Improving business efficiencies has come on top as the paramount goal for Kiwi small businesses, according to a new report from Xero, which also reveals small businesses recognise technology is a tool for success.
Improving inefficiencies, increasing profitability, and spending less time on the business were revealed to be the main concerns in the Xero Small Business Growth Report.
According to managing director of Xero New Zealand, Anna Curzon, business confidence and optimism is on the rise. However, despite more positivity, there is still the same appetite for growth, with only a third (33%) of New Zealand small businesses actively trying to grow.
What remains a constant for the majority of small businesses (68%) is the need to do more with less; essentially, the need to improve business efficiency.
“When we asked small businesses what activities they were undertaking to reach their business goals, most were focused on either expanding their customer base or increasing sales with existing customers,” Curzon says.
“More than two thirds of small business know they could improve the efficiency of their business. Nearly half getting by without any business accounting tools and less than one in ten businesses using a payroll system, but these are some ways businesses can score some easy wins,” she explains.
The report also revealed that 34% of small businesses recognise technology is a tool for success. Yet they are leaning on devices like printers and/or fax machines (77%), and smartphones (74%), rather than software to make their businesses more efficient. Only 10% of small businesses used any debtor management systems and only one in five businesses have any job management or invoicing system.
“Small businesses need better business engines to drive efficiency and set themselves up for the growth they want to achieve, whether it’s with planning, financial management or technology,” adds Curzon.
The survey also found 59% of small businesses used Facebook, despite only 6% trusting it for business advice. Four per cent of small businesses also use Snapchat, and trust for this is incredibly low.
“Compare this to businesses that use an advisor,” Curzon says.
According Xero, 85% of small businesses on the Xero platform receive advice from an advisor, and 74% of them use accountants. Businesses that use an advisor grow their net profit by 23% more than businesses who don’t - over a two-year period.
Curzon says accountants and bookkeepers have a huge role to play in driving the small business economy.
“If small businesses embrace the right tools, they will be able to do more with less. We need to help small businesses find the right tools and plans best suited to their business and leverage experts to guide them,” she explains.
“Improving efficiency not only helps set small businesses up for growth, it also helps them manage their growth and make the most of it,” she says.
“This is beneficial for the business owner and the New Zealand economy.”