The Small
Business
Sector Report
2014
ONLINE: 978-0-478-41790-6
2
The Small Business Sector Report 2014
INTRODUCTION
Minister’s foreword
1
I am pleased to present this report on the diverse and important small business sector
in New Zealand.
Some 97 per cent of enterprises in New Zealand are small businesses.
These 459,300 enterprises include those with no employees, micro
(1-5 employees), and small (6-19 employees) enterprises. Small
businesses make a significant contribution to the New Zealand labour
market, with more than 584,000 people employed in enterprises with
fewer than 20 people, making up 30 per cent of the workforce. These
figures do not include self-employed, which number over 380,000.
Small businesses have a distinct role to play in the New Zealand
economy and often provide a means of entry into business for new
entrepreneurial talent and a career for those who value economic
independence. Small businesses also act as specialist suppliers of
parts, components and services to large companies. Small businesses
contribute to variety and consumer choice for customers by serving
niche rather than mass markets. They provide an important source of
innovation and invention, something that all economies require.
This report provides an overview and snapshot of the small business
sector in New Zealand, with a focus on the Business Growth
Agenda (BGA) and how it affects small business. The report includes
international comparisons, international trade, innovation, ICT and
a summary of small businesses from the perspective of different
industries nationally.
More than 100 government initiatives support small businesses.
These include actions in the BGA and Result 9 work programme which
help many small businesses. Many of the initiatives the Government is
implementing through its BGA are focused on helping businesses
access the key ingredients they need to grow and succeed.
Hon Steven Joyce
Minister for Economic Development
Minister for Small Business
Minister of Science And Innovation
Minister for Tertiary Education, Skills and Employment
Associate Minister of Finance
The BGA aims to create this environment by focusing on the
elements businesses need to be productive and competitive. Many
BGA initiatives will benefit small businesses by reducing their costs,
saving time, and increasing their competitiveness and opportunities
for growth. Small businesses benefit from an environment which
gives them confidence to invest and grow. The BGA is creating a
competitive and productive environment which supports both
export-focused and domestically-focused businesses.
Businesses can also be more productive when they spend less time
and energy dealing with government. The initiatives under Result 9:
Better Public Services for Business will significantly benefit small
businesses, which typically face resource and time constraints, by
making their interactions with government easier and reducing their
need to contact multiple agencies.
Many businesses have limited experience in expanding overseas. The
Government has set an ambitious goal for New Zealand to increase the
ratio of exports to GDP from the current 30 per cent to 40 per cent by
2025. The Government is working to ensure that rules, regulations and
policies assist small businesses and other New Zealand businesses to
take advantage of international opportunities.
It is intended that this report will be read by a wide range of
stakeholders in the sector, including business owners, government
agencies and academics, and will be a key resource that showcases
the state of the small business sector in New Zealand. Small
businesses are the cornerstone of the New Zealand economy and the
Government is committed to creating an environment to assist all
businesses to invest, grow and succeed for the benefit of all
New Zealanders.
3
The Small Business Sector Report 2014
Contents
1
Introduction6
2
Overview of small businesses
in New Zealand
3
Focus Areas
35
4
Industry Profiles
55
5
Further reading 103
11
INTRODUCTION
Report Objective
1
The Small Business Sector Report 2014 is a
new government publication that provides a
factual source of information in an accessible
format on the small businesses that make up
a large part of the New Zealand economy.
New Zealand needs to encourage firms of all sizes to operate at their
peak potential to meet the goals of our Business Growth Agenda.
The report does not intend to draw policy conclusions. Its aim is
to provide an overview of New Zealand’s small business sector for
business people, policy makers, media commentators, economists,
academics, students and anyone with an interest in New Zealand’s
economic development.
6
The Small Business Sector Report 2014
460,000 38
%
number of small businesses in NZ
self-employed who are female
Small businesses employ
584,000
people
326,000
%
69
small businesses have no employees
That’s
of all firms in NZ
Age of majority of self employed
people: 30s, 40s and 50s
There are around three times
more in these age groups than
all others combined
The proportion of
More than
1/3
rd
The number of Rental, Hiring and
Property Service firms
of small
business owners report starting
their business for lifestyle reasons
Service firms
since 2000 is
Total employment in Agriculture,
Forestry and Fishing small
businesses is the highest of
all industries
Growth in
Professional
100,000
>30
Mining and Petroleum
%
Southland: The region with
the highest concentration of
Agriculture, Forestry and
Fishing small businesses
The industry with the highest
Pharmacists are the most
value added per employee
common Retail sole-operator
INTRODUCTION
Executive summary
1
General
Business and Employment
economic Performance
Some 97 per cent of enterprises in New Zealand are small businesses.
These 459,300 firms include the 326,000 with no employees, 97,400
micro (1-5 employees), and 35,900 small (6-19 employees). The number
of employing enterprises in New Zealand has not changed noticeably
over the past decade and the high proportion of all enterprises that are
small businesses is similar to the pattern found in most OECD countries.
Since 2000, some territorial authorities have seen a high growth rate in
the number of small businesses. For example, the Queenstown-Lakes
District has seen higher increases in the number of zero employee, micro
and small enterprises than other areas.
Small businesses contribute nearly 30 per cent of New Zealand’s GDP.
Despite the global recession, an increasing number of small businesses
report improving profitability and increasing average wage and salaries
paid to employees. The ability of SMEs to access finance, be it debt or
equity, has remained solid throughout the global financial crisis.
Over the past decade, the total number of births of enterprises
with fewer than 20 employees has fallen while the total number of
deaths has increased. However, more than 90% of these have had no
employees. If the zero-employee enterprises are removed, micro and
small business turnover has been relatively steady, with slightly more
births than deaths of employing micro and small businesses over the
last ten years.
The numbers of zero-employee, micro and small enterprises in each
region is proportionate to the region’s population. Not surprisingly, the
largest numbers are found in the regions with large urban centres,
particularly Auckland, Canterbury, Wellington and Waikato.
Small businesses are represented in every industry and every part of
New Zealand. In some industries or sub-industries they proliferate in
all parts of the value chain, while in others like health or mining, they
are a smaller but complementary part of value chains.
Most enterprises with fewer than 20 employees are managed by the
owners. Limited liability companies are the most common ownership
structure for all enterprises. However, there are also significant
numbers of other structures for smaller enterprises, such as individual
proprietorships and partnerships. In general, the complexity of
ownership structures tends to increase with firm size.
Much of the growth in small enterprises has been in the South Island,
in places such as Hurunui, Selwyn and Queenstown-Lakes District.
Over the same period, Ruapehu and Wairoa have experienced a
decrease in the number of small enterprises. These changes reflect
population shifts.
Small firms make a significant contribution to New Zealand’s
employment with 584,000 people employed in enterprises with fewer
than 20 people, making up 30 per cent of the workforce. These figures
do not include self-employed, which number over 386,000. The total
number of employees in New Zealand businesses with fewer than
20 people has not changed noticeably over the past decade. In contrast
there has been significant growth in employment in larger firms.
The Small Business Sector Report 2014
International Trade
New Zealand’s small population constrains the ability for New Zealand
businesses to grow domestically. The ability of businesses to enter
overseas markets is critical as it enables New Zealand businesses to
access larger markets.
Small businesses have higher birth and death rates than larger firms
and size has distinct effects on survival. For example approximately
25 per cent of zero-employee enterprises on average are still operating
after ten years, in contrast to about 50 per cent of businesses with
10-19 employees.
It is more common for large firms to generate overseas income than
small businesses, but more than 75 per cent of all firms have never
generated overseas income. Many types of small businesses cannot
export their goods and services, including general practitioners and
traditional retailers.
Over the past decade, the number of self-employed in the 20-29 and
30-39 age groups has steadily decreased. Numbers have increased in
the 50-59, 60-64 and 65+ age groups. Other data show a decline in the
number of self-employed leaving their business since 2009, particularly
the 30-39 and 40-49 age groups. This suggests more are staying in
business longer, but in the 30-39 age group fewer people are becoming
self-employed.
The level of international engagement is positively associated with
firm size. This is consistent with most small businesses reporting that
they either cannot or are not interested in exporting.
Small businesses tend to have higher worker turnover rates than larger
firms. This is likely to be related to the reduced scope for internal career
progress compared to larger firms, and the seasonal nature of some
industries where small businesses are prevalent. It may also reflect the
higher proportion of part-time and casual workers employed.
8
In the next few years, strong domestic economic growth, improving
international economic growth, strong business and consumer
confidence and a continuation of the ability of small businesses to
access finance should provide the conditions for small businesses to
invest more strongly in innovation and expansion.
The most common source of overseas income for small businesses is
the sale of goods for use by other businesses (B2B). This suggests
they are more likely to be involved in supply chains rather than
directly selling to end users.
Limited experience in expanding overseas is the most common barrier
to small businesses wanting to export. The most cited barriers
revolve around the unfamiliarity of operating in a different country.
The ability to rapidly increase supply for exporting was not perceived
INTRODUCTION
1
as a common barrier to trade. Trade promotion agency New Zealand
Trade and Enterprise (NZTE) supports businesses that want to grow
and succeed internationally. Its services focus on refining strategy,
improving performance, building global networks and providing
in-market support. On average SMEs comprise around 80 per cent
of NZTE’s customer base
Innovation and E-commerce
Across the economy, innovation is key to the productivity growth,
which dictates income levels and living standards. Small firms
innovate less than large firms, but innovation is an important factor in
maintaining competitiveness irrespective of firm size. At least 40 per
cent of firms of all sizes in the 2013 Business Operations Survey
reported they had innovated that year.
Compared to large firms, smaller firms focus more of their innovation
investment on marketing. This could be because the need to market
and sell is universal and the barriers to undertaking at least some
marketing activity are low.
Differences between kinds of specific innovation activity appear to
be more important than firm size – all firm sizes appear to focus on
broadly the same areas. The most frequently reported activities are
acquiring computer hardware and software, and employee training.
Although small businesses report innovating by marketing more,
market research is not a common mechanism with firms more likely
to gain insights directly from customers or suppliers.
Barriers to innovation for small businesses include difficulties
finding staff with the right skills and experience at a similar level
to larger firms. All firms have in common similarly high barriers to
developing or introducing a new product or service, followed by
lack of management resources.
E-commerce is becoming increasingly important to most businesses.
As with innovation, larger firms are more likely to have websites and
make greater use of the internet more generally. But similarities and
differences among firms are more interesting when we consider
particular activities and uses. For example, for firms reporting using
the internet for finance purposes, even the absolute difference by
firm size appears to be limited, possibly reflecting the near universal
uptake of online banking.
The availability of features on the websites of smaller firms appears
to be more closely related to the costs of implementing them or their
relevance than for larger firms. This is more noticeable for processes
which involve significant costs, such as online payment or ordering
systems and online after-sales support.
Smaller firms report very high use of online channels to interact with
government, and the differences with large firms are less marked
than in other areas and even negligible in some areas such as online
payments. This suggests extensive efforts by government to provide
more online pathways, and for these to be more convenient for
business, are valued by small businesses.
Ease of Doing Business
New Zealand has been ranked third in the world for ‘ease of doing
business’ in the 2014 World Bank Doing Business Report. Only
Singapore and Hong Kong are ranked higher than New Zealand, but
we rank first in the world for starting a business and investor
protection. The report is an annual study measuring government
regulations and their effect on businesses across 189 economies.
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The Small Business Sector Report 2014
INTRODUCTION
1
Key terms and data limitations
Defining small business
Defining a business
In this report, a small business is any type of enterprise or firm with
fewer than 20 employees. The sector can be further segmented into
sub-sectors based on firm size where ‘zero’ represents businesses
with no employees; ‘micro’ represents businesses with one to five
employees; ‘small’ represents businesses with 6 to 19 employees.
‘Small to medium’ (20 to 49 employees), ‘medium’ businesses (50 to
99 employees) and ‘large’ businesses (100+ employees) are also used
in the report for comparative purposes. In some limited cases the
underlying data sources do not segment by the same size groupings
and these are noted where they occur.
In this report, the terms ‘business’ and ‘firm’ are synonymous
with ‘enterprise’. These terms refer to a legal entity operating in
New Zealand that includes companies, partnerships, trusts, estates,
incorporated societies, producer boards, local or central government
organisations, voluntary organisations, or self-employed individuals.
SMEs or small to medium-sized enterprises are all businesses with
fewer than 50 employees.
Defining sector
A ‘sector’ is a loose definition to describe businesses or organisations
that share common characteristics and/or produce similar products or
services. In this report, the sector of interest is all small businesses
within New Zealand.
Defining Industry
The term industry is used to describe a group of businesses who are
engaged in similar production activities. Industries are classified using
the Australian and New Zealand Standard Industrial Classification
(ANZSIC) system.
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The Small Business Sector Report 2014
Defining a business unit
The term ‘business unit’ represents a business location engaged in
one, or predominantly one kind of, economic activity from a single
physical location or base in New Zealand. A firm with multiple
locations or outlets (e.g, The Warehouse) is counted as one firm
but multiple business units. ‘Business unit’ is synonymous with
Statistics New Zealand’s term ‘geographical unit’.
Limitations/Scope of data
Generally, firm size (zero, micro, small, etc) has been defined based on
firm employee counts reported from the data source. However, some
data sources report employee count from business units rather than
from the firm as a whole. ‘Business unit size’ has been used to
distinguish business unit employee count size measures from the
firm-based equivalent.
The scope of a business /enterprise includes public entities like
schools, police stations and other public bodies. With the exception
of data from the Business Operations Survey, all data sourced from
Statistics New Zealand (and by extension, data from the OECD) will
include such public entities. While this data is inconsistent with a
focus on small business, it should be noted that in many parts of the
report the effect is quite contained. For example, in the industry
perspectives, data on public institutions are largely confined to the
Health and Social Services, Education and Training and Public
Administration, Defence and Public Safety sections. Data on SMEs in
the other industry sections should be read as substantially covering
commercial enterprises (e.g. Manufacturing, Retail, Construction).
Most of the data in this report comes from Statistics New Zealand
which uses an ‘economically significant’ threshold for its economic
and business measures. Criteria for economic significance vary across
different economic statistics but commonly require the firm to meet
at least one of the following criteria:
1.
Annual expenses or sales subject to GST of more than $30,000
2.
Part of a group of enterprises
3.
Registered for GST and involved in agriculture or forestry
4.
Over $40,000 of income recorded in the IR10 annual tax return
Further information about economic significance can be found on
Statistics New Zealand’s website (www.stats.govt.nz).
2
Overview of
small businesses
in New Zealand
11
The Small Business Sector Report 2014
OVERVIEW
2
Enterprises
As in most other economies, nearly all New Zealand enterprises are small
Number of enterprises in 2013 categorised by employee numbers
Number of enterprises in 2013
Zero (0)
326,000
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
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The Small Business Sector Report 2014
Micro
(1-5)
97,400
Small (6-19)
35,900
Small-medium
(20-49)
8,800
Medium Large
(50-99) (100+)
2,640 2,120
OVERVIEW
2
The number of zero-employee enterprises has increased over the past decade but the number of employing enterprises has been stable
Number of enterprises by firm size, 2000 - 2013
Number of enterprises by firm size, 2000 - 2013
100
Firm Size
(number of employees)
Enterprises (000s)
320
Zero (0)
75
300
Micro (1-5)
Small (6-19)
50
280
Small-medium (20-49)
Medium (50-99)
25
260
Large (100+)
0
2000
2005
2010
2000
2005
2010
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
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The Small Business Sector Report 2014
OVERVIEW
2
Zero-Employee Businesses
Zero-employee firms experiencing strong growth
As the name suggests, zero-employee businesses do not employ
any staff beyond the founder or owner. They play an important
commercial role in the economy. They are easy to establish, and
provide a practical and strategic purpose for a range of industries,
situations and firm sizes.
With some exceptions, they present more change and variability
across many kinds of measurement than other small businesses.
Enterprise survival rates provide a good example of this, with
zero-employee businesses showing much greater attrition over time.
The broad characteristics of New Zealand zero-employee businesses
are more or less common to comparative economies in the OECD.
Zero-employee businesses are also the most common firm size in
the United States, for example, comprising 21 million out of a total
27 million firms.
Zero-employee businesses can include importers, exporters,
manufacturers, plumbers, consultants and start-ups, property
investors, real estate agents and gardeners.
Industry dynamics, market forces and regulations may make it hard to
identify some businesses as zero-employee operations. For example,
a medium-sized dairy farm with five people working on it fulltime can
still be a zero-employee enterprise if those people are share-milkers,
contractors or unpaid family members of the farm owner.
Zero-employee businesses can also serve wider legal, accounting, risk
or tax purposes. It is common practice in the construction industry to
establish companies around particular commercial projects. But in
residential construction, considering the lack of scale, the number of
zero-employee firms probably reflects the high level of sole traders.
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The Small Business Sector Report 2014
Zero-employee businesses may also play a role during corporate
transactions or to manage subsidiary or other special activity.
This is likely to account for the majority of the 500 zero-employee
enterprises each year that report revenues in excess of $100 million.
The number of zero-employee enterprises grew during the mid2000s and has stabilised since the start of the Global Financial Crisis.
This earlier growth may have had several causes. Individuals in the
housing rental industry, where there has been significantly larger
growth off a higher base than any other sector, may have preferred
to use a company structure for tax purposes.
Companies Office data show a decrease in the number of new rental
company registrations from 2010-11. This may be partly attributable
to the change in tax rules relating to loss adjusting qualifying
companies (LAQCs) considering the proportion of LAQCs which were
being used for private residential property investments. There was
also growth in zero-employees in financial asset investing which may
have been related. Management and related consulting activities
have been another growth area of zero-employees, and an area
where there is a relatively high absolute number.
