My Account
Definition
The Ministry of Business, Innovation and Employment defines a small business as one employing fewer than 20 employees.
Living the self-employment dream
Small businesses form the backbone of the NZ economy, representing 97 per cent of all business enterprises and employing 30 per cent of all Kiwi workers.
But as anyone who has started or bought a business knows, it is not for the faint-hearted. The self-employment dream can quickly turn to a nightmare when long hours are only rewarded with escalating bills and little sign that a healthy work-life balance will ever be achieved.
According to Statistics NZ, of the enterprises that started in February 2014, 85 per cent survived their first 12 months. However, in the longer term, only around 27 per cent of enterprises survived to celebrate their first decade.
The 10-year survival rate varied significantly across industries – 36 per cent for financial and insurance services at the higher end, and 18 per cent for information media and telecommunications at the lower end.
The sectors employing the most people are retail trade, health and professional services – combined, they employ 27 per cent of all workers.
In a snapshot from Statistics NZ taken in February last year, for every 100 enterprises in New Zealand, there were 12 start-ups (births) and 11 closures (deaths).
Sole traders (with zero employees) reported the best work/life balance, with a 55 per cent satisfaction rate.
On the following pages, we’ve talked to some local entrepreneurs to see how they have travelled through their first five years in business.
Resources at your fingertips
There is a wealth of information online to support small business owners. Here’s a few to start with:
business.govt.nz
This is a great site for employers who want to check that they are meeting their HR responsibilities. There is also information on what a new business is required to do by law, as well as tax and finance tips.
nzentrepreneur.co.nz/resources
This site provides an index to a range of information and content, from around NZ and overseas.
cab.org.nz
The Citizens Advice Bureau does a great job of giving people advice on a whole host of issues, including what financial assistance a small business may be entitled to and where to go to find out more.
bizbuzz.co.nz
Who better to give advice on small business than small business owners? This site curates information, resources and tools from Kiwi business owners.
theshapeofmoney.co.nz
Again, this site is a helpful directory of where to go to find what you are looking for, with an emphasis on the financial side of running a business.
ird.govt.nz
There is no avoiding tax so you may as well be well informed on what your responsibilities are. There’s a dedicated section for businesses and employers which covers receiving income, GST, employing staff and doing business overseas.
Small enterprises need good HR systems
By Joy Paxton
Being small is no excuse to be sloppy, shabby or unprofessional. I regularly see business owners at the five-year point either enjoying growth with outstanding performance and results, or struggling to grow the business and not really enjoying their work.
With this latter group, there are some common themes in their systems and processes. Often they have one or all of the following:
- No human resources (HR) plan to sit alongside the business plan
- Poor hiring and termination processes
- An inability to deal with low and poor performance quickly
- Poor communication systems with employees, suppliers and customers
- Find legal compliance an obstacle to getting the business done
This clearly wastes a huge amount of time and money, but fortunately, it does not take huge amounts of time and money to change the way these practices are managed.
Just as every big business started out small, and grew through their management, development and implementation of systems and processes, a small business can easily achieve this growth and success by adopting this approach.
A professional look and feel to the business is paramount. Successful big businesses look and feel professional and if your business is not professional, perhaps it is amateur? Let’s remind ourselves that professionals are paid handsomely and amateurs are not.
Time restraints are a real drain on small business and as the business grows, owners need to plan for a future that frees up their time. This could involve accessing outside advisers.
Joy Paxton provides a wide range of human resource services to growing and successful local business owners. This is her ninth year in business locally.
