On 3 April 2020, the Government announced that it would be making changes to the Companies Act 1993 to provide insolvency relief for businesses affected by COVID-19.

Yesterday, 5 May 2020, the first reading of the COVID-19 Response (Further Management Measures) Legislation Bill) took place. That bill introduces, amongst other measures:

  • Reducing the voidable transaction and voidable charge period for non-related parties to six months (Schedule 2)
  • The safe harbour provisions for directors (Schedule 3)
  • The COVID-19 business debt hibernation (Schedule 4)
  • Extensions to the periods mortgages and rent can be in arrears before default notices can be issued and enforcement action can be taken under the Property Law Act 2007 (Schedule 14)

Both the Safe Harbour provisions and the Business Debt Hibernation scheme are intended to be used by companies who, but for COVID-19 would not be facing cash flow issues.

Safe Harbour Provisions

The safe harbour provisions allow directors to trade during the safe harbour period (initially 3 April 2020 to 30 September 2020) without breaching section 135 (reckless trading) and/or section 136 of the Companies Act 1993 if:

  • The company “was able to pay its debts as they became due in the normal course of business” as at 31 December 2019 (Pre-COVID-19 Solvent); and
  • In good faith, the directors are of the opinion that the company:
    • has or will have short term, COVID-19 related liquidity problems over the next six months; and
    • will (more likely than not) be able to pay its due debts on and after 30 September 2021.

                (Post-COVID-19 Solvency Opinion)

The bill puts the onus on the directors to show that they are entitled to the protection afforded safe harbour provisions. The bill also contemplates that the safe harbour period could be extended beyond 30 September 2020.

Business Debt Hibernation

The Business Debt Hibernation(BDH)  scheme will allow entities (including companies, partnerships, body corporates, and unincorporated bodies) to delay payment of their debts, whether in full or in part, for a period of up to seven months.

Entities will be able to enter into BDH if:

  • The entity was Pre-COVID-19 Solvent;
  • At least 80% of the entity’s directors vote in favour of a resolution to enter into BDH; and
  • Each director who votes in favour of the BDH:
    • Makes a statutory declaration that:
      • The entity was Pre-COVID-19 Solvent
      • The director holds a Post-COVID-19 Solvency Opinion
      • Sets out the grounds for his or her Post-COVID-19 Solvency Opinion

                     (Post-COVID-19 Solvency Declaration)

    • Is acting in good faith

The entity will enter into the BDH when it delivers notice of the BDH to the Registrar (as drafted, all entities will deliver the BDH notice to the Registrar of Companies, not just companies registered on the Companies Register). Entities entering into BDH will have an initial one-month protection period during which creditors will be prevented from starting or continuing enforcement action against the entity and its assets while the entity puts forward its proposed arrangement with its creditors. If the proposed arrangement is supported by 50% of the entity’s creditors (in number and value) who vote on the proposed arrangement, the protection period will be extended for a further six months and all creditors who were sent notice of the proposed arrangement will be bound by the proposed arrangement.

During the protection period (including the extended protection period), unless the approved arrangement provides otherwise or only with the court’s permission:

  • Creditors will not be able to enforce their charges over the entity’s property;
  • Lessors will not be entitled to take possession of the property used or occupied by the entity;
  • Creditors will not be able to begin or continue proceedings for a debt or the recovery of property from the entity;
  • Creditors cannot start or continue enforcement action against the entity;
  • Creditors cannot call on guarantors of BDH debts, if the guarantor is related party of the entity.

The extended protection period will come to an end if at least 80% of the entity’s directors are not prepared to make new Post-COVID-19 Solvency Declarations, if requested to do so by a creditor. Once given, each Solvency Declaration can be supplied to creditors requesting a new Solvency Declaration for a period of up to two months from the date it is given.

The following debts are excluded from BDHs:

  • Employees’ remuneration (including PAYE and other deductions)
  • Amounts owed to secured creditors with security over all or substantially all of the entity’s assets (after the initial one-month protection period)
  • Debts incurred after the company enters BDH
  • Excluded debts (the term “excluded debts” is not defined in the bill)

A BDH does not compromise any of the entity’s debts but an entity in BDH can advance a creditor compromise or be placed into voluntary administration during the protection period.

Progressing the Bill

The bill has been referred to the Epidemic Response Committee, who are due to report back to the house on 12 May 2020.

A date for the second reading of the bill has not yet been announced.

