Small businesses in New Zealand are more successful than ever, with many turning over upwards of half a million dollars annually.
Now 28% of New Zealand small businesses are making $500,000 or more, up almost 14% since 2011, according to analysis from Xero.
Xero says an increased understanding of technology and a renewed confidence in the economy are significant factors for growth. Technology in particular increases efficiencies in processes and production output.
On top of this, Xero says half of the 600,000 small businesses in New Zealand generate an annual turnover of more than $180,000.
The official Ministry of Business, Innovation and Employment’s 2014 Small Business Sector Report states there are around 460,000 small businesses operating in New Zealand, and these small businesses contribute about $56 million annually to the economy, which equals 30% of NZ’s Gross Domestic Product (GDP).
Xero’s analysis shows there are about 150,000 small businesses who weren’t included in the report as they don’t meet the minimum criteria of $30,000 turnover, and these businesses bring in an additional 10% revenue.
Victoria Crone, Xero, managing director NZ, says the contribution of small business to our economy is significant.
“The fact that we are seeing this growth in the sector is a strong indicator of the drive our small businesses leaders have to advance and excel, and that’s good news for the country’s economy going forward,” says Crone.
She says technology is one factor that is adding to growth.
“We’re seeing the smaller businesses taking advantage of technology too, despite the size of their business, and using tools like Xero to manage their finances,” says Crone.
Crone notes the success of small businesses today.
“According to the 2014 World Bank Doing Business Report, New Zealand is ranked first in the world for starting a business and investor protection, so there really is no better time to think about starting your own business,” she says.