While zero-employees are the most common enterprise size across
industries, the proportion of zero-employees is much lower in certain
areas. For example, at any given time there are only a few hundred
zero-employees in utilities or public administration, compared to
approximately 30,000 in farming and 80,000 in property.
OVERVIEW
2
Small businesses have a diverse range of ownership structures
“All other entities” include co-operative companies, joint ventures and consortia, branches of companies incorporated overseas, government-owned trading entities, central government, local authority trading enterprises,
local government incorporated and unincorporated societies and associations, and charitable trusts.
Type of legal entity by firm size, as at 2013
Type of legal entity by firm size, as at 2013
Large (100+)
Type of entity
Medium (50-99)
All Other
Entities
Individual
Proprietorship
Small-medium (20-49)
Partnership
Small (6-19)
Registered
Limited
Liability
Company
(non Co-op)
Micro (1-5)
Trusts/Estates
Zero (0)
0%
25%
50%
75%
100%
Per cent of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
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The Small Business Sector Report 2014
OVERVIEW
2
Starts and closures in micro- and small
business have been relatively stable.
In contrast, zero employee starts and
closures have been more volatile, with
more closures than start ups since 2010.
Births and deaths for Micro-small and Zero employee firm sizes
Births and deaths for Micro-small
and Zero employee firm sizes
Micro-Small (1-19)
Zero (0)
Count of births/deaths (000s)
60
40
20
0
2004
2006
2008
2010
2012
2004
Births
Source: Business demography statistics, Statistics New Zealand, 2013, custom data.
Notes: All numbers are provisional. Enterprise births and deaths for 2013 should be treated with caution.
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The Small Business Sector Report 2014
2006
Deaths
2008
2010
2012
OVERVIEW
2
The smaller the business, the lower the survival rate
Average enterprise survival rates by firm size
Average Per cent of Cohort Year Surviving
Average enterprise survival rates by firm size
100%
Firm Size
75%
Small-medium (20-49)
Small (10–19)
50%
Small (6–9)
Micro (1-5)
25%
Zero (0)
0%
1
2
3
4
5
6
7
8
9
10
Years
Source: Business demography statistics, Statistics New Zealand, 2013. Access via Statistics New Zealand webpage.
Notes: All numbers are provisional. Survival rate is defined as the percentage of enterprise births in each reference period that survive into future reference periods in the business demography population. For full notes consult source data.
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The Small Business Sector Report 2014
OVERVIEW
2
Distribution
Distribution
Distribution
ofof
business
of
business
business
units
units
units
byby
size
by
size
size
and
and
and
region
region
region
in in
2013
in
2013
2013
Region
ZeroZero
(0) Zero
(0) (0)
Micro
Micro
(1-5)
Micro
(1-5) (1-5)
Small
Small
(6-19)
Small
(6-19)
(6-19)
The location of small businesses
reflects New Zealand’s population
Distribution of business units by size
and region in 2013
Total
Total
Number
Total
Number
Number
of of of
Business
Business
Business
Units
Units
Units
Business units, or geo units, are the physical operating locations
of a business. For example, a business with offices or branches
in three regions will have three separate business units.
1,000
1,0001,000
10,000
10,000
10,000
100,000
100,000
100,000
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
(20-49)
Medium
Medium
(50-99)
Medium
(50-99)
(50-99)
Large
Large
(100+)
Large
(100+)
(100+)
Percentage
Percentage
Percentage
of of of
Business
Business
Business
Units
Units
Units
60%60%60%
40%40%40%
20%20%20%
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. Business units are equivalent to geographic units. For full notes, consult Statistics New Zealand.
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The Small Business Sector Report 2014
OVERVIEW
Growth in number of business units by size and territorial authority
Compound Annual Growth Rate, 2000 - 2013
Zero (0)
Micro (1-5)
2
The number of small businesses is growing
faster in areas of high population growth
Growth in number of business units by size and
territorial authority Compound Annual Growth
Rate – 2000 to 2013
Growth Rate
7.5%
5.0%
Small (6-19)
Small-medium (20-49)
2.5%
0.0%
-2.5%
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. Business units are equivalent to geographic units. For full notes, consult Statistics New Zealand.
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The Small Business Sector Report 2014
OVERVIEW
2
employees
Small businesses employ a significant proportion of the total workforce.
Employee by firm size in 2013
Employees by firm size in 2013
Large
(100+)
916,000
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
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The Small Business Sector Report 2014
Small
(6-19)
358,000
Micro
(1-5)
226,000
Small-medium Medium
(50-99)
(20-49)
181,000
261,000
OVERVIEW
2
Most employment growth has been in large firms, while the number of people employed by small businesses has been stable
Employees by firm size, 2000 – 2013
Employees by firm size, 2000 - 2013
Firm Size
(number of employees)
Employees (000s)
750
Large (100+)
Small (6-19)
500
Small-medium (20-49)
Micro (1-5)
Medium (50-99)
250
2000
2005
2010
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
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The Small Business Sector Report 2014
OVERVIEW
2
Around one third of the small business workforce is part-time
Percentage of employees working full time by firm size
Percentage of employees working
full time by firm size
Per cent full time
70%
Firm Size
(number of employees)
68%
Small-medium (20-49)
Micro (1-5)
66%
Small (6-19)
64%
2009
2010
Source: Quarterly Employment Survey, Statistics New Zealand, 2013. Custom data supplied to MBIE
Notes: The 2009 year is an average of only the September and December quarters
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The Small Business Sector Report 2014
2011
2012
2013
OVERVIEW
2
Small businesses have more workers joining and leaving, although turnover rates of all firms have declined following the GFC
Worker turnover rate by firm size
The worker turnover rate is the ratio of the average number of new employees and those who have left to the total number of jobs. It is a good measure of workforce stability and the dynamism of a business.
Worker turnover rate by firm size
Business Unit Size
(number of employees)
Worker Turnover
18%
Micro (1-5)
Small (6-19)
Small-medium (20-49)
16%
Medium (50-99)
Large (100+)
14%
2000
2005
2010
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.. Data have been smoothed.
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The Small Business Sector Report 2014
OVERVIEW
2
Regardless of size some firms experience difficulties recruiting
Difficulty in recruiting by position and firm size, 2013
Difficulty in recruiting by position and firm size, 2013
Managers and
professionals
50%
Technicians and
associate professionals
40%
Per cent of businesses
30%
Firm Size
(number of employees)
20%
10%
Small (6-19)
0%
Tradespeople and
related
50%
All other
Small-medium (20-49)
Medium (50-99)
40%
30%
Large (100+)
20%
10%
0%
Not difficult
Moderately
difficult
Source: Business Operations Survey, 2013. Access via Statistics New Zealand website
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The Small Business Sector Report 2014
Severely
difficult
Not difficult
Moderately
difficult
Severely
difficult
OVERVIEW
2
Self employed
Most self-employed people are in their 30s, 40s or 50s
Distribution of self-employed by age, 2000 – 2012
Number of self-employed workers (000s)
Distribution of self-employed by age, 2000 - 2012
Age Group
100
40 - 49
50 - 59
75
30 - 39
60 - 64
50
20 - 29
65 +
25
15 - 19
0
2000
2004
2008
2012
Source: Annual Linked Employer-Employee Data (LEED), custom data supplied by Statistics New Zealand.
Notes: 2012 data are provisional. Self-employed is defined as main income source in the tax year. Self-employed people are counted once, even when they receive self-employed income from two or more enterprises that birthed during the tax year.
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The Small Business Sector Report 2014
OVERVIEW
2
Self-employed people are staying in business longer
Self-employed attrition by age, 2009 – 2012
Self-employed attrition by age, 2009 - 2012
6,000
Number leaving self-employment
Age Group
40 - 49
50 - 59
4,000
30 - 39
60 - 64
20 - 29
2,000
65 +
15 - 19
0
2009
2010
2011
Source: Annual Linked Employer-Employee Data (LEED), custom data supplied by Statistics New Zealand.
Notes: 2012 data are provisional. Self-employed is defined as main income source in the tax year. Self-employed people are counted once, even when they receive self-employed income from two or more enterprises that birthed during the tax year.
26
The Small Business Sector Report 2014
2012
OVERVIEW
PERFORMANCE of Small Businesses
2
Small businesses contribute a significant proportion of GDP
Nominal GDP by firm size for year ending March 2011
Nominal GDP by firm size
for year ending March 2011
Firm Size
GDP in NZ$ (billions)
90
Large (100+)
Medium (50-99)
60
Small-medium (20-49)
Small (6-19)
30
Micro (1-5)
Zero (0)
0
Larger Businesses
Small Businesses
Source: System of National Accounts, custom data supplied by Statistics NZ
Notes: Data show nominal contribution to GDP for year ending March 2011, excluding GST on production, import duties, and excluded industries.
27
The Small Business Sector Report 2014
OVERVIEW
2
Mixed picture on reported increases in profitability by firm size
Per cent of companies reporting increase in profitability
Per cent of companies reporting
increase in profitability
Per cent of businesses
50%
Firm Size
(number of employees)
40%
Large (100+)
Medium (50-99)
Small-medium (20-49)
30%
Small (6-19)
20%
2009
Source: Business Operations Survey, 2009 - 2013. Access via Statistics New Zealand website
28
The Small Business Sector Report 2014
2010
2011
2012
2013
OVERVIEW
2
Salaries and wages are increasing
Average Salaries and Wages in NZ$
Average salaries & wages per employee
Average salaries & wages
per employee
55,000
Firm Size
(number of employees)
50,000
Medium-large (50+)
Micro-small (1-19)
45,000
Small-medium (20-49)
40,000
2009
2010
2011
2012
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property operators, religious services, private households employing staff, and superannuation funds.
29
The Small Business Sector Report 2014
OVERVIEW
2
Availability of finance on acceptable terms
Access to finance is improving overby
timefinancing type and firm size
Equity finance
Availability of finance on acceptable
terms
by financing type and firm size
Per cent of businesses
Per cent of businesses
requesting finance
requesting finance
Debtterms
financeby financing type and firm size
Availability of finance on acceptable
100%
Debt finance
90%
100%
Firm Size
(number of employees)
Equity finance
Large (100+)
Firm Size
(number
of employees)
Medium
(50-99)
80%
90%
Small-medium (20-49)
Large (100+)
70%
80%
60%
70%
Small (6-19)
Medium (50-99)
Small-medium (20-49)
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
2009
2010
2011
2012
2013
60%
Source: Business Operations Survey, 2009 - 2013. Access via Statistics New Zealand website
30
The Small Business Sector Report 2014
Small (6-19)
OVERVIEW
2
Recent signs of expansion after a subdued period.
Per cent of business that invested in expansion by firm size
Per cent of businesses
Per cent of businesses that invested
in expansion by firm size
Firm Size
(number of employees)
40%
Large (100+)
Medium (50-99)
Small-medium (20-49)
30%
Small (6-19)
2009
2010
2011
2012
2013
Source: Business Operations Survey, 2010 - 2013. Access via Statistics New Zealand website
31
The Small Business Sector Report 2014
OVERVIEW
2 Motivations for starting a business
Main reason for starting a new business
Main reason for starting a new business, by major city
MYOB Business Monitor respondents' main reason
for starting a new business
MYOB Business Monitor respondents' main reason for
starting a new business, by major city
I wanted a total lifestyle change
from what I was doing
I wanted a total
lifestyle change from
what I was doing
I started it as an investment
strategy for the future
I started it as an
investment strategy for
the future
I thought that I could make money
from a hobby or an interest
I thought that I could
make money from a hobby
or interest
I purchased a business
previously established
and owned by others
I purchased a business previously
established and owned by others
I took a redundancy from my
employment and used the payout to
start the business
I took a redundancy from my
employment and used the
payout to start the business
I was offered a partnership
opportunity by someone else
I was offered a
partnership opportunity
by someone else
I had reached retirement age but
wanted to continue working
Auckland based
Wellington based
Christchurch
Rest of NZ
I had reached retirement
age but wanted to
continue working
I didn't start this business
I didn't start this
business
Some other reason
Some other reason
Don't Know
Don't know
0%
10%
20%
Per cent of respondents
30%
0%
10%
20%
Per cent of respondents
Source: MYOB Business Monitor, Mind Your Own Business, 2013 (wave 2).
32
The Small Business Sector Report 2014
Source: MYOB Business Monitor, Mind Your Own Business, 2013 (wave 2).
30%
40%
OVERVIEW
2
Main reason for starting a new business, by age of business
MYOB Business Monitor respondents' main reason for
starting a new business, by age of business
Small businesses are started for a number of reasons
The MYOB Business Monitor is a nationwide survey of over a thousand business owners of sole
trading, micro, small and medium-sized businesses from across all industry groups.
The survey is designed to research key areas of business performance, including profitability,
cash flow and pipeline work, as well as business confidence and satisfaction in the support
of government.
I wanted a total
lifestyle change from
what I was doing
I started it as an
investment strategy for
the future
I thought that I could
make money from a hobby
or interest
I purchased a business
previously established
and owned by others
I took a redundancy from my
employment and used the
payout to start the business
Established 10+ YRS
Maturing 5-10 YRS
I was offered a
partnership opportunity
by someone else
Establishing 2-5 YRS
Start-Up <2 YRS
I had reached retirement
age but wanted to
continue working
I didn't start this
business
Some other reason
Don't know
0%
10%
20%
30%
40%
50%
Per cent of respondents
Source: MYOB Business Monitor, Mind Your Own Business, 2013 (wave 2).
33
The Small Business Sector Report 2014
OVERVIEW
2
Case
Study
Caitlin Louise photography
Miranda Grange
Small businesses provide owners with
the opportunity to follow their passion
Miranda in action conducting a wedding earlier this year.
Miranda Grange has created a happy balance in her life as
a lawyer and part-time celebrant. A lawyer during the week,
Miranda runs her own business as a registered marriage
and civil union celebrant.
Word-of-mouth exposure has helped build her business from
a first ceremony in December 2011 to 15 weddings and civil
unions this year. She markets her services through a website
and social media.
Passion, not profit, drives her business. Miranda wants
to help couples celebrate their love, lives and families.
Miranda is based in Wellington and has travelled throughout
the country to conduct ceremonies from Wanaka in the south
to Auckland in the north.
34
The Small Business Sector Report 2014
She continues to develop her professional career by studying
part-time for a Master of Laws degree.
By following her passion, Miranda has set up a growing small
business and achieved her perfect work/life balance.
http://m.dzander.com/
3
Focus
Areas
Small Business and Government
36
International Comparison
44
International Trade
46
Innovation49
Deriving value from the Internet
51
35
The Small Business Sector Report 2014
Focus Areas
3 Small Business and Government
The Business Growth Agenda
Building a more competitive and productive economy is one of the
Government’s main priorities in its plan to create more and better
paying jobs and higher standards of living. The Business Growth
Agenda drives this by ensuring Government stays focused on what
matters to business. More than 350 actions make up the Business
Growth Agenda which supports the six key inputs businesses need to
succeed, grow and create jobs. These are access to export markets,
capital, innovation, skilled workers, natural resources and the
necessary supporting infrastructure.
EXPORT
MARKETS
INNOVATION
INFRASTRUCTURE
SMALL
BUSINESSES
SKILLED
AND SAFE
WORKPLACES
NATURAL
RESOURCES
CAPITAL
MARKETS
36
The Small Business Sector Report 2014
Small businesses benefit from an environment which gives them
confidence to invest and grow. The Business Growth Agenda is
working to create a competitive and productive economic
environment which supports both export-focused and domesticallyfocused businesses. Many initiatives help small businesses by
reducing their costs, saving time, and providing opportunities
for growth.
Focus Areas
Examples of Business Growth Agenda actions that help small businesses
Infrastructure
Innovation
Capital Markets
•
The roll-out of Ultra-Fast Broadband and the Rural Broadband
initiative are lowering business costs and providing new
revenue opportunities.
•
Increased support for business research and development that
Callaghan Innovation is leading.
•
The reduction in personal and company tax rates has allowed
small businesses and their owners to retain more of their revenue.
•
The Roads of National Significance programme and other
transport projects are enabling businesses to move goods
and people more efficiently.
More businesses are being encouraged to integrate design-led
principles and tools into their business through NZTE’s Better
by Design programme.
•
•
Changes to financial markets legislation will provide more
financing options, making it easier and cheaper for businesses
to raise capital.
•
Changes to New Zealand’s patent settings will enable businesses
to have greater certainty their intellectual property will be
enforceable by world standards.
•
The IRD business transformation project will make it possible for
firms to easily and accurately determine their tax obligations and
simplify provisional tax, PAYE and GST payments.
•
Changes to allow the tax deductibility for black hole R&D
expenditure will make R&D more attractive for businesses.
•
•
Changes to allow the cash-out of R&D tax losses for innovative
start-ups will allow certain R&D-intensive companies that are
not yet profitable to cash out their deduction from R&D
expenditure as opposed to carrying it forward.
Rebuilding the Government’s financial reserves and prudent
economic management will keep interest rates lower over
the cycle.
•
Improvements to staff shareholding schemes will reduce
compliance costs to businesses, by reducing the disclosure
requirements needed for businesses to offer shares to employees.
•
Licensed crowd-funders and peer-to-peer lenders can now
operate, offering new ways for firms to raise capital.
Export Markets
•
Free Trade Agreements are improving access to
international markets.
•
New Zealand Trade and Enterprise (NZTE) is helping
internationally-focused small businesses succeed in
overseas markets.
•
•
•
The NZ Export Credit Office (NZECO) is being used to help promote
the export of New Zealand Capital Goods and Services. NZECO
loan and bond guarantee products have enabled an additional
$75m underwrite of export transactions to date.
The development of a NZ Story video that works for a range
of exporters and sectors, including tourism and education,
and for immigration.
