Auckland home buys Wellington business
David and Christine Archer’s award-winning Guthrie Bowron business in Wellington.
Throughout Auckland, couples with equity in their homes are having the “what if we were to sell” conversation.
This is due, of course, to the now massive differential in house values between Auckland and most other regions of New Zealand.
Queen City house values have passed nine times the national income (sometimes more in pricier suburbs), while in the rest of New Zealand the house to income ratio is more like six-to-one. So an unprecedented city-to-regions price differential informs endless daydreaming sessions.
But though many Aucklanders can probably see themselves swapping big city traffic and stress for a better life elsewhere, they must invariably ask themselves, “what do we do for a living there?”
Simon Lord of franchise.co.nz believes the answer is closer than a lot of Auckland folk realise — possibly right under their lounge sofa, in fact.
“It is possible for an Auckland property to finance not only a new home but also a profitable franchise business elsewhere,” he points out.
“The key word here is ‘profitable’; regional centres might have a smaller economy than some Auckland locations, but they can — and frequently do — produce better results.”
Lord says regional businesses often enjoy far better rent-ratios than urban ones, for several reasons.
“The property market and rates in Auckland mean that many businesses need a significant level of sales before they even cover their costs. But in the regions, although sales may be lower, so are the overheads.
“Lower rent and lower wages bills mean lower fixed costs and greater profitability. But in a franchise, you still get the same level of training, marketing, buying power and support, wherever your business is located. That’s a big plus.
“In many sectors, regional franchisees face less competition, both from other franchised brands and from independents.
“Also, because other costs, such as housing, are lower in most centres, franchisees don’t need to take as much out of the business to cover everyday living costs. They can reduce debt faster and re-invest as required.
“All these benefits add up. Factor in the double disadvantages of Auckland’s high property prices and all-day traffic jams and the appeal becomes obvious,” says Lord.
Eighteen years ago David and Christine Archer cashed in their Whitford home in order to buy a Guthrie Bowron business in Wellington, well ahead of the present housing boom.
Interior of the Guthrie Bowron shop.
The couple, who have systematically built up and improved the business in that time, now have plans to retire in Wellington. They still find the city endlessly stimulating.
The Archers have placed their award-winning business on the market, through ABC Business broker Gerard Dunne.
“I was in a corporate position in Auckland which involved research into future population trends,” says David Archer. “Present dire population pressures in Auckland were forecast even back then, so we saw the light — sold our home and shifted to Wellington. But today it’s even easier to do what we did,” he says.
With a background in sales and marketing, and an interest in home renovating and decor, the Wellington newbies jumped feet-first into their home decor store.
“We lacked previous experience in the business but we did have plenty of enthusiasm and learned fast,” says Archer.
They now have tens of thousands of happy customers and 18 years of solid revenue and profitability behind them, says Gerard Dunne.
The Archers are ready to retire to their home just north of Wellington.
“They will leave the business on a rock solid footing, serving the population of a very cool Capital City, where property and construction markets are also now booming.”
Dunne says the Guthrie Bowron store is well-established, operating in a strategic location in central Wellington. It services one of the most well educated and remunerated populations in New Zealand. Sales and profitability are strong and the staff highly trained. “The business is supported by a franchise that has a clear sense of where it is heading, and focused on growing core categories within the business to build on the complete decor solution for which it is renowned.”
Loyal customers and high repeat business are key to the success of this business, he says.
The well fitted-out store holds destination “status” next to other national retail and trade brands and comes with a new lease, says Dunne.
“This business is immune to web-based competition. With an 18-year sales record, an enviable reputation and the solid Capital City economy, it will go much further under new leadership.
“David and Christine believe new blood is required to take the business to the next level. A new owner with a genuine interest in home and decor and good vision, could make it even more distinctive, they say.
“There’s so much room for additional growth through category and product expansion, smarter communication with current and future customers, improved inventory management and systems enhancement,” says Dunne.
“So if you’re an Auckland couple planning your escape, maybe its time to turn those dreams into reality.”