It takes a passionate entrepreneur to grow an organic wholesale food and coffee business during challenging times - and the right business advice.
For Kokako managing director Mike Murphy, working with Aaron Wallace of Bellingham Wallace Chartered Accountants was integral to growing the café he bought in 2007 into a leading sustainability brand in the food and beverage sector.
"Surviving the recession was tough and we had to make some difficult decisions. Aaron has always shared our vision and helped us find the best way forward," says Mike.
In the early stages, Aaron saw that getting the business structure right was key to not just growing Kokako, a diverse business, but also planning for succession, such as a trade sale or bringing in investment partners.
"What you want is a business structure that provides choices - about how and when you raise investment money, about tax efficiency, about management styles and succession options," says Aaron.
By carving up the business, Mike increased his growth options. For example, Kokako supplied Air New Zealand trans-Tasman and Pacific flights with four of its packaged products and the Hell Pizza chain with all its gluten-free chocolate brownies.
Aaron helped us work through the best approach. We determined that the real value of the business lay in the Kokako brand and intellectual property.
Aaron gave us options and helped us work through the best approach
Kokako's food production has since developed into a streamlined, cost-effective operation focused on preservative-free sweet treats made with organic and natural ingredients. As well as Air New Zealand, they feature on the shelves of artisan food retailers such as Moore Wilsons and Farro Fresh along with health food and organic outlets such as Huckleberry Farms and Commonsense Organics - among others.
Kokako's focus at the time was on re-establishing its retail presence in the coffee scene - marked by the opening of its design-led café/roastery in the Auckland suburb of Grey Lynn in 2012. This has been enabled through shareholder support.
"We realised the only way to grow the business was to bring in shareholders and relinquish some control. Aaron's been on side to ensure our balance sheets are clean and that we're holding shareholder funds in the company in a way that's appropriate and fair for all parties."
At the end of the day, Aaron and his team made a difference because they are very much in touch with our vision
Although Kokako has been going for over ten years, under the direction of Mike and other shareholders for the last five years, the business has mimicked a start-up, having required intensive investment to grow and mature. After several tough years of development, the company is now moving towards a more cash flow positive position with stable revenue growth.
"To grow your business in the right way without losing focus you need the right accounting and business advice. You want someone not just with technical skills but who shares your vision for growing the business. They should ask questions like, 'How are you developing your business?' or 'What structure best suits your kind of growth?'
"At the end of the day, Aaron and his team made a difference because they are very in touch with our vision. They 'get' the brand and despite the risks and challenges in it, have kept us positively focused on the long term."