The development of the New Zealand story and supporting
resources is helping New Zealand firms market themselves
internationally within a wider New Zealand brand.
Skilled and Safe Workplaces
•
The voluntary 90-day employment trial period reduces the risk
for a business of hiring an employee.
3
Natural Resources
•
Changes to employment legislation will allow businesses greater
flexibility when employees can work and whether to enter into
collective bargaining.
•
A new six month limit for consent applications has been enabled
through the Resource Management Act. Fast-track processes for
simple consents are also being developed.
•
New workplace health and safety rules will mean less compliance
for businesses in low risk industries and benefit businesses with
excellent safety records.
•
Regulations for the safety and security of food are being reformed,
so that small businesses working in low-risk food areas will be
able to operate under food safety programmes.
•
The introduction of the Starting-out Wage is lowering the
barriers for businesses to hire young and inexperienced workers.
•
More business opportunities are being created on public
conservation lands and waters.
•
The new Apprenticeship Reboot programme is likely to get more
apprentices qualified by providing help to employers towards tool
and training costs.
•
The reform of the Te Ture Whenua Maori Act will improve the
productivity of collectively-owned Maori land.
37
The Small Business Sector Report 2014
Focus Areas
3 The roll-out of Ultra-Fast Broadband across New Zealand is already
improving the productivity of many small businesses
The Government’s $1.5 billion Ultra-Fast Broadband (UFB) initiative is bringing fibre optic technology to
homes, schools, hospitals, marae and businesses. By 2015, 90 per cent of businesses will be connected
to UFB, and 75 per cent of New Zealanders will be connected by 2020.
UFB enables downlink speeds of at least 100 Mbps (megabits per second) and uplink speeds of at least
50 Mbps. UFB uptake among businesses is occurring in a wide range of sectors, from cafés to panelbeaters.
It has many benefits including improving productivity through changes to business processes.
The UFB is complemented in rural areas with the Rural Broadband Initiative which addresses the specific
broadband infrastructure needs of rural New Zealand. Over 187,000 rural homes and businesses are now
able to access new fixed wireless broadband, and over 66,000 rural homes and businesses are able to
access improved fixed-line broadband. Ultra-fast broadband is currently available in 28 New Zealand towns
and cities, and more than 420,000 New Zealanders now have access to ultra-fast fibre.
UFB benefits to small businesses include:
•
reduced telecommunication costs by using Voiceover Internet Protocol instead of multiple phone lines
•
greater reliability, with fewer calls and online queries dropping out or being interrupted
•
improved communication between branches and people working remotely
•
improved options for videoconferencing
•
access to cloud applications and rapid data backups
•
improved customer service and staff morale.
Go to www.crownfibre.govt.nz for more information on the UFB roll-out.
Beating to a different drum
An Auckland panelbeater has improved productivity by 10 to 15 per cent since connecting
to Ultra-Fast Broadband (UFB).
Brian Holgate Panelbeaters has more than 50 cars going through its two workshops every week.
Its assessments and repairs of crashed cars include sending photos of damage to insurance
companies. It was frustrating using ADSL (copper-based broadband), as the connection was
slow and sometimes down for two or three hours at a time. This resulted in delays getting
repairs completed and cost everyone time and money.
With UFB, the panelbeating business was able to get much faster connection speeds and
unlimited data. It estimates UFB improved productivity by 10 to 15 per cent and has reduced
staff stress levels. UFB is also providing a better connection between the business’ two
workshops, enabling the main accounts staff member to service both offices easily. The company
is considering using the UFB connection for video footage of damaged vehicles in the future,
enabling its operations to become even more efficient.
Sourced from Crown Fibre Holdings Ltd Annual Report 2013
38
The Small Business Sector Report 2014
Focus Areas
Reducing costs for small businesses across New Zealand
3
Result 9 and the New Zealand Business Number
The Result 9 programme’s One-Stop Online Shop approach co-ordinates government advice and support
for the people who run and grow New Zealand businesses. This whole-of-government programme
develops and delivers better business products and services for all New Zealand companies.
•
Overhauled the online patents system. The online system for applying for, and managing, patents
has been reworked. Managed by the Intellectual Property Office of New Zealand, tasks that previously
took days can now be done instantly. Released in August 2012, the Result Action Plan outlined two targets for the programme.
•
Set up myIR. Inland Revenue has launched a new online service for businesses, filing GST through
‘myIR’ Secure Online Services. By 31 January 2013 more than 70,000 businesses had filed over
150,000 GST returns.
•
Significantly improved the Companies Office website. Users can more easily get immediate
access to relevant information and complete compliance obligations. •
Launched ONECheck. Business.govt.nz’s ONECheck tool combines a company name, domain and
trade mark search in one place online. •
Lower costs: Business costs from dealing with government will be cut by 25 per cent by 2017. The
plan aims to reduce, year-on-year, the effort required by businesses to work with government agencies.
•
Improve services for business: By July 2017 the key performance ratings for government services
to business will be similar to those used by leading private sector firms. Since July 2013, businesses
have been able to contribute to this target through an online feedback system.
Ninety per cent of businesses have contact with one or more government agencies at least once a year.
That’s 409,000 businesses. Government agencies interact with small-to-medium sized enterprises about
three million times every four months.
So far Government has:
•
Set up the New Zealand Business Number (NZBN) system. This is a central part of the Result 9
programme. It aims to make it easier, quicker, and less complicated for businesses to deal with the
Government. All businesses, government agencies and commercial entities in New Zealand will
eventually receive an NZBN. The 13-digit number will become the single identifier for each entity
when it interacts with government agencies and other businesses. The next steps are to integrate all
registration services across Inland Revenue, MBIE and ACC so businesses will only need to supply key
information once, saving time and expense. In December 2013, 1.1 million companies on the New
Zealand Companies Office register were allocated an NZBN. On average, 3000 to 4000 newlyincorporated companies are expected to get NZBNs each month. By 2016 businesses will only have
to provide government with their information once. The number will automatically be shared across
government agencies.
39
The Small Business Sector Report 2014
Focus Areas
3
Business Transformation Project
Regional Business Partners
The Inland Revenue Business Transformation Programme aims to make it as easy as possible for
New Zealanders to file and pay their taxes on time, receive their correct entitlements and cut the
costs of compliance.
There are 14 regional business partners around the country to help local businesses in their areas grow
and innovate with expert advice and access to funding.
The major 10-year programme is changing Inland Revenue’s policies, processes, platforms and service
delivery. The transformation aims to significantly improve how business, customers and third parties work
with Inland Revenue. It also aims to contribute to the Better Public Services and the all-of-government
Information & Communications Technology (ICT) strategy.
Benefits will include:
•
•
•
•
•
•
Improved customer experience. The programme aims to provide certainty to customers that they
have met obligations, significantly simplify customer requirements, and improve customers’ experience
with Inland Revenue and government;
Regional Business Partners have been set up by New Zealand Trade & Enterprise (NZTE) and
Callaghan Innovation to be local hubs of business development know-how and research and development
(R&D) expertise.
Each partner works with local businesses in their region to give advice, support and access to funding to
help them grow their businesses.
The Regional Business Partners are:
•
Northland Inc
•
Auckland Tourism, Events & Economic Development (ATEED)
Economic benefits to New Zealand. The project aims to reduce the time businesses and other
customers spend on tax compliance. This should decrease customer compliance costs associated
with meeting tax and social policy obligations.
•
Waikato Innovation Park
•
Tauranga Chamber of Commerce
•
Gisborne Chamber of Commerce
Improved revenue system integrity. Simpler systems will encourage voluntary compliance.
The project also aims to reduce fraud associated with filing incorrect tax information, not filing
required obligations, or obtaining social entitlements fraudulently.
•
Hawkes Bay Chamber of Commerce
•
Venture Taranaki
•
Vision Manawatu
•
Grow Wellington
•
Nelson Regional Economic Development Agency
•
Development West Coast
•
Canterbury Regional Business Partners Limited
•
Otago Chamber of Commerce & Economic Development Unit, DCC
•
Venture Southland
Reduced time to implement policy initiatives. Policy changes within Inland Revenue will be
introduced and implemented faster and more cost-effectively.
Financial benefits to the Crown. Increased compliance, improved accuracy of tax assessments,
reduced numbers of customers in debt, and productivity savings for Inland Revenue will lift
Crown revenue
Reduced risk of operational failure.
Inland Revenue collects approximately 80 per cent of core Crown revenue (or approximately $49 billion)
and reaches more New Zealanders than any other agency.
40
The Small Business Sector Report 2014
Through the Regional Business Partners, qualified small businesses can access capability vouchers for
expertise and training worth up to $5,000 from over 700 accredited providers around the country. They
can also apply for up to $5,000 worth of Callaghan Innovation business research anddevelopment grants.
http://www.business.govt.nz/support-and-advice/advice-mentoring/regional-business-partners
Focus Areas
3
New Zealand Trade and Enterprise (NZTE)
Business.govt.nz
NZTE is the government’s international business development agency. It offers a range of services
to new businesses and those looking to grow and internationalise, including exporters and high-growth
businesses. These include providing information, training, mentoring services, advice, and funding. NZTE’s
knowledge of overseas markets and its contacts overseas enable them to actively connect New Zealand
businesses with trade and investment opportunities. NZTE also offers specialised services for investors
looking to invest in New Zealand business ventures. www.nzte.govt.nz
Business.govt.nz is a first-stop shop for small businesses wanting to access all the government-related
advice and support they need to set up, operate and grow.
Callaghan Innovation
Callaghan Innovation accelerates the commercialisation of innovation by firms in New Zealand by providing
businesses with a single front door to the innovation system, working in partnership with New Zealand
Trade and Enterprise, economic development agencies, business incubators, universities, polytechnics,
Crown Research Institutes, the venture capital community and industry associations. It funds business
research and development, advises businesses on innovation and provides research and technical services.
www.callaghaninnovation.govt.nz
It links businesses to the help available across all government agencies.
New Zealand businesses and their advisors have visited the business.govt.nz website more than a million
times in the past year.
The website provides a wide range of information and tools. Businesses can find out about their tax
obligations and which company structure is best for them. They can learn about buying a business, hiring
staff, export laws, and where to apply for research and development grants.
There are also templates for writing business plans, an infographic on types of intellectual property, and
a calendar of business-related events and seminars.
ONECheck is one of the website’s most popular tools. It combines a Companies Office, domain name and
trade mark search into one simple function and refers users on to secure the name they have selected.
Business.govt.nz’s Mobile Business Toolbox iPad app allows small businesses and their advisors to use a
selection of tools and resources on the move.
The website is one of MBIE’s key initiatives for improving interactions with business, and a key contributor
to the Better Public Services Result 9 programme.
www.business.govt.nz
41
The Small Business Sector Report 2014
Focus Areas
3
Case
Study
Green
Meadows
Beef
Taranaki-based Green Meadows Beef supplies New Zealand
boutique stores and homes with grass-fed Angus beef.
Its innovative packaging designs, and smart use of brand
across traditional and social media, help differentiate
it from competitors.
Started as a family business, in a little over a year the
company has progressed from running a beef farm to
opening a small processing plant.
Green Meadows Beef approached Taranaki Regional
Business Partner, Venture Taranaki, for help in growing
its business.
42
The Small Business Sector Report 2014
Photo Credit
Regional Business Partners can help
small businesses grow
Together they identified a need for strategic planning advice.
Venture Taranaki issued Green Meadows Beef with a voucher
to work with Staples Rodway’s business advisory team.
It is also now working with catering companies supplying
the Taranaki oil and gas industry. More stores, and Mum and
Dad customers, are enjoying Green Meadows Beef products.
Green Meadows Beef now has a strategic plan with goals and
targets to help sustainably grow its business.
Venture Taranaki continues to work with Green Meadows Beef.
The strategy led Green Meadows Beef to open its processing
plant, take on new staff and look towards export opportunities.
The company went on to win the contract to supply beef for the
June 2013 All Blacks v France test match in New Plymouth.
www.greenmeadowsbeef.co.nz
Focus Areas
3
Case
Study
Photo courtesy of Rob Tucker
90-day
employment
trial period
Creating employment opportunities
by reducing the risk
Small businesses are using the option of a 90-day trial
period to reduce the risk of employing new staff. Retail
is one of the key industries to embrace the change.
for retailers and businesses in general to find the right person,”
he said. “Ninety days is a good time frame to make that
evaluation. It reduces the risk.”
Government introduced the 90-day trial period on 1 March
2009 following an amendment to the Employment Relations
Act 2000. The change allowed employers with fewer than
20 employees to trial new employees for up to 90 calendar
days. The provision was extended to all businesses from
1 April 2011.
Small businesses with fewer than 20 employees are more likely
than larger ones to use a trial period to hire a new employee.
That’s according to the Department of Labour’s May 2012 report
Employers’ Perspectives – Part One: Trial Periods.
Barry Hellberg, Government Relations Manager,
New Zealand Retailers Association, described the trial
as productive and positive. “It has provided a platform
Employers surveyed in the report said the reduced risk from trial
periods allowed them to take a chance on trialling a new position.
Small businesses went one step further. They indicated they
were more likely than larger firms to not have filled the position
if they had not been able to employ someone on a trial period.
One Auckland retailer quoted in the report said the
trials are “great to give particularly small businesses the
opportunity to give someone a go that may not otherwise
be given a go”.
A Wellington retailer said, “the three-month trial period’s
a much, much bigger motivation in decisions for us… it’s
the safety net”.
The trial is optional and not all employers choose to use it.
Uptake in the retail sector has been more widespread than
in some other sectors.
43
The Small Business Sector Report 2014
Focus Areas
3 International comparison
New Zealand small businesses’ share of employment is typical
and innovation levels are close to the median
Per cent share of employment by size (employment count) of firm
for selected countries, 2010
Per cent of SME and large firms innovating by innovation type,
2008 – 2010
Per cent share of employment by size (employment count) of firm
for selected countries, 2010
Per cent of SME and large firms innovating
by innovation type, 2008-2010
Germany
Greece (2007)
Canada (2007-09)
Italy
Brazil (2006-08)
Israel (2006-08)
Portugal
South Africa (2005-07)
Spain
Luxembourg
Australia (2011)
Slovak Republic
Iceland
Hungary
Belgium
Portugal
Poland
Sweden
Ireland
Belgium
Estonia
Slovenia
Netherlands
Italy
Czech Republic
Austria
Sweden
Finland
Denmark
Austria
France
Finland
Turkey
Czech Republic
Denmark
New Zealand (2009-10)
New Zealand
Slovenia
Japan (2009-11)
Germany
United Kingdom
Norway
Luxembourg
Spain
Switzerland
Korea (2005-07, manufacturing)
Slovak Republic
United Kingdom
Hungary
Israel (2009)
Poland
Chile (2009-10)
Brazil
Russian Federation (2009-11)
Russian Federation
SME
80%
0%
25%
50%
75%
Large
70%
60%
50%
40%
100%
30%
20%
10%
0%
10%
20%
30%
40%
50%
60%
70%
Per cent of all SMEs and large firms
Per cent of employment
Employee Count of Firm
1-9
10-19
20-49
50-249
250+
Source: OECD Science, Technology and Industry Scoreboard 2013, OEC, 2013. Access via OECD iLibrary
Notes: Data refer to the number of persons employed, except for New Zealand, the Russian Federation and the United States, which use number of employees and
therefore exclude the working-proprietors without employees. For full notes regarding data, consult source material.
44
The Small Business Sector Report 2014
Innovation
Types
Marketing or
organisational
innovation only
Product or process &
marketing or
organisational
innovation
Source: OECD Science, Technology and Industry Scoreboard 2013, OEC, 2013. Access via OECD iLibrary
Notes: The OECD defines SMEs as firms with fewer than 250 employees. For full notes regarding data, consult source material.
Product or process
innovation only
80% 90% 100%
Focus Areas
3
New Zealand SMEs are slightly less collaborative
... but account for an outsized share of R&D
Per cent share of innovative SME firms collaborating with suppliers
and clients, 2008 – 2010
Business research and development (R&D) by selected firm sizes, 2011
Per cent of innovative SME firms collaborating
with suppliers and clients, 2008-10
Business research and development (R&D)
by selected firm sizes, 2011
United Kingdom
Estonia
Finland
New Zealand
Japan (2009-10)
Norway
Israel (2006-08)
Spain (2010)
Slovak Republic
Slovenia
Slovenia
Slovak Republic
Sweden
Hungary
South Africa (2005-07)
Canada (2010)
Denmark
Czech Republic
Estonia
Australia (2010)
Austria
Belgium (2009)
Hungary
Poland
France
Portugal (2010)
Iceland
Korea (2005-07, manufacturing)
Netherlands (2010)
Czech Republic
Switzerland (2008)
Norway
Austria (2009)
Belgium
Denmark (2009)
Luxembourg
Korea
Ireland
Italy (2010)
New Zealand (2009-10)
Chile (2010)
Turkey
France (2010)
Netherlands
United Kingdom (2010)
Switzerland (2009-11)
Finland
Poland
Sweden (2009)
Portugal
Luxembourg (2009)
Germany
United States (2010)
Russian Federation (2009-11)
Germany (2010)
Australia (2011)
Spain
Suppliers
Japan
Clients
0%
Italy
10%
20%
30%
40%
50%
60%
70%
80%
Per cent of R&D performed by business sector
Chile (2009-10)
Brazil (2006-08)
40%
30%
20%
10%
0%
10%
20%
30%
Per cent of product and/or process innovative SME firms
Source: OECD Science, Technology and Industry Scoreboard 2013, OEC, 2013. Access via OECD iLibrary
Notes: The OECD defines SMEs as firms with fewer than 250 employees. For full notes regarding data, consult source material.
