SMBs buck trends found in 'negative' business confidence reports
Numerous ‘business confidence’ surveys this year haven’t coloured the outlook for many New Zealand SMBs and they’ll continue to push towards expansion over the next year.
According to a survey from Xero, 64% of 1029 polled SMBs say they want to expand in 2019; with many excited to recruit more staff, invest in technology, introduce more environmentally-conscious initiatives, and explore overseas markets.
“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,” says Xero New Zealand and Pacific Islands managing director Craig Hudson.
But there are still a few worries lurking in the background according to respondents. These include difficulties accessing finance to start and expand their businesses.
In some cases stories about business confidence are fuelling negativity, with 25% of respondents believing that the negativity could become self-fulfilling as businesses delay growth initiatives.
One in six say that negative media commentary has impacted how they run their businesses, with those age 18-34 most affected.
“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,” says Hudson.
He believes New Zealanders need to stop thinking negatively and focus on what can help businesses grow.
“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.”
Sixty percent of respondents say that easier access to funding would help their business expand, which suggests that capital is key.
Xero says that one way SMBs can help themselves is by creating a business plan. Only 37% of respondents have one.
Almost half of small business owners would like more funding packages from the government, with those aged 25-44 most interested. Two thirds would like more tax breaks – those aged 55-64 were most interested.
SMBs are realising the potential of export markets. One in ten said they can’t grow without it and a quarter said it was a core part of their business plan.
41% of polled SMBs want to become exporters; while 23% are aiming to become exporters in the next five years.
“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,” Hudson concludes.