Cost-cutting ahead for Business Central
A key Wellington business group is reviewing its structure after posting operational losses linked to a merger which was meant to reduce costs.
Business Central - represented in the capital by Wellington Employers' Chamber of Commerce - is a not-for-profit membership organisation. It was formed in a 2010 merger between the Wellington Regional Chamber of Commerce and the central branch of the Employers and Manufacturers Association (EMA).
The merger was at the time flagged as a money-saver because it would reduce back-office costs.
In 2011 the group posted a net loss of $639,000. That ballooned to a loss of just over $1 million in 2012.
It recorded a $514,000 profit last year.
Chamber president and Business Central trustee John Milford said they had failed to meet its financial operating goal of breaking even. "It became clear after the amalgamation that meeting these break-even operating objectives was tough.
"It is fair to say that we have not reached them on an operating level. We have investments which have helped us on that side of the balance sheet . . . but you don't want to eat up your reserves."
The group's total assets outweighed its liabilities by more than $8 million.
A review is under way in which the services offered by Business Central, and how it offers them, would be scrutinised. Milford would not say whether redundancies were on the cards.
Business Central chief executive Raewyn Bleakley said it was "normal business practice to review business models, staff structures, and pricing, and to take necessary steps to ensure our organisation remains financially sustainable.
"At this time we are reviewing one part of our business which is not operating economically."
Bleakley said no more comment would be made until the staff consultation phase was concluded.
"We expect this process to take several more weeks."
EMA Central merged with Wellington Regional Chamber of Commerce in 2010 to form a regional organisation which operates as Business Central, covering the central part of the country. The Wellington Employers' Chamber of Commerce is the Wellington branch of that organisation.
About 45 Business Central staff deliver a range of services to 3500 members throughout the region.
The merger of the two organisations came when Charles Finny was the chamber's chief executive, although he stood down soon after, in a planned move. He is now a board member.
"I still think that the merger was the right way to go. We will, in the long term, have a much better resource and much more effective business organisation in the centre of the country and in Wellington city as a result.
"But it is important to make sure it's on a sustainable financial footing."