ADVOCATE COLUMN 2nd WEEK JUNE 2017
Most of us are aware that New Zealand is a one of the easiest countries in the world to start a business, that many start up businesses fail in the first two years and that the business landscape is dominated by very small businesses or those businesses that do not actually employ anyone. In fact of the approximately 515,000 enterprises that exist in New Zealand today, almost 363,000 employ no workers and a further 99,000 odd employ less than 5 workers. While these businesses not surprisingly do not feature as strongly as larger businesses in the job creation stakes, on a positive note there number of small businesses that employ is growing with more businesses entering the market than leaving. Having said that survival rate of businesses employing less than 5 workers is only about 50%.
These enterprises are less likely to be involved in research and development and are also less likely to be involved in export which also is hardly surprising since most of these enterprises are engaged in sectors which do not traditionally or naturally aspire to engage in these pursuits. They may also not have any business aspiration any higher than to have a sustainable business. So here lies the challenge. Much government focussed support for business growth is focussed on businesses aspiring to substantial growth, part of the export supply chain or engaged in research and development. Outside the likes of Business Mentors New Zealand, Te Wananga o Aotearoa, individual industry training bodies, professional associations or business organisations such as Chambers, it can be difficult for many businesses to access any form of meaningful support. Having said that the support provided any the above may be all that is needed in the first instance and once the realisation comes that there can be more to business than mere survival then further access to more formal channels of capability building may be open.
It will start with the business owner realising that they need some kind of help even if they do not know what sort of help they need. Generally there is sufficient collaboration and interaction between various organisations within the region to ensure that whatever support is needed is provided. Why is it important that this group have access to support? Because in 2016 the survival rate of businesses with zero to 5 workers was only 45%. Anything that can reduce this mortality rate will by its very nature grow the number of businesses and number of workers even if the individual enterprises do not grow their numbers of workers