying to go it alone and struggling when times get tough.

Are you motivated, adaptable and confident? Are you resilient?

If you are all of these things then yes, you have the personality and basic skills to succeed in a small business environment.

For business finance brokers in Auckland you should contact GVK Finance who can offer assistance with: small business loans, commercial finance and capital finance loans. GVK Finance are an asset finance company in Auckland who specialise in: commercial vehicle and truck financing, business equipment and machinery finance, business plant and engineering equipment finance and earth moving asset finance. Visit www.gvkfinance.co.nz for more information and contact details.

Expanding Your Business

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Now that you have survived the first year in business, you could look at expansion plans. It is better to not waste much time in making a solid future arrangement for your business and get going immediately.

Ways to expand your Auckland or Waikato business

1. Go for another location: While your business might have been going great guns at your original location, you would possibly like to branch out. If your idea worked for the original location, there is no reason why it wouldn’t work for another location as well. However, do thoroughly research the new place you are intending to enter as the dynamics might be too different.

2. Make your venture a franchise opportunity for other small businesspeople: When it is not physically possible for you to set up a new unit somewhere else, you could look for franchise partners to help you do so. Not only are you expanding your brand’s geographical expanse and acceptability factor, you are also increasing the output for your business.

3. Make a license for your product: This could be a very smart and easy way to boost sales. You can then get money and royalties upfront from the continued sales of your product. Licensing is a much cheaper and effective option than setting up a new unit somewhere else.

4. Collaborate with other similar ventures: This way, you will be increasing the trust factor for your brand and increasing its public visibility as well. A lot of businesses are now forming tie-ups with ventures from across the same industry.

5. Diversify your venture: Try entering other segments when you are sure that the sales in the original segment are satisfactory. Start with very small efforts like selling complementary products with your original product.

6. Go for other markets: Once you have caught hold of your original market, make sure that you try and catch other markets too as this will have marked influence on the bottom line of your company. However, do conduct your preliminary research into the nuances of the market that you are trying to enter.

7. Try to get a government contract: Remember that one of the best ways to boost your profits is to try and win government contracts. Governments across the world are the biggest consumers for almost all the essential sectors. However, you would need to make some good contacts to make inroads into government sectors.

8. Buy other ventures: Once you have sufficiently established yourself, try buying other ventures that are doing well. You could possibly look for small business loans in Auckland for financing this. There are many financial service providers in Auckland who can help with getting the necessary money.

9. Spend more on marketing and advertising: Remember that a good marketing campaign will significantly increase your sales so you will also need to have the resources to manage the influx of customers.

Do you need some financing to help expand your Auckland or Waikato business? Just visit the website of GVK Finance at www.gvkfinance.co.nz to find out more about their business loans, asset finance and equipment finance.

Making It Through The First Year of Your New Business

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It is unrealistic to assume that once you have set up your business all the hard work is over! The fact remains that more than 50 percent of new businesses die out in the first year. This is true for businesses throughout the world including in New Zealand. This should give you an idea about how difficult it is to get through the first year of your business.

What you could do to help your business through the first year

1. Stick to your business plan: Remember, don’t try to do anything out of the box. You need to play it safe during the initial months of your business. Follow your original business plan as much as you possibly can.

2. Rein in your spending: Most new businesses fail because of a shortage of money. So, to ensure that isn’t your fate, adopt an economical approach. Try not to spend any money until your products have been manufactured and put into the market place. Use contracted employees and hire people only when you desperately need them. Try and use a small office or work from home as office costs can also spiral out of control very quickly.

3. Try and reinvest your share into the company itself: While it is difficult to forego the benefit of a salary you could consider putting money back into the business rather than taking a pay cheque yourself. Remember, you might not be in a position to earn anything during the first year of setting up your business.

4. Hyperactivity and productivity are not the same: Don’t invest too much money and time on things that you are not sure about. Stick to the core business objectives and don’t be too experimental in the first year.

5. Focus on customer service: While your product might be fantastic, remember that it will count for nothing if the customer is not satisfied. So, spend time and effort focusing on delivering the best customer service possible. This will not only keep your customers coming back to you and recommending you, but it will make you stand out from your competitors.

6. Increase your networks: A business typically depends on building relationships. Don’t shy away from building up more trusted contacts. You never know who could be a potential customer, investor or mentor.

7. Try and improve your assets and machinery: Remember that your productivity will largely depend on the quality of the equipment and machinery that you install. If you don’t have the money to set up your business with the best equipment then visit an Auckland or Waikato asset finance company to help you fund your equipment and machinery set up costs.

8. Check your status and react: Make an analysis of how your business is running and make modifications if required. It is necessary to make periodic checks at times to adapt to the changing dynamics of the market place. The market will decide your future plans so make sure you are on the ball to changes in your industry.