40%
50%
Firms with fewer than 50 employees
Firms with 50-249 employees
Source: OECD Science, Technology and Industry Scoreboard 2013, OEC, 2013. Access via OECD iLibrary
Notes: National statistical agencies use different minimum thresholds for inclusion in R&D surveys and estimates. For full notes regarding data, consult source material.
45
The Small Business Sector Report 2014
Focus Areas
3 International Trade
Larger firms generate overseas income more often than
smaller firms. Around 80% of small firms have never
generated overseas income
Of those businesses generating overseas income, the sale
of goods for use by other businesses is the most common
revenue stream
International engagement by firm size, 2011
Sources of overseas income by firm size, 2011
Sources of overseas income by firm size, 2011
International engagement by firm size, 2011
Sale of manufactured,
processed, or finished goods
for use by other businesses
Generated overseas
income in the last
financial year
Provision of services
Never generated
overseas income
0%
20%
40%
60%
80%
Per cent of businesses
Firm Size
(number of employees)
Small (6-19)
Small-medium (20-49)
Medium (50-99)
Large (100+)
Sale of goods manufactured
overseas
Sale of manufactured,
processed, or finished goods
for personal or household use
Licencing / franchising
arrangements and royalties
Other
Sales of raw unprocessed
material
Earning from assests
0%
10%
20%
30%
40%
50%
Per cent of businesses currently earning overseas income
Firm Size
(number of employees)
Source: Business Operations Survey, 2011. Access via Statistics NZ website
46
The Small Business Sector Report 2014
Source: Business Operations Survey, 2011. Access via Statistics NZ website
Small
)
(6-19
Small-medium )
(20-49
Medium )
(50-99
Large (100+)
Focus Areas
3
Of those businesses not earning overseas income, the main
reason identified is that they are not interested or their
business is not suitable
Limited experience in expanding overseas is the most common
barrier cited by small businesses wanting to export
Interest in generating overseas income in the future by businesses
Interest
in generating overseas income in the future
not currently doing
so, 2011
by businesses not currently doing so, 2011
Reported barriers for firms interested but not currently generating
overseas income by barrier type and firm size, 2011
Reported barriers for firms interested but not currently generating
overseas income by barrier type and firm size, 2011
Limited experience in
expanding beyond New
Zealand
Not currently interested, or
businesss not suitable for
overseas income
Limited knowledge about
Firm Sizespecific markets
(number of employees)
No action currently but
interested in exploring
options
Limited access to finance
for expansion beyond New
Zealand
Large (100+)
Limited access to
Medium (50-99)
Initiatives underway and
overseas income anticipated
within the next 12 months
distribution networks
Small-medium (20-49)
Distance from markets
Small (6-19)
the future
2011
Firm Size
(number of employees
Exchange rate volatility
Actively exploring options
0%
20%
40%
60%
Per cent of all businesses in New Zealand
Firm Size
(number of employees)
Large (100+)
Large (100+)
Medium (50-99)
Low demand or increased
competition in overseas
market
Small-medium (20-49)
Small (6-19)
Overseas government
regulations or tariffs
Exchange rate level
Language and cultural
differences
Medium (50-99)
Small-medium (20-49)
Small (6-19)
Inability to rapidly
increase supply
Other
0%
20%
40%
60%
Per cent of businesses interested but not currently generating overseas income
Source: Business Operations Survey, 2011. Access via Statistics NZ website
Source: Business Operations Survey, 2011. Access via Statistics NZ website
47
The Small Business Sector Report 2014
Focus Areas
3
Going
for
Growth
Caitlin Louise photography
Denheath
Desserts
Overseas markets provide opportunities
for small businesses to grow
Denheath Desserts has expanded its business by selling to
overseas customers. The Timaru company had grown from
a small family-owned café into a business supplying custard
squares and desserts throughout New Zealand.
Denheath wanted to expand further by entering the
Australian market. It wanted to replicate its New Zealandbased direct-to-consumer delivery model to cafés and retail
outlets around Australia.
48
The Small Business Sector Report 2014
New Zealand Trade and Enterprise (NZTE) helped Denheath
explore opportunities overseas and identify potential partners.
Denheath Desserts has grown by finding new offshore
markets with the help of NZTE.
Denheath joined an NZTE-run Costco Roadshow to Melbourne,
Sydney and Canberra. It tested its product in the market
and got valuable consumer feedback in some of Australia’s
largest markets.
www.denheath.co.nz
The roadshow introduced Denheath to working with Costco
globally. Costco Australia and Costco USA and Costco Korea
have since placed large orders for Denheath product. Orders
are also pending from Costco Japan.
Focus Areas
Innovation
3
Small businesses prioritise marketing slightly ahead of other kinds
of innovation
Upgrading computer systems and employee training are the
most common specific activities small businesses engage in
to support innovation
Per cent of businesses reporting innovation by innovation type and
firm size, 2013
Per cent of businesses conducting activities that support innovation, by
Per cent of businesses conducting activities that support innovation,
activity and firm size, 2013
by activity and firm size, 2013
Per cent of businesses reporting innovation
by innovation type and firm size, 2013
Acquired computer
hardware and software
Organisational or managerial
Firm Size
(number of employees)
Operational process
Large (100+)
Medium (50-99)
Small-medium (20-49)
Goods or services
Small (6-19)
Employee training
Implemented new business
strategies or management
techniques
Acquired machinery and
equipment
Marketed the introduction
of new goods or services
Marketing method
0%
10%
20%
Per cent of businesses
30%
40%
Organisational restructure
Market research
Design (eg industrial,
graphic, or fashion design)
Significant changes to
marketing strategies
Acquired other knowledge
Apply for government
funding
0%
10%
20%
30%
Per cent of businesses
Firm Size
(number of employees)
Source: Business Operations Survey, 2013. Access via Statistics NZ website
Large (100+)
Medium (50-99)
Small-medium (20-49)
Small (6-19)
Source: Business Operations Survey, 2013. Access via Statistics NZ website
49
The Small Business Sector Report 2014
Focus Areas
3
The cost of product development and
market entry is the largest barrier
to innovation
Going
for
Growth
Ashford
Handicrafts
Barriers to innovation, by barrier type and
Barriers
firm size,
2013 to innovation, by barrier
type and firm size, 2013
Cost to
develop or
introduce
Lack of
management
resources
Eighty-year old company Ashford Handicrafts is focusing
on innovation to maintain quality, customer loyalty
and profitability.
Lack of
appropriate
personnel
The Ashburton company is a world-leading manufacturer
of spinning wheels. It employs 30 long-serving staff and
exports more than 90 per cent of its production.
Government
regulation
Chief Executive Richard Ashford says his company has a
strong emphasis on manufacturing innovation this year.
Photo credit
Innovation drives growth and
competitive advantage for SMEs
“We face significant disadvantages in freight and
distribution costs compared to competitors in Europe,
the US and UK,” says Richard. “And in the past few years,
the currency has provided further challenges.”
Lack of
marketing
expertise
Lack of
information
Richard’s local Chamber of Commerce introduced him
to Callaghan Innovation’s Better by Lean service (LEAN).
The programme focuses on improving operational efficiency
by, for example, minimising waste and inventory.
Lack of
cooperation
with other
businesses
In many cases, businesses can obtain part-funding from
Callaghan Innovation to undertake the programme. Access to
intellectual
property
rights
0%
5%
10%
15%
20%
Per cent of businesses
Firm Size
(number of
employees)
Large (100+)
Medium (50-99)
Small-medium (20-49)
Small (6-19)
Source: Business Operations Survey, 2013. Access via Statistics NZ website
50
The Small Business Sector Report 2014
Richard says his business is now making smaller runs
with faster turnaround times.
“This will help us be more responsive to customer demand,
which we struggle to keep up with, and carry less stock.
All of this will help our costs, customer satisfaction
and revenues.”
Ashford Handicrafts’ packaging department has already
saved over 25 per cent in costs. Richard is looking forward
to further gains in other areas of manufacturing during the
rest of 2014.
Richard says the LEAN programme is creating a virtuous
circle of innovation for his business.
“What we achieve in manufacturing this year will free up time
and resources to put into new product innovations next year.”
www.ashford.co.nz
Focus Areas
Deriving value from the Internet
3
Small businesses use the internet in a relatively similar way
to larger firms
Small businesses focus their websites more on providing
information than conducting business processes
Business
internet
activities
Business internet
activities
by firm
size, 2012
Business website
features by firm size, 2012
Business website features by firm size, 2012
by firm size, 2012
Goods or
services
information
Finance
Customer
information
collection
Internal or
external
recruitment
Ordering goods
or services
Staff training
Online payment
Sharing
information
within the
business
Online
after-sales
support
Sharing
information
with other
organisations
Information
for repeat
customers
Internet used
for other
purposes
Information
about privacy
or security
0%
25%
50%
75%
100%
0%
20%
Per cent of businesses
Firm Size
(number of
employees)
60%
80%
Per cent of businesses
Large (100+)
Medium (50-99)
Small-medium (20-49)
Small (6-19)
Source: Business Operations Survey, 2012. Access via Statistics NZ website
40%
Firm Size
(number of
employees)
Large (100+)
Medium (50-99)
Small-medium (20-49)
Small (6-19)
Source: Business Operations Survey, 2012. Access via Statistics NZ website
51
The Small Business Sector Report 2014
Focus Areas
3
Small businesses make extensive use of internet channels to interact with government
with government
Interaction Interaction
with government
via internet by interaction type and firm size, 2012
via internet by interaction type
and firm size, 2012
Obtaining
information
Downloading
forms
Completing and
seding forms
Making online
payments
None
0%
25%
50%
75%
Per cent of businesses
Firm Size
(number of
employees)
Large (100+)
Medium (50-99)
Small-medium (20-49)
Small (6-19)
Source: Business Operations Survey, 2012. Access via Statistics NZ website
52
The Small Business Sector Report 2014
Focus Areas
3
Going
for
Growth
Augen
Software
Group
Augen Software Group has helped some of its SME clients
use the internet to transform themselves. The businesses are
scaling up, creating new services and reaching more clients.
Director Mitchell Pham says Augen helped one firm
use mobile devices to improve how it manages building
construction projects for the Christchurch rebuild.
“Insurance companies are funding an unprecedented
amount of work across hundreds of sites simultaneously,”
says Mitchell. “So there was high value in a product that
could let them see what was going on in real-time. Project
Photo credit
The Internet empowers small businesses
to create new business models
managers throughout Canterbury can now report progress and
problems as they find them.”
Augen also created a net-based employee survey system for an
HR advisory services company. The system has transformed the
business from a domestic consultancy to a product company
with international clients.
For another client, Augen harnessed social networking concepts
to create a product that helps patients recover or manage their
conditions. Patients use the product to enhance the support
levels they can receive from trusted friends, family and health
professionals they nominate in real time, anywhere.
Mitchell says the internet allowed his own business to open
an office in Vietnam. Augen can now work in ways that would
have been impossible with phone calls and flights alone.
“The internet provides unprecedented reach for small
businesses that cannot afford to have people and sites all
over the country or the world,” says Mitchell. “It’s also a
cost-effective way to scale up using new business models.”
www.augensoftwaregroup.com
53
The Small Business Sector Report 2014
54
The Small Business Sector Report 2014
4
Industry
Profiles
55
The Small Business Sector Report 2014
Industry profiles
4 Industry overview
Small businesses play a significant role in nearly all of New Zealand’s industries
The proportion of small business in industry sectors broadly
correlates to New Zealand’s highest value sectors.
Small businesses are found across the economy, although they tend
to have a higher representation in some industries. If zero-employee
businesses are excluded, the proportion of small businesses in
industries mostly correlates to the country’s highest value sectors
in real terms. For example, the highest proportion of small businesses
is found in high-value industries such as professional services, retail
trade, construction and agriculture, forestry and fishing. Manufacturing
and rental, hiring and property services (the two highest value
industries in real terms) are exceptions.
Other than education and training, where small businesses
(6-19 employees) are the most common size, the firm size pattern
is similar for most industries, with them mostly being comprised of
zero employees, followed by micro businesses, small businesses,
small-medium businesses and then a comparatively small number
of medium and large businesses.
Infrastructure-intensive industries tend to have a lower number
of businesses of all sizes due to the high barriers to entry and exit
that they entail. The mining and petroleum, and utilities industry
are both characteristic of this structure. The nature and scale of
government services means there is also a low number of small
businesses in the government administration, defence and public
safety industry classification.
The key variables in calculating ‘value add’ are: sales for
determining gross output; and purchases for determining
intermediate consumption. Value added being calculated as
gross output minus intermediate consumption.
Count of Enterprises by Industry and
Firm
as at 2013
Count of Enterprises by Industry and Firm Size
asSize
at 2013
Rental, hiring & property services
Agriculture, forestry & fishing
Professional services
Construction
Finance & insurance
Retail trade
Firm Size
(number of employees)
Other services
Manufacturing
Zero (0)
Accommodation & restaurants
Micro (1-5)
Health
Small (6-19)
Wholesale trade
Small-medium (20-49)
Medium (50-99)
Administration & support services
Large (100+)
Transport & logistics
Arts & recreation services
Education
Media & telecommunications
Government administration, defence, public safety
Utilities
Mining & petroleum extraction
0
*The Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 is used to compile and analyse
industry statistics in New Zealand. Within ANZSIC there are 19 core industries in which industry can be reported on at
its highest level.
56
The Small Business Sector Report 2014
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
25,000
50,000
75,000
Number of enterprises
100,000
industry profiles
Average
Average
number
number
of
of
0
-- 5
Average
Average
number
number
of employees
employees
of employees
employees
0 -- 5
5 in
in0
02013
2013
5 in
in 2013
2013
3
3
4
4
3
3
Professional
Professional
&
&
Professional
Professional
&
&
administrative
administrative
administrative
administrative
services
services
services
services
Arts,
Arts, recreation
recreation
&
&
Arts, recreation
recreation
Arts,
&
&
other
services
services
other other
other
services
services
Construction
Construction
Construction
Construction
2
2
2
2
Average
Averagenumber
numberof
ofemployees
employeesper
perfirm
firm
Average
number
numberof
ofemployees
employees
per
perfirm
firm
Average number of employees perAverage
firm
Average
number of employees per firm
4
4
20
20
20
20
16
16
16
16
11
Finance
Finance
&
&
Finance
Finance
& insurance
insurance
& insurance
insurance
Agriculture,
Agriculture,
Agriculture,
Agriculture,
forestry
forestry
&
&
forestry
forestry
& fishing
fishing
& fishing
fishing
11
Rental,
Rental,
hiring
hiring
&
&
Rental,
Rental,
hiringhiring
&
&
property
property
services
services
property
property
services
services
Average number of employees 5 – 10 in 2013
15.0
15.0
15.0
15.0
Average number of employees per firm
Average number of employees 0 – 5 in 2013
12.5
12.5
12.5
12.5
7.5
7.5
7.5
7.5
5.0
5.0
5.0
5.0
2000 2000
2005 2005
2010 2010
2000 2005
2005 2010
2010
2000
Average number of employees 10 – 50 in 2013
Average
Average
number
number
of
of
50+
2013
Average
Average
number
number
of employees
employees
of employees
employees
50+ in
in50+
50+
2013in
in 2013
2013
105
105
Education
Education
Education
Education
12
12
8
8
8
8
Health
Health
HealthHealth
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Mining
&
&
MiningMining
Mining
& petroleum
petroleum
& petroleum
petroleum
extraction
extraction
extraction
extraction
2000
2000 2000
2005 2005
2010 2010
2000 2005
2005 2010
2010
Retail
Retail
trade
trade &
&
Retail Retail
trade &
&
trade
accommodation
accommodation
accommodation
accommodation
Media
Media
&
&
MediaMedia
&
&
telecommunications
telecommunications
telecommunications
telecommunications
Wholesale
Wholesale
trade
Wholesale
Wholesale
trade trade
trade
Transport
Transport
&
&
Transport
Transport
&
&
logistics
logistics
logistics
logistics
Average number of employees 50+ in 2013
105
105
12
12
4
2000
2000 2000
2000 2005
2005 2005
2005 2010
2010 2010
2010
Average
Average
number
number
of
of
10
in
50
Average
Average
number
number
of employees
employees
of employees
employees
10 -- 50
5010
10
in--2013
2013
50 in
in 2013
2013
Utilities
Utilities
Utilities
Utilities
Average
Average
number
number
of
of
5
5
10
Average
Average
number
number
of employees
employees
of employees
employees
5 -- 10
10 in
in
5 --2013
2013
10 in
in 2013
2013
10.0 10.0
10.0
10.0
Average number of employees per firm
Changes in average number of employees
per firm over time
100
100
100
100
95
95
95
95
90
90
90
90
85
85
85
85
Government
Government
Government
Government
administration,
administration,
administration,
administration,
defence,
defence,
public
defence,
defence,
publicpublic
public
safetysafety
safety
safety
2000
2000 2005
2005 2010
2010
2000 2000
2005 2005
2010 2010
Average represents total number of employees divided by total number of firms for each industry.
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
57
The Small Business Sector Report 2014
Industry profiles
Number of firms
Growth Growth
trends for
trends
different
for different
size firms
size firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Small
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
The composition of the industry is dominated by small businesses,
with small and small-medium businesses being the largest employers.
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Micro
Accommodation and food is one of the highest labour intensive
industries and has suffered from low productivity growth. Overall,
it is the least productive industry in the New Zealand economy.
