Social enterprises: Thankyou Payroll

Lani Evans, CEO of Thankyou Payroll. Photo / Jonny Knopp, Peanut Productions

Small business editor Caitlin Sykes this week interviews a handful of people running social enterprises about what they do and how they do it.

Lani Evans is CEO of Dunedin-based social enterprise Thankyou Payroll, which has six staff and recently opened another office in Wellington.

What does Thankyou Payroll do?

Thankyou Payroll was set up in 2010 and provides free, cloud-based payroll intermediary services to SMEs and charities all around New Zealand. We do all the things you'd expect of a payroll intermediary, like calculate PAYE, track leave allowances, send out payslips, file IRD returns on behalf of our clients, but we do it at no cost to the user.

Where did the idea for the business come from?

Hugh Davidson, who's now our CTO, came up with the idea for the business when he was working as a service designer at the IRD. The IRD has a subsidy programme for payroll intermediary services, because the work we do helps to increase their efficiencies. Hugh saw the possibility of leveraging that subsidy, which makes up 80 per cent of our revenue, to create a social business.

What's the 'social' aspect of the business?

I think the 'social' aspect of the business for us is really about holistic thinking - how we create value for everyone and everything we interact with. It's something we're always working to improve.

At the moment we have five areas we concentrate on. For the business community we provide free online payroll services; for the government we provide on-time, accurate taxation data; for the environment we have a carbon offsetting programme; and for staff we have a focus on creating a positive work environment, with collective decision-making, above living-wage salaries, five weeks of holidays per year and extra feel-good factors, like good coffee, Nerf guns and an office dog.

My favourite part of our mahi though, is the community grant-making programme. We donate 25 cents per person, per pay - out of the business' own pockets - and give out small grants to community organisations through the Thankyou Charitable Trust.

The organisations that have received grants are really varied - schools, parents groups, community halls, food rescue organisations. Our most recent grant allocation in Christchurch gave grants to 12 organisations, including the Christchurch Migrants Centre and the Youth Alive Trust in New Brighton, who also happen to be customers.

It's a real privilege to hear the stories of people working in the community and it's a real motivator for me personally - the more successful the business is, the more we're able to support people doing good things around New Zealand.

The business has been going for almost five years. What have been the primary challenges in growing the enterprise during that time?

I think the biggest challenge for us was around convincing people that the generosity-based business model was legitimate. Initially there was a lot of scepticism about the quality of a free product, and the first question a potential client would ask was 'what's the catch?'. That's something we almost never come across anymore and I would attribute that to the development of our public profile, a consistent history of good service and the support of some really wonderful bookkeepers and accountants around the country.

The business has grown to the point you recently opened a second office in Wellington. What primary factors do you attribute to your growth, particularly as a social enterprise?

I think there are three factors that have really contributed to our growth. First and foremost, a good social enterprise is also a good business, with a reliable revenue stream and a product that generates social or environmental outcomes. We're in a perfect niche where the IRD subsidy scheme provides us with the revenue base we need to operate a successful social business.

Secondly, it's the people. We're a values-based company and that has attracted a wonderful team who contribute a huge amount to the direction and success of the business.

And finally, of course, are the people who use our product. We grew just under 400 per cent last year, almost entirely through word-of-mouth. The quality of the product, the negligible costs and the warm-fuzzies people get through the grant-making programme mean that our customers are happy to talk about Thankyou Payroll. We strive to be generous and we appreciate their generosity in turn.

What's next for Thankyou Payroll, and ultimately what would you like to see it become?

It feels like a real place of possibility for us at the moment. We've got very steady organic growth, we've got a strong team, we've expanded into a Wellington office and we've just hired a fantastic new CEO to replace me - I'll continue to be a director of the business and chair of the charitable trust. Ultimately, we'd like to have a 10 per cent market share in the next 18 months, a much higher profile for the Thankyou Charitable Trust and our grant-making model.