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Investment in business owners capability pays off

Media Release
7 October 2014

Research shows investment in business owners capability pays off

Statistics just released by business growth centre, The Icehouse, show growth rates for established businesses who have invested in Icehouse business growth programmes are over two times higher than the average for NZ businesses[1].

In May this year, The Icehouse conducted research on their programme alumni growth rates[2]. The average year on year increase in revenue for these businesses is at 11.7% compared to 4.5% for NZ overall[1].

Andy Hamilton, CEO of The Icehouse, says that investing in the capability of the owners and people who run the business has a “significant and positive impact. New Zealand businesses need to invest in the people who are driving the business. And our research shows that this should be a priority.”

The Icehouse works with a wide range of established businesses, from one man bands to businesses with over 300 staff[3]. Before participating in an Icehouse programme, every customer provides key business metrics which include revenue and the number of employees.

Results from this research show:

StatisticIcehouse Alumni AverageNZ Business Average
Revenue growth11.7% year on year (over 2x faster than the NZ norm)4.5% year on year1
Export revenue28% of all revenue8% of all revenue
Export revenue growth14.3% year on year9% year on year4

Impressively, before working with The Icehouse only 8% of these alumni report having export revenue and this increases to 36% post-programme.

Hand in hand with revenue growth is the creation of jobs. Icehouse established alumni have an average year on year increase in FTEs of 6.3%. In productivity terms, (revenue per employee) in their first year post programme, Icehouse alumni leap from an average of $267,000 per employee to $478,000 per employee.

Lastly, in previous year’s, survey results have shown that Icehouse established alumni triple their profit every four years.

Hamilton says “the results speak for themselves. Too often we see New Zealand business owners too focussed on the day to day operation of the business when they need to step away and develop their skills, seek external advice and develop a plan to drive the business forward.”


ENDS

Notes to the editor:
For more information on this, please visit www.theicehouse.co.nz/impact

[1]Data from the Annual Enterprise Survey available on the Statistics NZ website. http://www.stats.govt.nz/browse_for_stats/businesses/business_finance/annual-enterprise-survey-info-releases.aspx
[2] 409 out of 1,624 established business alumni responded to the survey
[3] Before engaging with The Icehouse, approximately 53% of alumni have 20 or fewer full time employees (FTEs), a further 28% have 20 – 50 FTEs and 19% have more than 50 FTEs. As to revenue, approximately 32% have less than $1mil, 21% have $1-5mil, 26% have $5 – 10mil and 21% have greater than $10mil.

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