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
0
0
2,000
0
2,000
0
4,000
2,000
2,000
4,000
6,000
4,000
4,000
6,000
2010
2005
2005
2010
2010
2010
30.0%
30.0%
27.5%
27.5%
25.0%
25.0%
25.0%
25.0%
22.5%
22.5%
22.5%
22.5%
Micro
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Small
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
2000
2000
100
100
2005
2005
2005
2005
2010
2010
2010
2010
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in
Trends
value in
add
value
per add
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
120
120
110
110
2000
2000
2005
2000
2000
2005
Trends in value add per employee
Value
Value added
added per
per employee
employee ($)
($)
Index
Index
Index
Index
140
140
130
130
2000
2000
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
100
100
27.5%
27.5%
10,0000
20,000
10,000
30,000
20,000
40,000
30,000
50,000
40,000
10,000
30,000
40,000
50,000
0 20,000
10,000
20,000
30,000
40,000 50,000
50,000
Trends in
Trends
contribution
in contribution
to GDP and
to GDP
firmand
sizefirm size
100
100
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Zero
Zero (0)
(0)
Trends in contribution to GDP and firm size
120
120
110
110
Smoothed
Smoothed turnover
turnover
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
140
140
130
130
Micro
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Worker turnover
Worker turnover
rate
rate
30.0%
30.0%
Large
Large (100+)
(100+)Large
Large (100+)
(100+)
0
0
Zero (0)
(0)
Zero
Worker turnover rate
NumberNumber
of Employees
of Employees
Zero
Zero (0)
(0)
Zero (0)
(0)
Zero
120
120
2000
2000
Number of employees
Micro
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
The Small Business Sector Report 2014
100
100
6,000
6,000
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Small
58
120
120
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Small
140
140
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: These GDP data include retail trade as well as accommodation and restaurants, as more detailed data
were unavailable. Chain-volume series expressed in 1995/96 prices. All numbers from business demography
statistics are provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
140
140
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
NumberNumber
of firmsof firms
The industry has a relatively homogenous composition, comprising of
food and beverage providers like cafés, restaurants, takeaways, bars
and accommodation providers such as hotels, motels and backpackers.
There is a high degree of seasonality in labour workforce flow with
higher demand for workers in summer and less in winter. As a result,
the industry has one of the highest worker turnover rates. The overall
trend is the smaller the business, the higher the turnover rate. This
high rate acts as a disincentive to investment in staff training and
impacts the ability of businesses to attract and retain skilled staff.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
4 Accommodation
and restaurants
36,000
36,000
36,000
36,000
32,000
32,000
32,000
32,000
28,000
28,000
28,000
28,000
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
Micro-smallMicro-small
Micro-small
(1-19)
(1-19)
Micro-small
(1-19)
(1-19)
Retail
&
trade
Retail trade
tradeRetail
Retail
&
trade &
&
Total industry
industry
Total
GDP
industry GDP
GDP
Total
Total
GDP
industry
accommodation
accommodation
GDP
GDP
accommodation
accommodation
GDP
GDP
contributioncontribution
contribution
contribution
24,000
24,000
contribution
contribution
24,000
24,000
contributioncontribution
Retail
&
trade
Retail trade
tradeRetail
Retail
&
trade &
&
Total
industry
Total
employees
industry
employees
Total
industry
Total
employees
industry
employees
2009
2010
2009
accommodation
accommodation
employees employees
employees
2009
2010
2009
accommodation
accommodation
employees
per firm
firm
per firm
firm
per
per
per
per
per firm
firm
per firm
firm
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
2011
2010
2011
2010
2012
2011
2012
2011
2012
2012
industry profiles
4
Case
Study
Photo credit: Westland District Council
Wildfoods
Festival
Festival benefits small business
and regional economy
Crowds gather at the 2012 Wildfoods Festival
Local festivals help small food and accommodation
businesses showcase their products to a wider audience.
The annual Wildfoods Festival on the South Island’s west
coast presents wild food to a diverse audience. The festival
has grown steadily since 1,800 people attended the first
one in Hokitika in 1990.
Westland District Council has run the festival since 1993.
Attendance peaked at 22,500 in 2003, and the festival is
now so popular that visitor numbers are capped at 15,000 and
stalls at 50.
Deep Creek Deli, Aoraki Cheese, High Country Salmon and
Cannon Hill Carnivores were among the 53 local and out-oftown stallholders at the 2012 festival.
That year the festival encouraged total expenditure in the
Westland District of $6.5 million and helped generate
54 full-time equivalent jobs.
The festival attracted 9,700 visitors to the district who stayed
an average of 2.5 days. About 90 per cent of festival-goers
came from outside the West Coast region.
The festival raises the profile of Hokitika and the Westland
District, and provides an opportunity for small food and
accommodation businesses to work together and bring
wider benefit to their region.
www.wildfoods.co.nz
59
The Small Business Sector Report 2014
Industry profiles
Number of firms
Growth Growth
trends for
trends
different
for different
size firms
size firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Small
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
0
0
2,500
0
2,500
0
5,000
2,500 7,500
5,000 10,000
7,500
5,000
2,500
7,500
5,000
10,000
7,500
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Small
Micro
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
60
The Small Business Sector Report 2014
Zero
Zero (0)
(0)
20,000
0
20,000
0
20,000
40,000
40,000
20,000
160
160
140
140
120
120
100
100
2000
2000
2000
2000
2005
2005
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
2005
2005
2010
2010
2010
2010
30%
30%
25%
25%
20%
20%
35%
35%
Large
Large (100+)
(100+)Large
Large (100+)
(100+)
30%
30%
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
25%
25%
Small
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
20%
20%
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Micro
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Value
Value added
added per
per employee
employee ($)
($)
120
120
100
100
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Small
110
110
2000
2000
40,000
40,000
Trends in
Trends
contribution
in contribution
to GDP and
to GDP
firmand
sizefirm size
Index
Index
Index
Index
140
140
Zero
Zero (0)
(0)
Worker turnover
Worker turnover
rate
rate
35%
35%
Trends in contribution to GDP and firm size
160
160
Zero
Zero (0)
(0)
Worker turnover rate
Large
Large (100+)
(100+)Large
Large (100+)
(100+)
0
0
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
130
130
2000
2000
10,000
10,000
NumberNumber
of Employees
of Employees
Zero
Zero (0)
(0)
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Micro
150
150
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Number of employees
The rise of online booking and information available on the internet
has challenged the business models of some of the small businesses
essentially operating as information intermediaries. These include
travel agents, ticketing service providers and recruitment firms.
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: These GDP data include professional services as well as administrative services, as more detailed data
were unavailable. Chain-volume series expressed in 1995/96 prices. All numbers from business demography
statistics are provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
110
110
Smoothed
Smoothed turnover
turnover
Zero (0)
(0)
Zero
130
130
Trends in
Trends
value in
add
value
per add
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
Within the administrative services classification, the highest number
of small businesses is in the field of building cleaning, pest control
and gardening services. Packaging and labelling services have the
lowest number of small firms, with the industry having a high
proportion of medium and large businesses.
150
150
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
NumberNumber
of firmsof firms
This industry classification includes a wide variety of firms with little
in common other than they are service businesses. The industry
includes office administration services, travel agents, recruitment
firms, temporary recruitment agencies, building cleaning services, pest
control, call centre operations, and packaging and labelling services.
This industry has one of the highest worker turnover rates although
smaller firms experience lower turnover than larger firms. This may
be due to the temporary or part-time nature of the work involved.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
4 Administration services
50,000
50,000
50,000
50,000
45,000
45,000
45,000
45,000
Micro-small
(1-19)
(1-19)
Micro-smallMicro-small
Micro-small
(1-19)
(1-19)
40,000
40,000
40,000
40,000
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
35,000
35,000
35,000
35,000
Professional
&
&
ProfessionalProfessional
Professional
&
&
Total
industry
Total
GDP
industry
GDP
Total
industry
Total
GDP
industry
GDP
administrative
administrative
services
services
administrative
administrative
services
services
contributioncontribution
GDP
GDP
GDP contribution
contribution
GDP contribution
contribution contributioncontribution
30,000
30,000
30,000
30,000
Professional
&
&
ProfessionalProfessional
Professional
&
&
Total industry
industry
Total
employees
industry employees
employees
Total
Total
employees
industry
2009
2010
2009
administrative
administrative
services
services
2009
2010
2009
administrative
administrative
services
services
per firm
per firm
firm
per
employees
employees
firm
per
employees per
per
employees
firm
per firm
firm per firm
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
2011
2010
2011
2010
2012
2011
2012
2011
2012
2012
industry profiles
Case
Study
4
Shine People
Consulting
Small businesses owners can outsource
key roles
Small businesses can help other businesses by providing
specific skills they may lack. Denise Hartley-Wilkins set
up Nelson-based Shine People Consulting in 2008 to help
other companies with their human resources, management
consulting and organisational development.
Her company provides practical solutions for small business
owners’ everyday problems and long-term challenges. Shine’s
services include recruitment and selection support; workplace
bullying and harassment support; employee engagement
and performance management; strategic and operational
planning; and project management.
Shine works with small businesses from manufacturing,
engineering, retail, professional services and trade. It helps
other small business owners grow by providing pragmatic
solutions that add value to their businesses.
www.shinepeople.co.nz
Denise Hartley-Wilkins
61
The Small Business Sector Report 2014
Industry profiles
Number of firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Small
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
0
0
Growth Growth
trends for
trends
different
for different
size firms
size firms
150
150
125
125
100
100
10,000
30,000
40,000
0 20,000
10,000
20,000
30,000 40,000
40,000
10,000
0
20,000
10,000
30,000
20,000
40,000
30,000
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
125
125
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Small
100
100
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Micro
Zero
Zero (0)
(0)
2000
2005
2000
2005
2000
2000
2005
2010
2005
2010
Zero
Zero (0)
(0)
2010
2010
Worker turnover rate
Worker turnover
Worker turnover
rate
rate
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Small
Micro
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Zero
Zero (0)
(0)
0
0
30%
30%
27%
27%
24%
24%
10,000
0
10,000
0
20,000
10,000
20,000
10,000
30,000
20,000
30,000
20,000
30,000
30,000
110
110
100
100
130
130
Index
Index
Index
Index
120
120
120
120
110
110
100
100
2000
2000
2000
2000
2005
2005
2005
2005
2010
2010
2010
2010
Value
Value added
added per
per employee
employee ($)
($)
140
140
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
27%
27%
Small
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Micro
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Trends in
Trends
contribution
in contribution
to GDP and
to GDP
firmand
sizefirm size
130
130
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
30%
30%
2000
2000
Trends in contribution to GDP and firm size
140
140
33%
33%
24%
24%
Agriculture,Agriculture,
Agriculture,
forestry &
& forestry
forestry &
& Total
Total industry
industry
Total
GDP
industry GDP
GDP
Agriculture,
forestry
Total
GDP
industry
fishing GDP
GDPfishing
fishing
contribution
GDP contribution
contributioncontribution
contributioncontribution
contribution
fishing
contribution
GDP
Trends in
Trends
value in
add
value
per add
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
Zero
Zero (0)
(0)
33%
33%
Smoothed
Smoothed turnover
turnover
Large
Large (100+)
(100+)Large
Large (100+)
(100+)
This may reflect prevailing industry dynamics as farms are
consolidated and ownership models change.
The Small Business Sector Report 2014
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
75
75
NumberNumber
of Employees
of Employees
There has also been a general reduction in the number of zeroemployee and micro-sized dairy cattle farms and an increase in
small (6-19) enterprises.
62
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
150
150
75
75
Number of employees
Agriculture, forestry and fishing is one of the few industries which
has seen a decrease in the number of zero-employee and micro-sized
firms. The sheep and beef cattle farming sub-sector is the main
contributor to this decline.
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
NumberNumber
of firmsof firms
The industry’s main activities include growing crops, raising animals,
growing and harvesting timber, and harvesting fish and other animals
from farms or their natural habitats. Included are horticulture,
livestock production and aquaculture, forestry and logging, and
fishing, hunting and trapping. Many of the outputs from this sector
are inputs to the food and beverage, and wood and paper sectors,
which are important export commodities in New Zealand’s economy.
As with all industries, there is a high proportion of small firms.
However, employment in this sector is also concentrated in
small businesses. Worker turnover is the highest of any industry
classification, reflecting the seasonal nature of much of the industry.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
4 Agriculture, Forestry
& Fishing
90,000
90,000
90,000
90,000
Micro-small
(1-19)
(1-19)
Micro-smallMicro-small
Micro-small
(1-19)
(1-19)
70,000
70,000
70,000
70,000
50,000
50,000
50,000
50,000
Agriculture,Agriculture,
Agriculture,
forestry &
& forestry
forestry &
& Total
Total industry
industry
Total
employees
industry employees
employees
Agriculture,
forestry
Total
employees
industry
fishing employees
employees
fishing per
per
employees
firm
per firm
firm
per firm
firm
per firm
firm
fishing
fishing
employees
firm
per
per
per
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
2009
2009
2010
2009
2010
2009
2011
2010
2011
2010
2012
2011
2012
2011
2012
2012
industry profiles
4
Regional concentration
of business
units in agriculture,
forestry
fishing
Regional
concentration
of business
units and
in agriculture,
forestry & fishing
Waikato
Canterbury
Manawatu-Wanganui
Bay of Plenty
Northland
Southland
Otago
Auckland
Taranaki
Hawke's Bay
Wellington
Agriculture, forestry and fishing is one of two industries (the other
is mining and petroleum) whose highest absolute number of small
businesses are outside Auckland. Unsurprisingly, more rural provincial
areas such as Southland and Gisborne have the highest proportion
of small firms operating in these primary industries.
Marlborough
Tasman
Gisborne
West Coast
Nelson
0.0
2.5
5.0
7.5
10.0
12.5
Number of business units with
fewer than 20 employees, (000s)
Percentage of all
business units in region
that have fewer than 20
employees and are in
agriculture, forestry &
fishing in 2013
30%
20%
10%
63
The Small Business Sector Report 2014
Industry profiles
4
Going
for
Growth
Photo credit: Southern Clams Ltd.
Southern
Clams
Small businesses can drive
environmental sustainability
Getting clams ready for export
Southern Clams Limited is pioneering environmental
responsibility in the international clam fishery industry.
Its harvesting practices preserve resources for the future.
Roger Belton set up the Otago business in the 1980s. It
now supplies customers throughout New Zealand, exports
80 per cent of its products to niche markets in Europe,
North America and Asia, and continues to grow. The
business started with a single employee and now has 30.
64
The Small Business Sector Report 2014
Since 1982, Southern Clams has researched the impact of its
harvesting on habitats. It continues to refine its operations
and sustains for future generations the environment for its
wild-stock littleneck clams.
Its wild-stock rotational harvesting system uses a hand-held
GPS system to map and manage each shellfish harvest.
Southern Clams has collected over a decade of data to develop
this system. Numerous independent researchers have surveyed
the bio-mass in Blueskin Bay since 1984 with the latest report
showing a slight increase in total bio-mass.
Southern Clams is committed to carbon neutrality and has
invested in its own forestry venture. In 2011 its production
footprint became carbon neutral. The business planted
83 hectares of bio-diverse forestry in the Otago region
and plans to have planted a total of 300 hectares by 2018.
www.nzclams.com
industry profiles
Number of firms
NumberNumber
of firmsof firms
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
210
210
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Sport New Zealand, formerly known as SPARC, administers the
majority of sports and recreation funding (excluding private entities
such as gyms and fitness centres). Sport NZ mainly funds national
sport organisations. Funding flows down into smaller organisations
such as local sports clubs.
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
0
0
180
180
150
150
120
120
4,000
2,000
2,000
4,000
6,000
4,000
4,000
6,000
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
22.5%
22.5%
20.0%
20.0%
20.0%
20.0%
17.5%
17.5%
17.5%
17.5%
5,000
10,000
10,000
5,000
130
130
120
120
110
110
100
100
2000
2000
2000
2000
2005
2005
2010
2005
2005
2010
2010
2010
2005
2005
2010
2010
2010
2010
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
2000
2000
10,000
10,000
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
2000
2005
2005
2000
2005
2010
2010
2005
2010
2010
Trends in value add per employee
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Arts, recreation
recreation
Arts, recreation
recreation
& other
other &
& other
other Total
Total
industry
Arts,
Arts,
&
contribution
contribution
services GDP
GDP
services
contribution
GDP contribution
contribution
contribution
contribution
services
services
contribution
GDP
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
0
5,000
0 5,000
Value
Value added
added per
per employee
employee ($)
($)
110
110
100
100
2005
2000
2000
2005
22.5%
22.5%
Zero
Zero (0)
(0)
140
140
Index
Index
Index
Index
120
120
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
25.0%
25.0%
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
130
130
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
25.0%
25.0%
Trends in contribution to GDP and firm size
140
140
Zero (0)
(0)
Zero
WorkerWorker
turnover
turnover
rate rate
Smoothed
Smoothed turnover
turnover
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: These GDP data include other services as well as art and recreational services, as more detailed data
were unavailable. Chain-volume series expressed in 1995/96 prices. All numbers from business demography
statistics are provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
Zero (0)
(0)
Zero
120
120
Worker turnover rate
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
0
0
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
90
90
NumberNumber
of Employees
of Employees
Zero
Zero (0)
(0)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
150
150
2000
2000
6,000
6,000
Number of employees
On the whole, sports and physical recreation activities dominate
both growth and the absolute number of businesses in this industry
across all firm sizes including small businesses. Although not formally
counted, this sub-sector receives important contributions from a large
number of volunteers at the local sports and recreation club level.
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
180
180
90
90
2,000
0
2,000
0
4
210
210
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
This industry classification comprises heritage and recreation
activities such as museums, creative and performing arts, sports
and recreation, horse racing and gambling activities.