You can find a copy of the bill here

How We Can Help

Directors wanting to take advantage of the Safe Harbour provisions or entities considering the BDH will need to satisfy themselves that the entity was Pre-COVID-19 Solvent and that they have a good faith basis for their Post-COVID-19 Solvency Opinion. Because of these requirements, if you have any hesitation about your entity’s financial position, we strongly recommend that you take advice.

For entities that cannot meet the solvency requirements of the Safe Harbour provisions or the BDH scheme, there are a number of business restructuring options available that could help directors and shareholders navigate their way through the financial challenges brought about by COVID-19.

If you want to discuss the issues your business is facing, email us on This email address is being protected from spambots. You need JavaScript enabled to view it. to request a phone call from or Zoom meeting with one of our insolvency practitioners.


Friday, 07 February 2020 10:34

Relieving The Pressure

It is an unfortunate truth that, generally speaking, business owners only approach an Insolvency Practitioner about the financial plight of their company when the problem is terminal, and the only viable option is liquidation.

The approach often happens when the pressure on the directors of the company gets unbearable and it starts to effect their health. With a large number of New Zealand companies having directors and shareholders who have personally guaranteed the company’s debts to financial institutions and suppliers, the pressure that comes with running a struggling company is intensified by the fact their personal assets could also be at risk.

It isn’t unusual, when first meeting with directors and shareholders in this position, for them to tell us that they “can’t afford” to stop trading the business because they could lose their house. The reality is that by carrying on they are only digging the hole deeper and the light that they think they can see at the end of the tunnel is a train coming their way.

As soon as concerns arise around the solvency of a business, the best decision that can be made is to consult an experienced Accredited Insolvency Practitioner (AIP). If you do that soon enough, there are more options available to recover the position, without putting personal assets at risk, such as restructuring or compromises with creditors.

If, however, the damage has already been done, you may not be able to recover the position but, by contacting an AIP immediately, you can limit how deep the hole is and reduce the risk to your personal assets.

Regardless of the stage at which you contact the AIP and initiate a course of action, you will find that the pressure will ease. The AIP will take over dealing with the creditors who have been hounding you and will put in motion a process for the orderly winding up of your business.

Depending on your circumstances, there may still be issues for you to face over personal guarantees but, with insolvency process started, you will at least know the size of the problem and it won’t be getting any bigger.

If you would like advice in relation to the solvency of your company and the best way to deal with any issues, please contact one of the team at McDonald Vague.

There are three rescue procedures in NZ, the compromise (Part 14), the Court approved scheme of arrangement (Part 15) – an option seldom used, and Voluntary Administration (Part 15A).

Liquidation is not a rescue procedure. It is usually a terminal procedure. Liquidators typically trade only for a short term for the purposes of the liquidation. The purpose of liquidation is to realise and distribute assets, not business survival.

Some companies however advance liquidation for the purpose of restructuring and to purchase back part of the business from the liquidator (at market value). Some companies advance liquidation with a known purchaser lined up to purchase the business in a clean structure. The consideration attributed is often pre approved by the secured creditors in these cases.

Receivership can be a rescue procedure. It can result in the rescue of viable parts/businesses but the primary duty of a Receiver is to get the best return for the secured creditor (usually the bank). Business survival may be an outcome. Banks may agree to a VA proceeding to avoid the negative publicity from appointing a Receiver or to protect the value of the business goodwill achieved from the stay in an Administration.

A company compromise under Part 14 of the Companies Act 1993 is a useful method without (in theory) having to go to Court. There is however no automatic moratorium (like with a VA) so sometimes you go to Court anyway. A compromise requires the identification of classes of creditors and 75% approval by class. There is often no outside independent manager involved. The compromise is the likely least expensive option but it requires approval to essentially be assured in advance. It works well for smaller companies with lesser creditors involved.

A Voluntary Administration is advanced where the company is cash flow insolvent or likely to become insolvent. No Court application is required. The Board of directors can appoint an Administrator. If there is a winding up application (by a creditor) on foot, the Court will likely adjourn the winding up application if the Court is satisfied that it is in the interests of the creditors (Section 239ABV, Companies Act 1993).

A business must be truly viable to be successfully rehabilitated. The appointment of an administrator for any other reason apart from rehabilitation is unlikely to gain the requisite support.

