Small businesses keep the New Zealand economy running

Helping them to achieve their ambitions should be a focus for all of us interested in the success of the New Zealand economy. They make up 97% of all New Zealand enterprises (that’s 459,300 businesses) and make a substantial contribution to New Zealand’s employment and economy – employing 584,000 people and contributing about $60b to New Zealand’s GDP each year, that’s nearly 30% of the total GDP!

These 459,300 businesses include zero (no employees), micro (1-5 employees) and small (6-19 employees) enterprises.

When referring to small businesses we mean zero, micro and small businesses combined.

The government recently published a report on small businesses in New Zealeand in an effort to help business people, academics, policy makers and media commentators understand the New Zealand small business sector. The more we understand the sector, the better equipped organisations like ASB can be to help small businesses achieve their ambitions.

In order to meet the goals of the Business Growth Agenda New Zealand needs to help and encourage enterprises of all sizes to operate at their peak potential.

Number of New Zealand enterprises in 2013 categorised by employee numbers

• Zero (0): 326,000
• Micro (1-5): 97,400
• Small (6-19): 35,900
• Small-medium (20-49): 8,800
• Medium (50-99): 2,640
• Large (100+): 2,120

New Zealand’s small population can limit the growth of businesses domestically so it’s vital for them to be able to grow internationally.

Many small businesses struggle to begin exporting overseas as they face many new challenges that they haven’t had to deal with before. Some of these challenges might be having to rapidly scale-up the size of their production to meet overseas demands, dealing with foreign exchange rate risk, or managing the lag between receiving an order, managing the costs of fulfilling it, and then receiving payment from their customer which could be months down the track.

The report found that limited experience is the most common barrier for small businesses wanting to export.

This is where the support of those more experienced organisations can help – if you want to start exporting overseas, it’s a good idea to get in touch with an organisation like New Zealand Trade & Enterprise who can provide advice on what to look out for in specific overseas markets.

Ambition

The report found that more than a third of small business owners started their business for lifestyle reasons. And over 20% started it as an investment strategy for the future. These ideas ring true with our customers as well last year we found that the majority of our business customers wanted businesses that delivered great results and success but they also wanted the lifestyle of self-employment. One of our respondents said their ambition was to have “enough freedom to do what I want when I want, and to help who I want.”

Innovation

Although, according to the report, small businesses tend to spend less on research and development than large businesses, innovation is an important focus for ASB and for our business customers. The report shows that across the economy, innovation is crucial to productivity growth. So it’s our ambition to help you succeed by providing innovative solutions which you can integrate into your daily business operations.

A great way to encourage innovation is to set up processes that allow you to spend time working on your business, rather than working in your business. We’re here to help you with this and to make everyday business tasks easier. Read these blog posts to learn more about how ASB can help you: Xero & ASB integration, how technology makes managing your business easier, funding for small businesses and 7-day settlement.

It’s also a good idea to keep up-to-date on your industry and the New Zealand business sector – here on the blog we share tips, tricks and stories from experts and other business owners.