Creative New Zealand, the national arts development agency,
provides more direct funding for some small businesses with grants
available for individual artists and small groups. Creative and
performing art activities (musicians, dancers, comedians, writers)
contribute a significant number of zero-employee firms.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
Art & recreation
70,000
70,000
70,000
70,000
60,000
60,000
60,000
60,000
50,000
50,000
50,000
50,000
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
40,000
40,000
40,000
40,000
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
30,000
30,000
30,000
30,000
Arts,
Arts,
&
Arts, recreation
recreation
Arts, recreation
recreation
& other
other &
& other
other Total
industry
Totalemployees
employees
industry employees
employees
industry
Total
industry
services employees
employees
services employees
employees
per
per Total
services
services
per
per
per firm
firm per
per firm
firm
per
firm
firm
firm
firm
2009
2009
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
2009
2010
2009
2010
2010
2011
2010
2011
2012
2011
2012
2011
2012
2012
65
The Small Business Sector Report 2014
Industry profiles
4
Case
Study
Photos Otago Central Rail Trail Trust
Otago Central
Rail Trail
Small businesses help build local
economies
On the Otago Central Rail Trail
The Otago Central Rail Trail has created business
opportunities in small remote regions and improved
the economies of depressed rural Otago towns.
The trail follows an old Central Otago branch railway line
for 150km from Clyde to Dunedin.
It opened in 2000 as a basic track with minimal support
services. More than 180 small businesses now benefit from
the trail. They provide a range of services including bike
hire, luggage and shuttle transfers, guided tours, curling,
66
The Small Business Sector Report 2014
horse riding and high country tours. Others provide farm stays,
farm visits, cafes and accommodation.
The trail is a significant tourism attraction in central Otago
and contributes an estimated $12 million revenue to the local
economy. It has attracted up to 1,000 full-time, part-time and
seasonal jobs into the region, according to a 2008 economic
impact study.
The average rail trailer spends about $472 during their threenight stay in the area.
An estimated 14,000 people from round the world
completed the trail in 2012. Business owners continue
to invest as visitor numbers increase.
www.otagocentralrailtrail.co.nz
industry profiles
Number of firms
NumberNumber
of firmsof firms
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
180
180
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
On average, firm size mirrors building size. Residential building is
mainly made-up of self-employed builders or small building firms, and
those who do a range of alteration and repair work. Non-residential
building and engineering projects are predominantly undertaken by
larger firms.
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
0
0
10,000
0
10,000
0
20,000
10,000
10,000
20,000
30,000
20,000
20,000
30,000
160
160
140
140
120
120
100
100
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
140
140
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
120
120
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
100
100
Zero
Zero (0)
(0)
2005
2000
2000
2005
2010
2005
2005
2010
Zero
Zero (0)
(0)
2010
2010
Worker turnover rate
NumberNumber
of Employees
of Employees
WorkerWorker
turnover
turnover
rate rate
18%
18%
18%
18%
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Zero
Zero (0)
(0)
Zero
Zero (0)
(0)
0
0
10,000
0
10,000
0
10,000
20,000
20,000
10,000
20,000
30,000
30,000
20,000
16%
16%
14%
14%
12%
12%
Trends in contribution to GDP and firm size
120
120
100
100
2000
2000
2000
2000
2005
2005
2005
2005
Construction
Construction
GDP
GDP
Construction
Construction
GDP
GDP
contribution
contribution
contribution
contribution
2010
2010
2010
2010
Value
Value added
added per
per employee
employee ($)
($)
100
100
Index
Index
Index
Index
120
120
140
140
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
14%
14%
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
12%
12%
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
140
140
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
16%
16%
2000
2000
30,000
30,000
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Total
Total
industry
contribution
contribution
contribution
contribution
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Smoothed
Smoothed turnover
turnover
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
4
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
160
160
2000
2000
30,000
30,000
Number of employees
For small businesses, the greatest challenge in the near future is the
unprecedented workload that will be placed on the construction
industry. This is being driven by the Canterbury rebuild, the demand
in Auckland for housing and infrastructure, earthquake-strengthening
work and the weather-tightness remedial work.
180
180
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Compared to other sectors, construction is a relatively homogenous
sector. The main sub-sectors cover residential and non-residential
building construction, heavy and civil engineering, building installation
and building completion services.
The construction sector is one of the few that shows increasing
turnover rates and small firms having the highest rates. This reflects
higher labour mobility as there is high demand for construction
workers, particularly in Auckland and Christchurch.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
Construction
90,000
90,000
90,000
90,000
85,000
85,000
85,000
85,000
80,000
80,000
80,000
80,000
75,000
75,000
75,000
75,000
70,000
70,000
70,000
70,000
Construction
Construction
employeesemployees
employees
per
per
Total industry
industry
Totalemployees
employees
industry employees
employees
Construction
Construction
employees
per
per
Total
Total
industry
firm
firm
per firm
firm per
per firm
firm
firm
firm
per
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
2009
2009
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
2009
2010
2009
2010
2010
2011
2010
2011
2012
2011
2012
2011
2012
2012
67
The Small Business Sector Report 2014
Industry profiles
4
Regional concentration of business units in construction
Regional concentration of business units in construction
Auckland
Canterbury
Wellington
Waikato
Bay of Plenty
Otago
Manawatu-Wanganui
Northland
Hawke's Bay
Taranaki
Southland
Due to the ongoing Canterbury rebuild, construction activity is
very high. Over one in nine businesses in Canterbury are small
businesses operating in the construction industry. Residential
construction activity is predicted to be at the highest levels ever
in Christchurch, with self-employed and small construction firms
set to tackle the challenge.
Tasman
Nelson
Marlborough
Gisborne
West Coast
0
5
10
15
Number of business units with
fewer than 20 employees, (000s)
Percentage of all
business units in region
that have fewer than 20
employees and are in
construction in 2013
11%
10%
9%
8%
7%
68
The Small Business Sector Report 2014
industry profiles
Number of firms
Growth trends for different size firms
This industry covers providers and support services related to education
and training. It includes preschools, schools, universities, technical
colleges, training centres, art schools, tutors and driving schools.
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
This industry has one of the lowest numbers of small firms. The majority
of enterprises such as schools and universities are publicly owned.
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
The majority of firms in the adult and community education subsector are small. They provide a wide variety of services ranging from
tutoring, to sports and recreation coaching, and artistic instruction.
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
0
0
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
140
140
120
120
100
100
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
NumberNumber
of firmsof firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Education and training
500
0
5000
1,000
500 1,500
1,000 2,000
1,500 2,500
2,000
1,000
500
1,500
1,000
2,000
1,500
2,500
2,000
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
20%
20%
15%
15%
20,000
40,000
40,000
20,000
60,000
40,000
60,000
40,000
60,000
60,000
130
130
120
120
110
110
100
100
2000
2000
2010
2010
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
20%
20%
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
15%
15%
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
2005
2005
2005
2005
2010
2010
2010
2010
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Value
Value added
added per
per employee
employee ($)
($)
140
140
2000
2000
2010
2005
2005
2010
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
2000
2000
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
20,000
0
20,000
0
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
Index
Index
Index
Index
110
110
100
100
2005
2000
2000
2005
Zero
Zero (0)
(0)
Trends in contribution to GDP and firm size
120
120
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
100
100
25%
25%
Smoothed
Smoothed turnover
turnover
Smoothed
Smoothed turnover
turnover
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
130
130
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
WorkerWorker
turnover
turnover
rate rate
25%
25%
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
140
140
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Worker turnover rate
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
120
120
2000
2000
2,500
2,500
NumberNumber
of Employees
of Employees
0
0
Zero (0)
(0)
Zero
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Number of employees
Zero
Zero (0)
(0)
Zero (0)
(0)
Zero
140
140
4
80,000
80,000
80,000
80,000
60,000
60,000
60,000
60,000
40,000
40,000
40,000
40,000
20,000
20,000
20,000
20,000
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Total
Total
industry
Education Education
Education
GDP contribution
contribution
GDP contribution
contribution
Education
GDP
GDP
contribution
contribution
contribution
contribution
Education Education
Education
employeesemployees
employees
per
per Total
Total industry
industry
Totalemployees
employees
industry employees
employees
Education
employees
per
per
Total
industry
firm
firm
per
per firm
firm
firm
firm
per firm
firm per
0
0
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
0
0
2009
2009
2009
2010
2009
2010
2010
2011
2010
2011
2012
2011
2011
2012
2012
2012
69
The Small Business Sector Report 2014
Industry profiles
4
Going
for
Growth
Photo credit
Ngati Porou
Seafoods
Group & BDO
HR & Training
Services
The team at BDO Gisborne
SMEs can grow by acquiring multiple
skills in a number of areas
Training and developing key staff can bring significant
benefits to SMEs.
Ngati Porou Seafoods Group harvests, processes and
distributes seafood to key export, national wholesale and
local retail market channels from its Gisborne headquarters.
Part of Te Runanganui o Ngati Porou, and operating since
2005, it employs 30 processing, retail sales and support staff.
Ninety five per cent of staff are Ma- ori or Pacific Islanders.
70
The Small Business Sector Report 2014
General Manager Mark Ngata worked with the East Coast
Regional Business Partner and BDO HR & Training Services
to identify training requirements for senior management.
BDO Gisborne provided a series of eight leadership
development workshops over eight months. Topics included:
improving workplace communication; financial skills; planning,
prioritising & goal setting; managing and motivating individuals
and teams; managing conflict; and delivering effective
performance reviews.
Mark says the business has benefited significantly. “People are
more motivated and productive. They have more knowledge
about how to improve their own performance, and the
business is in a much better position to meet ongoing
challenges and performance targets.”
www.npsl.co.nz
industry profiles
Number of firms
NumberNumber
of firmsof firms
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
0
0
300
300
0 10,000
0
10,000
20,000
10,000
10,000
20,000
200
200
200
200
150
150
150
150
100
100
100
100
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Zero
Zero (0)
(0)
10,000
0
20,000
10,000
30,000
20,000
40,000
30,000
10,000
0 20,000
10,000 30,000
20,000 40,000
30,000 40,000
40,000
Trends in contribution to GDP and firm size
40
40
120
120
80
80
40
40
2000
2000
2000
2000
2005
2005
2005
2005
2010
2010
2010
2010
Finance &
& insurance
insurance
Finance &
& GDP
GDP
insurance GDP
GDP
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Finance
Finance
insurance
Total
Total
industry
contribution
contribution
contribution
contribution
contribution
contribution
contribution
contribution
Finance &
& insurance
insurance
Finance &
& insurance
insurance
Finance
Finance
employeesemployees
employees
per firm
firm per
per firm
firm
employees
per
Value
Value added
added per
per employee
employee ($)
($)
80
80
Index
Index
Index
Index
120
120
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
2005
2000
2000
2005
2010
2005
2005
2010
2010
2010
15%
15%
15%
15%
13%
13%
13%
13%
11%
11%
11%
11%
9%
9%
9%
9%
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
2000
2000
2000
2005
2005
2000
2005
2010
2010
2005
2010
2010
Trends in value add per employee
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
160
160
Smoothed
Smoothed turnover
turnover
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
160
160
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
17%
17%
Total industry
industry
Totalemployees
employees
industry employees
employees
Total
Total
industry
per firm
firm per
per firm
firm
per
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
0
0
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
WorkerWorker
turnover
turnover
rate rate
17%
17%
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Zero
Zero (0)
(0)
Zero (0)
(0)
Zero
Worker turnover rate
NumberNumber
of Employees
of Employees
The Act has also introduced new financing mechanisms for small
businesses looking to raise funds. These include peer-to-peer
lending and equity crowd-funding.
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
250
250
2000
2000
Number of employees
Both small and large firms are also affected by the Financial
Markets Conduct Act 2013 which introduced new governance and
accountability frameworks, and disclosure requirements relating to
financial product offerings.
Zero (0)
(0)
Zero
250
250
20,000
20,000
4
300
300
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
The number and growth of zero-employee firms in this industry
is largely concentrated in financial asset investing. However,
these figures may be misleading as unit trust and holding
company operations are included within this subdivision.
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Finance and insurance services activities include raising funds via
deposits or issuing securities, investing funds, and providing or
underwriting insurance.
The financial markets have undergone much regulatory reform in
recent years. Reform includes the establishment of the Financial
Markets Authority in 2011.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
Financial and insurance
services
200,000 200,000
200,000
200,000
150,000 150,000
150,000
150,000
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
100,000 100,000
100,000
100,000
50,000
50,000
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
50,000
50,000
2009
2009
2010
2009
2010
2009
2011
2010
2011
2010
2012
2011
2012
2011
2012
2012
71
The Small Business Sector Report 2014
Industry profiles
4
Going
for
Growth
Fisher Funds
Some SMEs grow rapidly into larger businesses
Carmel and Hugh Fisher have built a $6 billion fund management business by focusing on doing a few things well.
“We felt that if we could employ talented investment professionals, achieve competitive returns, engage with
our clients and explain how we invested their money, we would be successful,” says Carmel.
The couple founded Fisher Funds as a classic kitchen table business in their Devonport, Auckland, home in
1998 following the birth of their first child.
Carmel had 14 years’ experience managing investment portfolios for large insurance companies. She saw an
opportunity to set up a fund management firm that was different to the “typically large, faceless organisations”
of the time.
Carmel’s previous employer invested $17 million and the Fisher Funds NZ Growth Fund was launched in
August 1998.
After five years, Fisher Funds was managing $500 million on behalf of 9,000 clients.
Photo credit: Fisher Funds
Its strong investment performance drove growth, won the company awards and made it stand apart from
competing fund managers.
Today Fisher Funds employs 50 professionals, managing over $6 billion on behalf of 250,000 clients.
It is a significant fund manager and KiwiSaver provider, known for its candid investor communications.
The company now manages funds across the asset spectrum for clients from around New Zealand.
www.fisherfunds.co.nz
Carmel Fisher
72
The Small Business Sector Report 2014
industry profiles
Number of firms
NumberNumber
of firmsof firms
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
0
0
160
160
2,500
0
2,500
0
5,000
2,500
2,500
5,000
7,500
5,000
5,000
7,500
120
120
100
100
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
140
140
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
120
120
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
100
100
2000
2000
7,500
7,500
Number of employees
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
2005
2000
2000
2005
2010
2005
2005
2010
2010
2010
Worker turnover rate
NumberNumber
of Employees
of Employees
The number of childcare services in the small and small-medium
range has increased significantly.
WorkerWorker
turnover
turnover
rate rate
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Zero
Zero (0)
(0)
Zero
Zero (0)
(0)
0
0
0
50,000
050,000
50,000
100,000 100,000
100,000
50,000
100,000
130
130
120
120
110
110
100
100
2000
2000
2000
2000
2005
2005
2005
2005
2010
2010
2010
2010
Value
Value added
added per
per employee
employee ($)
($)
110
110
100
100
Index
Index
Index
Index
130
130
120
120
12%
12%
12%
12%
10%
10%
10%
10%
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
150
150
140
140
14%
14%
2000
2000
Trends in contribution to GDP and firm size
150
150
140
140
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
14%
14%
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Total
industry
Health GDP
GDPHealth
Health
contribution
GDP contribution
contribution Total
Health
contribution
GDP
contribution
contribution
contribution
contribution
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Smoothed
Smoothed turnover
turnover
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
140
140
4
160
160
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
The majority of zero-employee and micro-sized firms are medical
services (general practitioners, specialists etc) and allied health
services (dentists, physiotherapists, optometrists etc).
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
The health industry includes hospitals, medical services, allied health
services, residential care, childcare and counselling services. They may
be owned and operated either privately or publicly. They include
for-profit or not-for-profit operations.
A move to scale in residential care services (i.e. rest homes) has seen
a fairly significant decline in the number of small and small-medium
businesses and an increase in medium and large firms.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
Health care and social
assistance
40,000
40,000
40,000
40,000
30,000
30,000
30,000
30,000
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
20,000
20,000 20,000
20,000
Total
industry
Total
employees
industry
employees
Total
industry
Total
employees
industry
employees
2009
2009
2010
Health employees
employees
Health employees
employees
per firm
firm per
per firm
firm
2009
2009
2010
Health
Health
per
per firm
firm per
per firm
firm
per
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
2010
2011
2010
2011
2012
2011
2012
2011
2012
2012
73
The Small Business Sector Report 2014
Industry profiles
4
Case
Study
Photo credit: Jackie Clark
Driving Miss
Daisy BOP
Small businesses can deliver a
more personal and tailored service
than corporates
Jackie Clark and Driving Miss Daisy BOP
Driving Miss Daisy helps elderly and disabled people keep
their independence. The business provides personal and
tailored support to people who live alone or who are no
longer confident driving around town.
Jackie Clark set up her personal driver business in 2007
after helping her own mother attend hospital appointments,
go shopping and visit friends. Her mother had lost the
confidence to drive longer distances and felt anxious
when trying to find car parks.
74
The Small Business Sector Report 2014
Jackie’s business is not profit driven but focuses on helping
elderly and disabled people stay in their own homes.
The business operates throughout the Bay of Plenty region.
Jackie was the only driver when she started the business in
2007. Today she has six drivers.
Jackie says small businesses are well placed to provide personal
care and services for New Zealand’s growing elderly population.
She believes there is a need for a community service to
support and take an interest in elderly people trying to
cope with everyday activities that able-bodied younger
people take for granted.
www.driving-missdaisy.co.nz
industry profiles
Number of firms
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
As in other advanced economies, the New Zealand industry is
focusing increasingly on high-tech manufacturing as low-tech
operations move to cheaper labour countries. This shift makes
it hard for small New Zealand manufacturers to compete with
cheaper foreign products.