Liquidation versus Administration

A liquidator can only trade on for limited purpose of winding up. An administrator on the other hand has wide powers including the power to borrow. Some contracts will have termination clauses on liquidation but not on Administration. Both options have their advantages.

The best option is best discussed and well considered before advancing. Contact our team for advice on the options available if your business is in need of rescue, restructure or an orderly termination.

Tuesday, 25 June 2019 12:58

Received A Statutory Demand ?

A statutory demand is a claim under Section 289 of the Companies Act 1993. Failing to comply with a statutory demand or applying to set it aside within the specified timeframes will result in your company being deemed to be insolvent and liquidation may follow.

A company is insolvent if it is unable to pay its debts when they fall due.

Non-compliance with a statutory demand served on your company allows the creditor that served the statutory demand to apply to the High Court to appoint a liquidator. The most common basis for a company in New Zealand to be placed into liquidation by the High Court is from failure to comply with a statutory demand.

If you receive a Statutory Demand you need to act quickly. You can either pay the specified sum, enter into some form of compromise to pay the debt, or offer up some form of security to the satisfaction of the creditor.

If the debt is disputed you must apply under Section 290 to have the debt set aside. You will need to engage a lawyer.

The court may grant an application to set aside a statutory demand if it is satisfied that

(a) there is a substantial dispute whether or not the debt is owing or is due; or

(b) the company appears to have a counterclaim, set-off, or cross-demand and the amount specified in the demand less the amount of the counterclaim, set-off, or cross-demand is less than the prescribed amount; or

(c) the demand ought to be set aside on other grounds.

If no action is taken, nor a liquidator appointed voluntarily (by the shareholders) before the service of the Winding Up Proceeding, the Winding Up Application hearing takes place and if the High Court is satisfied that the company should be wound up, an order for the Company to be wound up is made and the Court appoints a liquidator. A liquidator is nominated by the applicant creditor and provides a consent to act prior to the hearing.

If your company does not satisfy the solvency test and is risking trading insolvently then the shareholders of the company can voluntarily appoint a liquidator so long as the appointment occurs before the service of a winding up application (which often closely follows the expiry of the statutory demand).

Pending Winding Up Proceeding – options to consider

Your company may be closed by the liquidator or the business sold. You can save your company from facing Court liquidation proceedings with the following options:

• Voluntary liquidation (if liquidation is inevitable)
• Voluntary Administration
• Company Compromise – Part XIV Companies Act 1993
• Debt Restructuring and a workout
• Advice on your options early on

Liquidation may be inevitable and a way out of a downward spiral. Speak to an a Licensed Insolvency Practitioner. It may not mean losing your business. Some companies advance liquidation voluntarily in order to restructure.

Get Advice

For advice on statutory demands, liquidation, hive down, voluntary administration or compromise contact our team at McDonald Vague.

If you need a Licensed Insolvency Practitioner to consent to act as liquidator on an upcoming court liquidation or to manage a voluntary liquidation, Boris, Iain, Colin, Keaton or Peri are pleased to assist.


Other Links:

1. Statutory Demand Infographic

2. Guides on Statutory Demands and Options

3. Serving Statutory Demands

4. Further Discussion on Statutory Demands - Steps to Take

As a landlord of commercial property it is important for you to understand your rights and responsibilities to ensure you don’t inadvertently breach legislation and obligations. If you do, you may face significant liability.

A Deed of Lease details the relationship and terms/conditions between a commercial landlord and tenant. The Property Law Act 2007 (“PLA”) defines rights and obligations of landlords and tenants. The Unit Titles Act 2010 can also apply if the property is a unit title.

A commercial landlord has obligations to comply with the Building Act 2004 and Building Code and to complete a building warrant of fitness for Council.

A commercial landlord also has obligations to maintain the building, comply with health and safety standards. A tenant has obligations to maintain the premises and the Deed will often extend to obligations as to damage/loss, painting, floor coverings, rubbish removal, etc.

When can a landlord terminate a lease?

If the tenant is in breach of its obligations to the landlord, the landlord may be entitled to terminate the lease.  Where a landlord wants to terminate a lease, the PLA requires notice to be served on the tenant in accordance with section 245 of the Property Law Act 2007.

The notice of intention to cancel a lease must expire before a landlord re-enters the premises. A notice must be sent setting out the nature of the breach and remedy required and the rights of the tenant.