If you are looking for some help to finance some additional machinery or equipment for your Auckland business visit the GVK Finance website at: www.gvkfinance.co.nz. They provide medium to small business loans to enterprises across New Zealand.

Setting Up A Business In New Zealand

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Many New Zealanders dream of running their own business rather than working for someone else. For people who are planning to set up their businesses in Auckland and the Waikato, there are currently a whole host of opportunities available.

New Zealand is ranked as one of the easiest places to start a business according to a study conducted by the World Bank. There are few legal restrictions imposed on setting, owning and running a business in New Zealand. The New Zealand Government is a vocal supporter of new businesses with the necessary paperwork taking just a few hours to complete.

Key steps for setting up a your own business in New Zealand

1. The idea: You must have a business plan to start with. Make sure that the plan you are envisaging does actually have the potential to work.

2. Find out if your business idea is good enough to survive: Make a feasibility study of your existing business plan. This is an important part of the planning process which  enables you to assess the potential risks so there are no surprises later.

3. Calculate the money that you require to set up your business and operate it for at least the first 6 months: This phase is the most crucial stage in setting up your business. Find out the exact amount of money that you need to set up your business. Also, find out an approximate amount of money that you might need to run it.

4. Hire finance brokers: When setting up a business, enlist the help of your local business finance broker. As well as traditional lenders such as banks, there are independent finance companies that provide small business loans for setting up, running and expanding a business. If you’re setting up a business in Auckland, visit the small business loans Auckland page of GVK Finance to find out more, or google financial company Auckland.

5. Get the loan: Once you’ve found the best loan provider for your circumstances you can start the finance application process. Your lender will need various documents and evidence before authorising your financing. You can discuss the specifics of your provider’s lending criteria with your finance brokers. For Auckland based businesses check out GVK Finance’s business finance brokers Auckland page.

6. Make a business plan: You need to be absolutely sure about what you want to achieve with your business. Once you have finalised your priorities, start making a business plan detailing all your business milestones. Remember, all your plans need to be realistic and achievable. Make your business plan short, simple and clear so that you can refer to it throughout the lifetime of your business.

7. Start deciphering and understanding the various nuances of taxes: Remember that tax can be the most complicated part of setting up a business so try to get the help of an accountant if possible. It is important that all the relevant taxation information is set up before you launch the business. If you’re a Wellington based business then check out the Count On Us accountants website.

8. Start with it: Last but not least, launch your business and enjoy the fruits of all your planning and hard work. Good luck!

If you are a small or medium business in New Zealand, and you don’t have enough financing to implement your business plan, visit GVK Finance today for financial advice and business lending. For a free consultation with their friendly finance team submit your information online at www.gvkfinance.co.nz.

What You Need to Know About Expanding Your Business

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You have worked hard at building a successful business. You customer base is sizable, your sales area and profits are steady. What comes next? For most entrepreneurs, the biggest challenge at this point is how to keep sales, customers and other aspects of your business growing.

Some tips for business expansion

1. Open a second location

For physical businesses, this is the easiest way to expand. Opening a second location will allow you to serve more customers and bring in more sales. Your brand will also grow with this expansion.

It is extremely important that you choose the right location for your second store. You should put the same amount of effort into researching your second location as you did with the first one. It is also important to make sure that your business has the finance and capacity to handle more than one location. The last thing you want is a fall in service delivery.

If you’re an Auckland based company and need finance to expand your business, check out GVK Finance’s small business loans Auckland page.

2. Expand your product or service offering

Another way to expand is by adding more products or services to what you already offer. This might not apply to all kinds of business but by adding more products or services, you can target an even larger market and bring in more customers. You can opt to add completely new products, slight variations of your existing products, or products that are complementary to the ones you sell.

For those businesses offering services, you could add related services to your existing ones or offer your services in other locations.

3. Expand into other markets

Another option is to look for a new market. Do your research and find other markets where your product might do well. It could be another location, another age group, another interest group or even another country. The most important thing is to do extensive research to ensure that you are not making a mistake.

4. Expand your physical size

For physical stores, another obvious way to grow is to expand in size. This works if your current location has room for expansion or you can find a larger location nearby. As with other expansion strategies, make sure that you are capable of handling the new growth. This includes adequate products and a large enough workforce.

5. Buy another business

A good, though expensive, way to expand is to acquire another business in the same industry as yours. You get to take over their customers and assets. You may also decide to merge with another business.

6. Go online

The internet gives you access to a larger market and an easy way to reach and interact with them. Even if you do not sell products online, simply establishing a strong web marketing presence on the internet will bring more customers into your store.

If you are looking to expand your business, GVK Finance can help with all your financing needs. GVK Finance is a highly reputable asset finance company based in Auckland. We service the entire country providing loans for machines, commercial vehicles, commercial equipment and agricultural equipment. Visit our website at www.gvkfinance.co.nz for more information.