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
120
120
110
110
100
100
0
0
2,500
0
2,500
0
5,000
2,500
2,500
5,000
7,500
5,000
5,000
7,500
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Zero
Zero (0)
(0)
30,000
0
30,000
0
30,000
60,000
60,000
30,000
60,000
90,000
90,000
60,000
140
140
130
130
120
120
110
110
100
100
2000
2000
2000
2000
2005
2005
2005
2010
2005
2010
2010
2010
2005
2005
Manufacturing
Manufacturing
GDP
GDP
Manufacturing
Manufacturing
GDP
GDP
contribution
contribution
contribution
contribution
2010
2010
2010
2010
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
12%
12%
12%
12%
10%
10%
10%
10%
90,000
90,000
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
2000
2000
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Value
Value added
added per
per employee
employee ($)
($)
100
100
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
2000
2005
2000
2005
14%
14%
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
Index
Index
Index
Index
110
110
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
14%
14%
Trends in contribution to GDP and firm size
120
120
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
100
100
16%
16%
Smoothed
Smoothed turnover
turnover
16%
16%
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
130
130
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
WorkerWorker
turnover
turnover
rate rate
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
140
140
Zero (0)
(0)
Zero
Worker turnover rate
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
4
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
110
110
2000
2000
NumberNumber
of Employees
of Employees
0
0
Zero (0)
(0)
Zero
90
90
7,500
7,500
Number of employees
Zero
Zero (0)
(0)
120
120
90
90
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
Manufacturing small businesses face a number of issues. These
include how to attract high-quality staff, provide good management
and governance, and access capital. Exporters have had to contend
with a persistent higher New Zealand dollar in recent years.
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
NumberNumber
of firmsof firms
Manufacturing is a large and diverse industry. It ranges from
wood and paper, food and beverage, machinery and equipment,
to chemicals and plastics, metals and metal products, and
textile manufacturing.
There has been a sizeable increase in the number of small
businesses producing food commodities such as general food,
dairy and bakery products.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
Manufacturing
120,000
120,000
120,000
120,000
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
100,000 100,000
100,000
100,000
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Total
Total
industry
contribution
contribution
contribution
contribution
Manufacturing
Manufacturing
employeesemployees
employees
Total industry
industry
Totalemployees
employees
industry employees
employees
Manufacturing
Manufacturing
employees
Total
Total
industry
per firm
firm per
per firm
firm
per firm
firm per
per firm
firm
per
per
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
80,000
80,000
80,000
80,000
60,000
60,000
60,000
60,000
2009
2009
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
2010
2009
2009
2010
2011
2010
2010
2011
2012
2011
2011
2012
2012
2012
75
The Small Business Sector Report 2014
Industry profiles
4
Regional concentration of business units in manufacturing
Regional concentration of business units in manufacturing
Auckland
Canterbury
Waikato
Wellington
Bay of Plenty
Manawatu-Wanganui
Otago
Hawke's Bay
Northland
Taranaki
Waikato has a relatively large number of small businesses
in manufacturing.
Southland
Marlborough
A strong dairy industry has provided a firm base for the Waikato
region’s manufacturing industry.The region is also home to
niche manufacturing industries in aviation, plastics, electronics
and automation.
Tasman
Nelson
West Coast
Gisborne
0
2
4
Marlborough is New Zealand’s largest wine-producing region
with over 75 per cent of New Zealand’s total wine production.
6
Number of business units with
fewer than 20 employees, (000s)
Percentage of all
business units in region
that have fewer than 20
employees and are in
manufacturing in 2013
5.5%
5.0%
4.5%
4.0%
3.5%
3.0%
76
The Small Business Sector Report 2014
industry profiles
4
Going
for
Growth
Pakworld
SMEs can create niche manufacturing products
for larger firms
Pakworld has developed its own niche supplying larger local and international
firms by tailoring its environmentally-friendly packaging service to the needs
of each client.
The Port Hills, Christchurch, company has been manufacturing high-quality
packaging for the past 30 years. The family-owned business employs 21 staff.
It supplies packaging for firms such as Burger Fuel, Kathmandu, Patience &
Nicholson, and Prolife Foods. Its customers include some of New Zealand’s
most recognised brands and Pakworld’s export client list includes companies
in Australia, the Middle East and China.
Pakworld values its relationships with customers and has built a reputation for
fast, efficient and environmentally-friendly service. It won work in competition
with a Chinese company by offering a more customised solution for clients.
Photo credit: Jonathan Flett
Pakworld distinguishes itself from competitors by focusing on environmental
sustainability and innovation. It has achieved Forest Stewardship Council
certification and has developed some of its packaging products using recycled
products to meet environment and food standards.
Pakworld has won 15 gold medals during the past decade at New Zealand’s
annual Pride in Print awards.
www.pakworld.co.nz
Pakworld Products
77
The Small Business Sector Report 2014
Industry profiles
Number of firms
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
However, there is a role for small businesses that have integrated
themselves into supply chains and support the industry through
services such as engineering and surveying.
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
The over 100 per cent increase in zero-employee firms is mainly in
mining support services. These include well casting, direction drilling
and redrilling services, and mine draining and pumping services.
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
300
300
200
200
200
200
100
0
100
0
200
100
200
100
300
200
300
200
400
300
400
300
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
The Small Business Sector Report 2014
2,000
1,000
2,000
1,000
3,000
2,000
3,000
2,000
4,000
3,000
4,000
3,000
140
140
120
120
100
100
80
80
2000
2000
2000
2000
2005
2010
2005
2010
2010
2010
20%
20%
20%
20%
16%
16%
16%
16%
12%
12%
12%
12%
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
4,000
4,000
2005
2005
2005
2005
2010
2010
2010
2010
2000
2000
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Mining
Mining
Mining &
& petroleum
petroleum
Mining &
& petroleum
petroleum
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Total
Total
industry
extraction extraction
extraction
GDP
GDP
extraction
GDP
GDP
contribution
contribution
contribution
contribution
contribution
contribution
contribution
contribution
Mining
Mining
Mining &
& petroleum
petroleum
Mining &
& petroleum
petroleum
Total industry
industry
Totalemployees
employees
industry employees
employees
Total
Total
industry
extraction extraction
extraction
employeesemployees
employees
per
per
extraction
employees
per
per
per firm
firm per
per firm
firm
per
firm
firm
firm
firm
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
1,000
0
1,000
0
Value
Value added
added per
per employee
employee ($)
($)
80
80
2000
2005
2000
2005
Zero
Zero (0)
(0)
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
Index
Index
Index
Index
100
100
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
100
100
WorkerWorker
turnover
turnover
rate rate
Trends in contribution to GDP and firm size
120
120
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Mining &
& Mining
&
Mining
Mining &
utilities utilities
utilities
utilities
Smoothed
Smoothed turnover
turnover
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
0
0
Zero (0)
(0)
Zero
Worker turnover rate
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
140
140
Zero (0)
(0)
Zero
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
2000
2000
NumberNumber
of Employees
of Employees
Zero
Zero (0)
(0)
78
100
100
400
400
Number of employees
The Crown Minerals Amendment Act 2013 encourages investment
in petroleum and minerals exploration and development. As industry
activity increases, small businesses will have more opportunities to
either conduct mining and exploration activities themselves or to
provide the types of support services that are typically contracted
out to small firms.
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
300
300
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
0
0
There has also been an increase in micro-sized exploration firms
which predominantly seek to exploit smaller finds, usually onshore.
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
NumberNumber
of firmsof firms
This industry covers the exploration and mining of coal, metals, oil
and gas. Mining and petroleum has the lowest total number of firms.
This is due to the capital intensive nature of the industry and hence
its high barriers to entry.
The number of micro firms involved in mining support services has
also grown.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
4 Mining & petroleum
1,500,000 1,500,000
1,500,000
1,500,000
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
1,000,0001,000,000
1,000,000
1,000,000
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
500,000 500,000
500,000
500,000
2009
2009
2010
2009
2010
2009
2011
2010
2011
2010
2012
2011
2012
2011
2012
2012
industry profiles
4
Regional concentration
of business
units in mining
and petroleum
extraction
Regional
concentration
of business
units in
mining &
petroleum extraction
Taranaki
Auckland
West Coast
Waikato
Canterbury
Wellington
Otago
Northland
Manawatu-Wanganui
Bay of Plenty
Southland
The mining and petroleum industry is one of just two industries for
which Auckland does not provide the highest number of SMEs. The
Taranaki region is the centre of New Zealand’s petroleum and gas
activity, while the West Coast focuses on mining, particularly coal.
Tasman
Hawke's Bay
Marlborough
Gisborne
Nelson
0.00
0.05
0.10
0.15
Number of business units with
fewer than 20 employees, (000s)
Percentage of all
business units in region
that have fewer than 20
employees and are in
mining & petroleum
extraction in 2013
2.0%
1.5%
1.0%
0.5%
79
The Small Business Sector Report 2014
Industry profiles
4
Going
for
Growth
Photo courtesy of Rob Tucker
ECL
SMEs can help regions capture and
retain multinational investment
Taranaki – a powerhouse in the oil and gas industry
Innovative SMEs in Taranaki’s oil and gas supply chain
are contributing to a global industry.
Many people believe the region’s growth depends on a
handful of major international players making largescale finds. Behind the headlines, many small, agile and
innovative local firms have been set up to support the
global oil and gas industry. They provide local solutions
that can be applied to a global market.
80
The Small Business Sector Report 2014
Oil and gas contributes more than $2 billion a year to the
Taranaki region’s GDP. The sector employs more than 5,000 fulltime equivalent employees. Around 70 per cent of development
contracts are awarded to domestic companies and a high
proportion of these are small or medium sized businesses.
Local small business ECL was first set up in a New Plymouth
garage to provide Y2K compliance services. It is now one
of New Zealand’s leading process control and automation
specialists for the oil and gas industry. It recently created
the operating system for the remotely-operated Pohukura
Production Station.
Demand is growing for SMEs’ local knowledge, agility and
specialist expertise. Increased global contract opportunities,
heightened health, safety and environmental considerations,
and extension of the sector beyond the region, look set to
lift demand further.
www.ecl.co.nz
industry profiles
Number of firms
NumberNumber
of firmsof firms
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
0
0
100
100
1,000
0
1,000
0
2,000
1,000
1,000
2,000
3,000
2,000
2,000
3,000
3,000
3,000
Zero
Zero (0)
(0)
Smoothed
Smoothed turnover
turnover
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
21%
21%
Index
Index
Index
Index
40
40
2000
2000
2000
2000
2005
2005
2010
2010
2005
2005
2010
2010
2010
2010
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
12%
12%
12%
12%
2000
2000
5,000
0
10,000
5,000
15,000
10,000
20,000
15,000
25,000
20,000
5,000
20,000
0 10,000
5,00015,000
10,000
15,00025,000
20,000 25,000
25,000
160
160
40
40
2005
2010
2005
2010
18%
18%
15%
15%
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
2000
2005
2005
2000
2005
2010
2010
2005
2010
2010
Trends in value add per employee
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
80
80
2000
2005
2000
2005
15%
15%
Trends in contribution to GDP and firm size
80
80
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
logistics, logistics,
logistics,
logistics,
& media
media &
& media
media
&
21%
21%
18%
18%
Trends Trends
in valueinadd
value
peradd
employee
per employee
150,000 150,000
150,000
150,000
Value
Value added
added per
per employee
employee ($)
($)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
120
120
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
100
100
WorkerWorker
turnover
turnover
rate rate
Smoothed
Smoothed turnover
turnover
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
120
120
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Worker turnover rate
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
160
160
Zero (0)
(0)
Zero
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
150
150
2000
2000
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Zero
Zero (0)
(0)
Zero (0)
(0)
Zero
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
NumberNumber
of Employees
of Employees
0
0
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results. Flow of sales and purchases in the media and
telecommunication industry fluctuates from year to year and may on occasion lead to negative value add figures,
as seen in 2011 for small-medium business in this industry group.
150
150
Number of employees
A decrease in traditional publishing services (newspapers, magazines
and books sales) has coincided with a decline in the size of small
businesses in the publishing sub-industry. An increase in electronic
information and WiFi/smartphone devices may counter this to a
certain extent.
4
200
200
200
200
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
The industry has a low number of small businesses and employees
compared to other industries. But it has one of the fastest growing
zero-employee segments industry-wide. This is a result of an increase
in independent contractors in the screen industry over the past 10 years
which may relate to changes in employment law in this sector.
GrowthGrowth
trends trends
for different
for different
size firms
size firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
The media and telecommunications industry covers many subindustries including motion picture and video activities (also known
as the screen industry), publishing, television and radio broadcasting,
and internet services.
New applications will provide businesses with increased scope
to change the way they manage their businesses and interact
with customers. The roll out of ultra-fast broadband services and
rural initiatives will make this more efficient. It will also increase
opportunities for businesses in rural areas that are willing to adapt
to expand their customer base.
Growth trends for different size firms
Value
Value added
added per
per employee
employee ($)
($)
Media &
telecommunications
100,000
100,000 100,000
100,000
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
50,000
50,000
50,000
50,000
0
0
0
0
Media &
& telecommunications
telecommunications
Media &
& telecommunications
telecommunications
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Media
Media
Total
Total
industry
GDP contribution
contribution
GDP contribution
contribution
contribution
contribution
GDP
GDP
contribution
contribution
Media &
& telecommunications
telecommunications
Media &
& telecommunications
telecommunications
Total industry
industry
Totalemployees
employees
industry employees
employees
Media
Media
Total
Total
industry
employeesemployees
employees
per firm
firm per
per firm
firm
per firm
firm per
per firm
firm
employees
per
per
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
2009
2009
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
2009
2010
2009
2010
2010
2011
2010
2011
2012
2011
2012
2011
2012
2012
81
The Small Business Sector Report 2014
Industry profiles
4
Regional concentration
of business
units in media
and telecommunications
Regional
concentration
of business
units in media &
telecommunications
Auckland
Wellington
Canterbury
Waikato
Otago
Bay of Plenty
Northland
Manawatu-Wanganui
Hawke's Bay
Taranaki
Southland
Although there are a higher number of business units in Auckland,
there is a higher concentration of media and telecommunications
small businesses in Wellington. Very few small businesses in this
industry operate from other parts of the country.
Nelson
Tasman
Marlborough
West Coast
Gisborne
0
1
2
Number of business units with
fewer than 20 employees, (000s)
Percentage of all
business units in region
that have fewer than 20
employees and are in
media &
telecommunications in
2013
2.0%
1.5%
1.0%
0.5%
82
The Small Business Sector Report 2014
industry profiles
4
Case
Study
The New Zealand Film
Commission’s Business
Development Scheme
& Libertine Pictures
Photo credit
High-tech small businesses can
collaborate to build larger businesses
and stimulate industry growth
Richard Fletcher
The New Zealand Film Commission’s Business Development
Scheme encourages small high-tech firm to collaborate and
help the film industry grow.
The Business Development Scheme encourages them to
collaborate to grow. It also promotes the development of
internationally-competitive projects.
The scheme supports the screen sector to make sure local
stories continue to be told. It also helps develop businesses
with the high-quality skills to make this happen. Small
businesses are a big part of this plan.
Libertine Pictures is the scheme’s first funding recipient. It takes
a collaborative approach, linking up specialists and supporting
them with the business expertise and infrastructure they need.
There are more than 1000 post-production businesses
in Wellington alone. Most are sole-operator technical
specialists who work as independent contractors.
Many others are specialist micro and small businesses.
Paul Davis
It will use the funds to run a combination of jointly-owned
collaborative projects, while also pursuing its own whollyowned projects. It understands its partners will also be
forging collaborations with other screen businesses.
Richard says this will stimulate wider growth and activity
in the industry. “And this ultimately benefits everyone.”
“Small business and collaboration with SMEs is key to our plan
and strategy”, says Joint Managing Director Richard Fletcher.
www.nzfilm.co.nz/funding/business-development/businessdevelopment-scheme
Libertine has offices in Wellington and Auckland, and operates
across film and television. It develops New Zealand projects,
and helps to produce and service productions from overseas.
www.libertinepictures.com
83
The Small Business Sector Report 2014
Industry profiles
Number of firms
Growth trends for different size firms
NumberNumber
of firmsof firms
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
180
180
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
‘Other services’ includes personal care services, such as health and
beauty, organisations which promote and defend the interests of
their members, private household staff, and automotive repair and
maintenance services.
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Motor vehicle repair services (local garage/mechanic) and personal
care services (hairdressers) are contributing to the increase in the
number of zero to small-sized businesses in this category.
Zero (0)
(0)
Zero
0
0
160
160
140
140
120
120
100
100
180
180
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
This industry classification is very broad. It includes services that
are not elsewhere classified. The majority of businesses are small
and this is one of the few industries where large firms are not the
biggest employers.