The PLA says a landlord may only cancel a lease for non-payment of rent, if rent is at least 10 working days in arrears. A landlord may also cancel for reason of insolvency, liquidation or bankruptcy of the tenant. Once the statutory timeframe expires the landlord can re-enter and seek to mitigate its loss by re letting the premises. The landlord however needs to be wary of the rights of secured creditors to the company assets.  There are however a myriad of priority issues that need to be considered and the landlord must give notice and reasonable time for the chattels to be removed.

What If Your Commercial Tenant Goes Bust?

A good commercial lease contains ‘ipso facto’ clauses, which specifically provide for insolvency, which is usually triggered by the tenant entering into liquidation or administration or receivership or becoming bankrupt. The lease usually survives the appointment of an administrator or receiver but may end on liquidation.

A landlord can seek judgment against the guarantor and following judgment issue bankruptcy proceedings against a guarantor on failure to pay.

If the Commercial Tenant Fails To Pay?

Tenants by vacating the premises and leaving rents in arrears are not released from their legal liability. While the lease remains on foot, rent continues to accrue, and the tenant and guarantors are liable. The tenant under the Deed of Lease may be required to continue the lease obligation for the balance of the term of lease and can be liable for reasonable costs incurred in re-tenanting the premises. If the company has no ability to pay, a guarantor may be pursued.

A landlord can issue a statutory demand and following failure to make payment under that demand issue winding up proceedings against their tenant company if there is a failure to pay, a default under the terms of the lease and suspicion of insolvency.

Often landlords protect their position by requiring some form of deposit or a bank guarantee to avoid the more costly recovery options and for better protection.

A landlord has no right to take possession of the tenants’ belongings and sell them to cover unpaid rent. Some more current deeds of lease however can now require the tenant company to grant a GSA at the same time as granting the lease. Depending on the wording, this can provide the landlord with the entitlement to recovery of fixtures and fittings and potentially chattels. A well drafted Deed that grants security in assets can provide protection to the landlord in the event of insolvency of their tenant.

If The Commercial Tenant Faces Liquidation or Receivership

Most Deeds of Lease provide for the termination of lease in the event of the tenants’ company being placed into liquidation. If there are arrears, the landlord is entitled to file a claim in the liquidation.

Often a liquidator will seek to trade or to occupy the premises for a period to realise value in the company assets.

If the company occupies the premises then the liquidator can be liable for payment of rent from the date of liquidation. A liquidator may disclaim the lease at which time the rights and obligations of the tenant end.

In Receivership, a receiver has no right to disclaim a lease and can be held personally liable for rent and lease payments from 14 days after the appointment date until the occupation ends or receivership ends.

Most Deeds of Lease will allow the landlord to cancel the lease if a Receiver is appointed.

Liquidation or Receivership will more often than not end the landlord and tenant relationship.

Final Observation

Overall, a Landlord’s rights depend on the terms of their Lease Agreement. Always include specific provisions for liquidation or receivership or administration in a commercial lease. Remember, if the lessor has not given the tenant the notice specified in a commercial lease before enforcing a right of re-entry, the tenant may have remedies against the lessor and apply to the court for relief.

A well documented Deed of Lease will provide for a deposit or bank guarantee, a personal guarantee and/or general security over specific assets such as fixtures and fittings.

If your commercial tenant has vacated leaving rent arrears, or is potentially trading insolvently contact McDonald Vague as an option may be to start the winding up process.


Thursday, 26 July 2018 11:36

Appointing an Interim Liquidator

As the creditor of a company that is failing to make payment of amounts owed, the process you have to follow, to have liquidators appointed in relation to that debtor company, can be slow and frustrating.

It will be even more frustrating, and worrying, if you have concerns about what will happen with the assets of the debtor company while the process takes place?

There is an option, pursuant to Sections 241(4)(d) and 246 of the Companies Act 1993 (“the Act”) to have an interim liquidator appointed by the Court to take control of and preserve those at-risk assets.


In the normal course of events, when liquidating a debtor company, the process starts with the serving of a statutory demand giving 15 working days for the debtor company to make payment or enter into an arrangement to settle.

If the statutory demand is not satisfied, then an application must be filed in the High Court to have the company placed into liquidation and requires the service of those documents on the debtor company. Public notice of the application has to be given in the local newspaper and, depending on the Court the application is filed in, it may be up to a month before the application is heard.


Rather than go through the normal process of making demand and then following up with liquidation proceedings, a creditor can, if the circumstances justify it, make an application to the High Court for the appointment of a liquidator to the debtor company pursuant to section 241(4)(d) of the Act, on the basis that it is just and equitable to do so.

