SMEs are important part of the New Zealand economy. According to the latest data from Statistics New Zealand, they account for 97 per cent (487,602) of all enterprises, 29 per cent (599,880) of all employees and an estimated 26 per cent of New Zealand’s Gross Domestic Product. Let’s take a look at some of the things inhibiting small businesses in New Zealand.
An overwhelming half of SMEs in New Zealand are jeopardising their business with zero online presence. The internet is generally one of the first things we look to for research about a product or service, whether it be by typing in Google or seeing an advertisement while browsing the web. In the digital age we live in if you are not online you are risking the loss of potential revenue, but still too many SMEs in New Zealand are not online.
According to MYOBs Business Monitor survey of 1000 SMEs, almost 60 per cent of small businesses that are online experience an increase in customer enquiries, so the benefits are obvious. Furthermore, more than 50 per cent say that customers found that it is easier to do business with them and this directly impacted their bottom line with 31 per cent saying revenue increased as a result of being online. A barrier to being online however was because managers simply did not have the time to manage an online presence.
According to an Auckland Chamber of Commerce survey of over 100 Auckland businesses, getting the right talent or staff with the suitable skills and qualifications are the top issues businesses are currently facing. More than 50 per cent said they were having difficulty getting the right talent.
Finance for business remains one of the biggest challenges to SME growth in New Zealand and is of primary concern for owners and managers. This is also happening to small businesses in the UK. Peer-to-Peer (P2P) lending has become a viable option and is currently trending in New Zealand for SMEs. P2P is an online process where people who want to borrow are matched with those who want to invest or lend. It essentially avoids banks, avoids overheads and can provide better interest rates for borrowers and lenders. But what is driving this trend? The technology behind P2P distinctively brings people together, directly online. It cuts out the middle-man investors or lenders where its popularity is fuelled by lower interest rates and where other options of investment are not so attractive. For SMEs, P2P lending can offer an easy alternative to finance to purchase assets or obtaining working capital to funding expansion. Is P2P lending right for your business?
SMEs are extremely important for New Zealand’s economy and with these trends and challenges, it is important for SMEs to understand and take advantage of the opportunities arising and make contingency plans for the threats and weaknesses that have come to light.