Why there’s reason to start 2019 with a smile
State of the nation for New Zealand’s small businesses: why there’s reason to start 2019 with a smile
Two thirds (64%) of SMEs surveyed want to expand in 2019
41% hope to become exporters
But 25% fear the doomsayers’ negative commentary will become self-fulfilling
AUCKLAND, 28 NOVEMBER 2018 - New research flies in the face of business confidence surveys, showing a desire for growth among small businesses, with innovation and exporting firmly on their minds.
Nearly two thirds (64%) of Kiwi small businesses surveyed want to expand in 2019, according to an independent study commissioned by Xero. They are keen to take on more staff, invest in technology, introduce environmentally conscious initiatives, and tap into overseas markets.
However, they say they are being pegged back by difficulties getting finance, initially to start their businesses and then to expand.
The challenges are made tougher by frustrations over stories about business confidence fuelling negativity. One in four (25%) fear the commentary will become self-fulfilling as businesses are put off making decisions that could support growth.
Craig Hudson, Xero’s Managing Director for New Zealand and Pacific Islands, says we need to stop talking things down and focus instead on what will help small businesses to grow.
“This research backs up what we’ve been hearing from small businesses all year. They want to become better employers, embrace innovation, and they understand that success lies in their hands, more than on the state of the economy in general.”
Even so, they’re buffeted by pessimistic chatter that can undermine their determination and create nagging doubts. One in six say negative commentary in the media has impacted how they run their businesses, with younger people most likely to be influenced: almost one in three 18-34-year-olds say it affects the decisions they make.
Hudson adds: “Younger entrepreneurs obviously don’t have the same years of experience as older operators, so we need to give them the confidence to back themselves and ignore the chatter.
“If we can help small businesses do what they want to do, give them the information, tools and support they need, instead of frightening them into paralysis, then the outlook for economic growth is positive.”
When it comes to expansion, capital is key, with 60 per cent saying they would be able to grow their business if they had easier access to more funding.
However, there are ways they can help themselves: only around one in three (37%) have a written business plan, which would be a good place to start for business owners with growth on their mind.
It’s not just loans that they are looking for. Almost half of small business owners would like more funding packages from the government (particularly among 25-44-year-olds), while two thirds want more tax breaks (more so for 55-64-year-olds).
New Zealand’s economic success is linked closely to earning more from our exports, so it is encouraging that the research found 41% of SMEs want to become exporters, with nearly one in four (23%) hoping to do so within the next five years.
One in ten said they can’t grow without it and a quarter said it was a core part of their business plan.
Hudson says: “It’s fantastic there is a desire among small businesses to sell to the world and as a country we need to find a way to make this happen, as it will benefit all New Zealanders.”