If there are justifiable concerns about the potential for the assets of the debtor company to be dissipated in the period between the time of the application being filed in the High Court to have debtor company liquidated and the date for the hearing of that application, the applicant creditor can also apply to the Court, pursuant to section 246 of the Act, to have an interim liquidator appointed.

The Court may appoint an interim liquidator if it is satisfied that it is “necessary or expedient for the purpose of maintaining the value of assets owned or managed by the company”. The Court impose some restrictions on the interim liquidator, such as not being able to make distributions, until the full liquidation order is made at the hearing date.


If you are looking to have a debtor company liquidated but have serious concerns about what will happen to assets in the intervening time, an application for the appointment of the interim liquidator can be made without notice to the debtor company and such an appointment should ensure that the risk of the debtor company’s assets being dissipated, before the full hearing of the liquidation proceedings can be held, is greatly reduced.

If you would like any information about appointing an interim liquidator please contact us.

There are a number of reasons for poor business cashflow.

We have highlighted the top seven as follows:

One: Accounts receivable process

A poor accounts receivable process will result in debtor days (the time between billing and banking) being too high. This will stifle your cashflow. There are many strategies to minimise debtor days including tightening your Terms of Trade, offering prompt payment discounts and streamlining your billing process.

Two: Accounts payable process

A review of all suppliers’ terms may identify ways to improve cashflow and potentially achieve better Terms of Trade. Implementing budgets, streamlining your payments process to maximise prompt payment discounts and avoid late payment penalties is just the start.

Three: Inventory process

Carrying stock for too long means full shelves but an empty bank account. This is no different if you’re a service provider with work in progress that is yet to be billed. Reviewing your stock ordering systems and stock control processes (to name a few) will identify strategies to ensure cash hits the bank sooner.

Four: Inappropriate debt/capital structure

Often significant cashflow and interest charge improvements can be achieved with a regular review of existing debt. Maybe your debt / capital structure could be improved, or perhaps your debt should be consolidated and paid off over a longer term. Maybe you need to review and adjust what you’re drawing from the business, or perhaps the business needs a capital injection to fund its growth.

Five: Overheads too high

Every business should do a thorough review of its overheads each year. Reviewing the effectiveness of your marketing spend, going paperless, putting expense budgets in place and changing your technology platform are some simple ways to reduce overheads.

Six: Gross profit margins too low

Our gross profit margin is what is left from sales value after variable costs are deducted. There are a large number of strategies that you can implement to increase your margin, such as focusing on rework and wastage, reducing stock shrinkage and improving team productivity, just to name a few.

Seven: Sales levels too low

If the current sales levels don’t support overheads and other cash demands on the business, then the business is not currently viable. If in high growth mode, a financing plan will be necessary. If not, we need to consider how we will grow sales. To grow sales we need to focus on customer retention, generating leads, improving sales conversion, customer transaction frequency and pricing strategies.

Need help managing your cashflow

Our Cashflow Management Coaching service has been designed to treat the underlying causes of poor cashflow. As part of that service, together we’ll conduct a thorough review of the above key causes, set goals for improvement, and you’ll implement simple strategies to maximise cashflow.

Contact McDonald Vague for more information

Quality, well trained, experienced, and reliable employees are invaluable to your business. 

Problems with staffing can quickly cause much larger issues for your business.  Losing key staff members can hurt the business – they take vital skills and knowledge (and potentially customers) with them.  A customer’s bad experience can lead to a poor reputation, especially if that customer airs his/her complaints on social media.  A fraudulent or dishonest employee can easily cause you losses amounting to tens of thousands of dollars and several sleepless nights.

The good news is that there are things you do to ensure your team is happy, productive, and providing the best experience for your customers: 

- Make outstanding customer service one of your business’ core values.

- Make sure your new staff are properly trained in your business’ values and for their role, including how to deal with difficult customers and situations.  It’s vital to have solid induction procedures in place to ensure all staff receive the same high standard of training and deliver the same high level of service.

- Your employees are an investment in your business so make sure you look after them.  Provide them with good working conditions, adequate breaks, the tools they need to do their jobs effectively, and a happy work environment.  Reward employees who demonstrate the values of your company and achieve KPIs.  Staff that feel valued are loyal and engaged.

