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Talking business

by Anthony Haas

 

Making use of Sione's learning

3 Dec 2008

Sione came to New Zealand for better education and employment opportunities. He got through his trade training, but did not learn how to manage the business he dreamt of owning.

In the story that follows, know that the anonymous Sione is based on real Pacific migrants. The story is told to help work our what financial literacy programmnes might offer to some permanent migrants, some seasonal workers, and some others.

Eventually Sione’s relatives had found his weaknesses and misunderstanding in business. Faced with his mountain of debt, they tried to plug his and his family’s skills and financial knowledge gaps.

With a jolt he had started to learn the differences between GST, company and personal taxes, assessments, penalties and interest rates.

A mentoring service was identified, and Sione hoped it would make a difference. Something was needed, particularly given communication with his accountant was indifferent.

The free mentor service said the person they would select should not be seen as a paid consultant, but Sione, nudged by those around him, hoped the experienced business mentor – a retired non Pacific businessman - would explain mostly everything about business, and help his business to survive in future.

The relatives tried to get a friend to show how to prepare a business plan. One of those organizations who claim they are there to help said a plan would be necessary before they considered making him a loan for a workshop near his home. That did not work, so a relative coaxed Sione through ideas about production, markets and management, which led to an outline plan the accountant pooh poohed. But with his new plan, Sione could join in deciding what to do about charge out rates, hours he could target as chargeable, and other assumptions that could make his small business viable.

Sione needed relief from taxes that had grown through his lack of understanding, and lack of well assembled financial information. The threat of the debt – and its growth – hung over the family.

Information uncovered in drawing up a statement of financial position and cash flow threw light on past realities and future possibilities. Friends gave Sione a computer, installed word, email and spreadsheet programmes. They found volunteers and teenagers in his family to help show him how to use computing in business.

Sione’s comprehension was greater than his written English would suggest – but he needs financial and other business skills and knowledge. He had one year of secondary education in New Zealand followed by a period working in a factory and eventually chose a trade career path (before the modern apprenticeship scheme was established), in which he could be self employed. While he trained for his trade, he clearly did not get focused, or trained, to run a small business.

He married another migrant who had also had very limited formal education in a remote Island, where her duty was to leave school at 13 to care for her dying father.

With no financial assets and negligible support, he built up his business. He is good at his trade.

Relatives tried to help with business advice, but did not want to interfere, so introduced others who might have been able to help. They suggested an organisation with a mandate to help self employed people like Sione. But between them they failed to complete a plan, attract a soft loan, and get the workshop.

The relatives then agreed to be more hands on. Progress was made in Sione’s understanding of business planning, and the need to create management systems to put tax expenditure and income information into an order the couple, their accountant, bank and others important to them could understand and operate.

His accountant provides some of the necessary services – but not other services still needed to help Sione grow the business.

Sometime annually Parliament will be given a report on progress with the implementation of the National Strategy for Financial Literacy, which was unveiled in mid 2008.

The strategy wants to facilitate financial education programmes tailored to Pacific peoples, and other New Zealanders. It wants the programmes to provide the information and skills necessary for people like Sione to become well informed and knowledgeable consumers of financial products and services, to manage money effectively on a daily basis, and to plan for the future. NZAID wants providers of financial and wider literacy for seasonal workers.

Permanent New Zealand residents and seasonal workers from neighboring Pacific Islands need some of the skills and knowledge in the financial literacy strategy and projects – and more. They are not alone.

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