- Provide ongoing training.  If you give your staff the opportunity to gain new skills and grow with your business, they’re more likely to stay engaged and see a future with your business (instead of someone else’s).

It’s also important that you protect your business from staffing issues:

- Ensure you have written employment agreements for all your employees.  If you have any employees who have not signed their employment agreements, get them signed.

- Review your employment agreement every year or so to ensure that it is meeting your needs.  If it’s not, get it updated.

- Talk to your insurance broker about the benefits (and cost) of taking out key person insurance and/or employee theft and fraud insurance.

Good employees are a great business asset.  Putting the right strategies and tools in place can help you make the most of that investment.

For more insights from our team, follow us on LindedIn.

We have seen first-hand how natural disasters can negatively impact retail businesses.  The 2011 Christchurch earthquake destroyed several buildings in the city’s CBD.  The November 2016 Kaikoura earthquakes impacted several retail businesses in the North and South Islands. 

In a matter of minutes, many businesses lost use of their premises and many retailers lost a significant amount of stock.  Some retail businesses in Christchurch were unable to operate for months after the earthquakes while others never recovered.  Some of those affected by the Kaikoura earthquakes are facing the same issues.  While having a disaster recovery plan in place before you need it won’t prevent disasters from occurring, it could save your business by providing you with a well thought out plan that will help you to move forward.

It’s also important to properly insure your company and to review your insurance cover regularly to ensure your business is adequately protected.  If you have business interruption insurance, it can help protect your business against loss of income suffered because of an unexpected setback.  Key person insurance can provide monetary compensation/revenue replacement in the event that something happens to someone pivotal to your business’ ongoing success.  There are also various insurance products available that cover stock, machinery, and plant.  An insurance broker should be able to advise you on what insurance you should be carrying.

Changes in the economy can also wreak havoc on a previously stable business.  The Global Financial Crisis caused a downturn in many retail markets, including New Zealand.  Similarly, changes to legislation can see a booming retail business become unprofitable overnight, as happened to several retail businesses when the government banned previously legal party pills. 

If you buy products or services from overseas, it is important to monitor foreign exchange rates.  You can lock in foreign exchange rates (just like a fixed mortgage interest rate) to protect your business against exchange rate fluctuations.  If the exchange rate drops after you lock in your rate, you could end up paying a little more (to cover the cost of the hedge) but, if there is any increase in the exchange rate, you know you will still be able to afford to pay your suppliers.

Running a business can be unpredictable.  If your business has suffered an unplanned event or you’re looking to set up recovery plans, talking to a business risk or business strategy advisor could help guide you through these stressful periods.

Contact us to see how we can help.

In the modern world, retail businesses are part of our everyday lives and cater to our every need and want.  For this reason, owning a retail company may appear to be a guaranteed way to make money.  The reality for most retailers though is that they are surviving on ever-tightening margins because of competition and increasing overheads. 

Retail is a cash hungry business so poor cash flow can put your business in serious financial trouble.  Because stock ties up your capital, inventory problems and cash flow issues usually go hand in hand.  To remain profitable, you need to continually turn over stock so that you have working capital available to pay your bills.

While you need well-stocked shelves and warehouses so you can meet your customers’ needs, you don’t want to be paying for products to sit in a store room or on your store shelves for an extended period.  If you understand your customer base (who is shopping at your store, what products they want, and how much they are prepared to pay), you’re more likely to get your inventory/stock/cash flow balance right.  You also need to understand your customer base to develop a marketing strategy that works effectively.  If you can develop a loyal customer base, there should always be demand for your products. 

Once you understand your customer base, you can ensure you’re stocking products that will move quickly at a price your customers are prepared to pay.  If you misjudge your customer base and end up stocking any products that are not selling, discount them to move them on then replace them with products that sell.  If people are not buying a certain product, that product is not making you any money, taking up valuable space, and tying up your capital.  Focusing on reaching a target market by stocking certain types of products (such as eco-friendly children’s products or gourmet food products) can allow you to streamline your product line, raise product margins, and create a sustainable business.  If you stay on top of trends in product margins and product lines that are relevant to your customer base, you can introduce the right products and capitalise on these trends.  Making a profit on the goods you’re selling, puts cash back into your business, which is vital for its ongoing success.

Getting your inventory right can require some educated guessing and a bit of trial an error.  If you’re not quite getting the balance right or you’re thinking about making changes to your business model, talking to someone independent could help you figure out what you can do to make your business a success.

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