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
4 Other services
2,500
0
2,500
0
5,000
2,500
5,000
2,500
7,500
5,000
5,000
7,500
10,000
7,500
10,000
7,500
10,000
10,000
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
14%
14%
13%
13%
13%
13%
12%
12%
12%
12%
11%
11%
11%
11%
Zero
Zero (0)
(0)
84
The Small Business Sector Report 2014
140
140
Index
Index
Index
Index
130
130
120
120
110
110
100
100
2000
2000
2000
2000
2005
2005
2010
2010
2005
2005
2010
2010
2010
2010
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
2000
2005
2005
2000
2005
2010
2010
2005
2010
2010
Trends in value add per employee
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
Value
Value added
added per
per employee
employee ($)
($)
100
100
2005
2010
2005
2010
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
2000
2000
5,000
0
10,000
5,000
15,000
10,000
20,000
15,000
5,000
0 10,000
5,000 15,000
10,00020,000
15,000 20,000
20,000
Trends in contribution to GDP and firm size
110
110
2000
2005
2000
2005
14%
14%
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Arts, recreation
recreation
Arts, recreation
recreation
& other
other &
& other
other Total
Total
industry
Arts,
Arts,
&
contribution
contribution
services GDP
GDP
services
contribution
GDP contribution
contribution
contribution
contribution
services
services
contribution
GDP
Trends Trends
in valueinadd
value
peradd
employee
per employee
50,000
50,000
50,000
50,000
48,000
48,000
48,000
48,000
46,000
46,000
46,000
46,000
44,000
44,000
44,000
44,000
Arts,
Arts,
&
Arts, recreation
recreation
Arts, recreation
recreation
& other
other &
& other
other Total
industry
Totalemployees
employees
industry employees
employees
industry
Total
industry
services employees
employees
services employees
employees
per
per Total
services
services
per
per
per firm
firm per
per firm
firm
per
firm
firm
firm
firm
Value
Value added
added per
per employee
employee ($)
($)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
120
120
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
100
100
15%
15%
Smoothed
Smoothed turnover
turnover
Smoothed
Smoothed turnover
turnover
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
130
130
Zero (0)
(0)
Zero
WorkerWorker
turnover
turnover
rate rate
15%
15%
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
140
140
Zero (0)
(0)
Zero
120
120
Worker turnover rate
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: These GDP data include art and recreational services as well as other services, as more detailed data
were unavailable. Chain-volume series expressed in 1995/96 prices. All numbers from business demography
statistics are provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
140
140
2000
2000
NumberNumber
of Employees
of Employees
0
0
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Number of employees
Zero
Zero (0)
(0)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
160
160
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
2009
2009
2009
2010
2009
2010
2010
2011
2010
2011
2012
2011
2012
2011
2012
2012
industry profiles
4
Case
Study
Photo credit
Bizbuzz
Industry and professional associations
connect small business owners and
reduce their isolation
Heather Douglas set up Bizbuzz to reduce the professional
and social isolation that comes from being a small business
owner working from home.
Bizbuzz is an online community of over 37,000 registered
members. It provides free access to online tools via the Bizbuzz
website and allows members to improve their home-based
businesses and connect to other like-minded professionals.
“A very large proportion of businesses have their roots in a
home business or very small start-up,” says Heather. “It is
Heather Douglas, Bizbuzz
important to nurture this sector to help those businesses grow
and survive the initial phase.”
She says Pumpkin Patch, Trade Me, Resene and Orcon all
started from home offices.
Heather says the advent of new technologies and social media
has helped remove the stigma attached to home businesses.
“Home business owners are now less isolated and this is only
going to get better. When you are on your own it’s hard to
benchmark and get feedback.”
Bizbuzz members are mostly one- or two-person microbusinesses. Many outsource management functions like
finance and technology to other small businesses. This
helps other small businesses grow.
Bizbuzz is one of many industry and professional
associations helping small businesses grow by providing
networking opportunities, professional development and
advocacy support.
www.bizbuzz.co.nz.
85
The Small Business Sector Report 2014
Industry profiles
Number of firms
Growth trends for different size firms
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
All professional service subsectors have experienced an increase
in the number of small businesses. The largest contributors to the
growth of small business are from architectural and engineering,
legal and accounting, management and consulting and computer
system design services.
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Management and consulting services has seen the biggest growth
of all professions. They have the highest number of zero-employee
and micro-firms in the industry.
Zero (0)
(0)
Zero
0
0
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
150
150
130
130
110
110
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
NumberNumber
of firmsof firms
The professional services industry covers a broad range of
professions. It includes engineering, law, advertising, architecture,
accounting, veterinary, consulting and computer system design.
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
4 Professional services
150
150
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
130
130
Zero (0)
(0)
Zero
110
110
Zero (0)
(0)
Zero
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
10,000
0
10,000
0
20,000
10,000
10,000
20,000
30,000
20,000
20,000
30,000
30,000
30,000
2000
2005
2000
2005
2000
2000
Number of employees
2005
2010
2005
2010
2010
2010
Worker turnover rate
NumberNumber
of Employees
of Employees
WorkerWorker
turnover
turnover
rate rate
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Zero
Zero (0)
(0)
Zero
Zero (0)
(0)
0
0
10,000
0
20,000
10,000
30,000
20,000
40,000
30,000
10,000
0 20,000
10,00030,000
20,00040,000
30,000 40,000
40,000
86
The Small Business Sector Report 2014
120
120
100
100
140
140
120
120
100
100
2000
2000
2000
2000
2005
2005
2005
2005
2010
2010
2010
2010
Value
Value added
added per
per employee
employee ($)
($)
140
140
160
160
14%
14%
14%
14%
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
12%
12%
12%
12%
10%
10%
10%
10%
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
Index
Index
Index
Index
160
160
16%
16%
2000
2000
Trends in contribution to GDP and firm size
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: These GDP data include administrative services as well as professional services, as more detailed data
were unavailable. Chain-volume series expressed in 1995/96 prices. All numbers from business demography
statistics are provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
16%
16%
Trends Trends
in valueinadd
value
peradd
employee
per employee
100,000 100,000
100,000
100,000
Value
Value added
added per
per employee
employee ($)
($)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Smoothed
Smoothed turnover
turnover
Smoothed
Smoothed turnover
turnover
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
95,000
95,000
95,000
95,000
90,000
90,000
90,000
90,000
Professional
Professional
&
&
Professional
Professional
&
&
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Total
Total
industry
85,000 85,000
85,000
administrative
administrative
services services
services
85,000
administrative
administrative
services
contribution
contribution
contribution
contribution
GDP
contribution
GDP
contribution
GDP contribution
GDP contribution
Professional
Professional
&
&
Professional
Professional
&
&
Total industry
industry
Totalemployees
employees
industry employees
employees
Total
Total
industry
2009
2010
2009
administrative
administrative
services services
services
2009
2009
2010
administrative
administrative
services
per firm per firm
employees
per
employeesemployees
employees
per firm
firm per
per firm
firm per firm per firm
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
2011
2010
2010
2011
2012
2011
2011
2012
2012
2012
industry profiles
4
Case
Study
Photo credit: Westpac
Westpac
Business and
Community
Hub
Westpac Business and Community Hub
Many businesses were unable to use their usual premises
after the February 2011 Canterbury earthquake devastated
the Christchurch central business district.
Within 48 hours of the earthquake, Westpac had contacted
every business customer to find out what immediate help
they needed. Within a week it made a relief package available,
including low-interest overdrafts with no application fees,
and access to a special $1 billion loan pool.
Within 60 days it had built a 2,600m2 temporary structure
for displaced businesses and community groups to use. The
Westpac Business and Community Hub (the Hub) helped
business and community organisations continue operating,
with free office space, phone and broadband, meeting and
video conferencing facilities, and a space to host events.
Three years on, the need for the Hub has diminished,
but Westpac continues to offer a wide range of banking
services for small business as the rebuild gathers pace.
www.westpacbusinesshub.co.nz
By the end of 2013, several thousand people from business,
government and not-for-profit groups had used the Hub for
152,000 hours of meetings.
87
The Small Business Sector Report 2014
Industry profiles
Number of firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
There are few firms, and very few small private businesses, in this
sector. The public administration, defence and public safety sector
has the most accentuated concentration of employment in large
firms of all New Zealand’s industries.
Zero (0)
(0)
Zero
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
Zero (0)
(0)
Zero
140
140
120
120
100
100
0
0
0 200
0
200
200 400
200
400
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Zero
Zero (0)
(0)
30,000
0
30,000
0
60,000
30,000
60,000
30,000
90,000
60,000
120,000
90,000
90,000
60,000 120,000
90,000
17.5%
17.5%
17.5%
17.5%
15.0%
15.0%
15.0%
15.0%
12.5%
12.5%
12.5%
12.5%
10.0%
10.0%
10.0%
10.0%
88
The Small Business Sector Report 2014
150
150
130
130
110
110
2005
2005
2005
2005
2010
2010
2010
2010
Value
Value added
added per
per employee
employee ($)
($)
Index
Index
Index
Index
170
170
2000
2000
2010
2010
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
2000
2005
2005
2000
2005
2010
2010
2005
2010
2010
Trends in value add per employee
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
2000
2000
2010
2005
2005
2010
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
2000
2000
120,000
120,000
Trends in contribution to GDP and firm size
110
110
2005
2000
2000
2005
20.0%
20.0%
Smoothed
Smoothed turnover
turnover
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
130
130
Zero (0)
(0)
Zero
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
20.0%
20.0%
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
150
150
Zero (0)
(0)
Zero
100
100
WorkerWorker
turnover
turnover
rate rate
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
170
170
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
120
120
Worker turnover rate
NumberNumber
of Employees
of Employees
0
0
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
2000
2000
400
400
Number of employees
Zero
Zero (0)
(0)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
140
140
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
NumberNumber
of firmsof firms
This includes local and central government administration, judicial
authorities, defence, public order and safety, and regulatory bodies.
The majority of small businesses in the sector provide public order
and safety services. This sub-industry includes body guard, detective
agency, locksmith, night watchman police and security guard services.
These occupations represent almost all the zero-employee firms and
most of the other small firms in this category.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
4 Public administration,
defence and public
safety
100,000 100,000
100,000
100,000
80,000
80,000
60,000
60,000
Government
Government
administration,
administration,
Government
Government
administration,
administration,
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Total
industry
defence, public
public
defence,
safety
public
GDPsafety
safety GDP
GDP Total
defence,
defence,
safety
public
GDP
contribution
contribution
contribution
contribution
contribution
contribution
contribution
contribution
Government
Government
administration,
administration,
Government
Government
administration,
administration,
Total industry
industry
Totalemployees
employees
industry employees
employees
Total
Total
industry
defence, public
public
defence,
safety
public safety
safety
defence,
defence,
safety
public
per firm
firm per
per firm
firm
per
employees
employees
per
firm
per
employeesemployees
per firm per firm
firm
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
80,000
80,000
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
60,000
60,000
2009
2009
2010
2009
2010
2009
2011
2010
2011
2010
2012
2011
2012
2011
2012
2012
industry profiles
Number of firms
NumberNumber
of firmsof firms
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Property operators comprise firms whose core business involves
renting or leasing properties.
Zero (0)
(0)
Zero
0
0
140
140
120
120
100
100
25,000
0
25,000
0
50,000
25,000
50,000
25,000
75,000
50,000
50,000
75,000
75,000
75,000
22.5%
22.5%
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Smoothed
Smoothed turnover
turnover
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
20.0%
20.0%
Zero
Zero (0)
(0)
0
0
2,500
0
2,500
0
2,500
5,000
5,000
2,500
5,000
7,500
7,500
5,000
80
80
140
140
120
120
100
100
80
80
2000
2000
2000
2000
2005
2005
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
2005
2005
2010
2010
2010
2010
WorkerWorker
turnover
turnover
rate rate
22.5%
22.5%
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
20.0%
20.0%
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
17.5%
17.5%
15.0%
15.0%
15.0%
15.0%
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Value
Value added
added per
per employee
employee ($)
($)
120
120
100
100
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
100
100
2000
2000
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
Index
Index
Index
Index
140
140
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
120
120
17.5%
17.5%
7,500
7,500
Trends in contribution to GDP and firm size
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Worker turnover rate
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Zero
Zero (0)
(0)
Zero (0)
(0)
Zero
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
140
140
2000
2000
NumberNumber
of Employees
of Employees
The regulatory reforms from the Real Estate Agents Act 2008 have
affected the real estate services sub-sector. The changes included
the introduction of annual operational levies, which led to a decrease
in the number of registered agents as many were inactive.
Furthermore, in response to the regulatory reforms some smaller
firms have consolidated their businesses into large operations.
4
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Number of employees
As a result, this industry has the lowest average number of
employees per firm.
Zero (0)
(0)
Zero
160
160
Trends Trends
in valueinadd
value
peradd
employee
per employee
300,000
300,000 300,000
300,000
Value
Value added
added per
per employee
employee ($)
($)
Zero (0)
(0)
Zero
160
160
180
180
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Most firms are in the property operators and real estate services
sub-sectors. However, the industry also includes motor vehicle, heavy
machinery equipment hiring, video stores and scaffolding businesses.
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
180
180
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
The rental, hiring and property services industry is dominated by
zero-employee firms. The number of zero-employee firms has grown
80 per cent since 2000.
A large increase in the number of property owners has driven an
upsurge in the number of zero-employee firms. Many of these
property owners are likely to be ‘mum and dad’ investors due to
the passive nature of investment.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
Rental, hiring &
property
250,000 250,000
250,000
250,000
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
200,000
200,000 200,000
200,000
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Rental, hiring
hiring
Rental,
& property
property
hiring &
& property
propertyTotal
Total
industry
Rental,
Rental,
&
hiring
contribution
contribution
services GDP
GDP
services
contribution
GDP contribution
contribution
contribution
contribution
services
services
contribution
GDP
Rental,
Rental,
&
hiring
Rental, hiring
hiring
Rental,
& property
property
hiring &
& property
propertyTotal
industry
Totalemployees
employees
industry employees
employees
industry
Total
industry
services employees
employees
services employees
employees
per
per Total
services
services
per
per
per firm
firm per
per firm
firm
per
firm
firm
firm
firm
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
150,000 150,000
150,000
150,000
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
100,000
100,000 100,000
100,000
2009
2009
2010
2009
2010
2009
2011
2010
2011
2010
2012
2011
2012
2011
2012
2012
89
The Small Business Sector Report 2014
Industry profiles
4
Regional concentration
of business
units inof
rental,
hiringunits
and property
services
Regional
concentration
business
in rental,
hiring &
property services
Auckland
Canterbury
Waikato
Wellington
Bay of Plenty
Otago
Manawatu-Wanganui
Hawke's Bay
Northland
Taranaki
Southland
Marlborough
Nelson
Tasman
Gisborne
West Coast
0
10
20
30
Number of business units with
fewer than 20 employees, (000s)
Percentage of all
business units in region
that have fewer than 20
employees and are in
rental, hiring & property
services in 2013
20%
18%
16%
14%
12%
90
The Small Business Sector Report 2014
industry profiles
4
Case
Study
Tora Coastal Walks
Small business builds community cooperation and
enhances family cohesion
Tora Coastal Walk provides three-day fully-catered walks over private land in the
southern Wairarapa.
The business provides a focal point for the small rural community and benefits many
local people. Surrounding farms have opened up their gardens for viewing along the
walk. Tora employs cleaners to service the accommodation and has hired the local
postal worker to transport walkers’ luggage.
Kiri Elworthy, her family and a group of local farming families set up the business in
1995. From October to the end of April each year the business now attracts around
1,500 visitors. Tora plans to increase this to 2,500 per year.
The business has grown from a part-time operation to an integral part of the founding
families’ livelihoods. It continues to grow. A lodge is being built and Tora now sells a
range of products including a cookbook.
Tora was the first private walk to be set up in the North Island. Since then many other
private walking companies have been established. Tora plans to increase its marketing
to stay ahead of competitors.
Photo credit
www.toracoastalwalk.co.nz
Tora Coastal Walks
91
The Small Business Sector Report 2014
Industry profiles
Number of firms
NumberNumber
of firmsof firms
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
The number of small and small-medium-sized firms in the industry
has fallen. The decrease has been especially notable in the fuel
retailing; and to a lesser extent hardware and building supplies,
and recreational goods retailing sub-sectors.
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
Zero (0)
(0)
Zero
0
0
160
160
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
2,500
0
2,500
0
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
50,000
25,000
75,000
50,000
100,000
75,000
50,000
25,000 75,000
50,000 100,000
75,000 100,000
100,000
120
120
110
110
100
100
2005
2005
2005
2005
2010
2010
2010
2010
Value
Value added
added per
per employee
employee ($)
($)
Index
Index
Index
Index
140
140
130
130
2000
2000
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
18%
18%
16%
16%
16%
16%
14%
14%
14%
14%
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
2000
2000
2000
2005
2000
2005
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
2000
2000
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
100
100
18%
18%
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
25,000
0
25,000
0
Trends in contribution to GDP and firm size
100
100
Zero
Zero (0)
(0)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Zero
Zero (0)
(0)
0
0
120
120
110
110
Zero
Zero (0)
(0)
120
120
WorkerWorker
turnover
turnover
rate rate
Smoothed
Smoothed turnover
turnover
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
140
140
130
130
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Worker turnover rate
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Zero
Zero (0)
(0)
140
140
2000
2000
NumberNumber
of Employees
of Employees
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
The Small Business Sector Report 2014
100
100
5,000
2,500 7,500
5,00010,000
7,50012,500
10,000 12,500
12,500
5,000
2,500
7,500
5,000
10,000
7,500
12,500
10,000
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
92
120
120
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Number of employees
Retailers must also contend with large shopping malls and rising
rental rates in central urban areas.
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: These GDP data include accommodation and restaurants as well as retail trade, as more detailed data
were unavailable. Chain-volume series expressed in 1995/96 prices. All numbers from business demography
statistics are provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
140
140
160
160
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Retail trade is the largest employer of all the industries. This large,
diverse industry ranges from pharmacies, electronic goods, furniture,
clothing and car sales businesses to supermarket grocery and
hardware stores.
The increase of online retailing has affected traditional small and
large retail stores. The growth of online retailing continues to outpace
that of physical retail stores. Consumers are increasingly trying
products in-store and asking staff for advice, before going online
to search for a better price.
Growth trends for different size firms
Smoothed
Smoothed turnover
turnover
4 Retail
45,000
45,000
42,000
42,000
45,000
45,000
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
42,000
42,000
39,000
39,000 39,000
39,000
Retail
Retail
&
Retail trade
trade
Retail
& trade
trade &
&
Total
industry
Total
GDP
industry
GDP
Total
industry
Total
GDP
industry
GDP
accommodation
accommodation
GDP
GDP
accommodation
accommodation
GDP
GDP
contribution
contribution
contribution
contribution
contribution
contribution
contribution
contribution
Retail
Retail
&
Retail trade
trade
Retail
& trade
trade &
&
Total
industry
Totalemployees
employees
industry employees
employees
Total
industry
Total
industry
2009
2009
2010
accommodation
accommodation
employeesemployees
employees
2009
2009
2010
accommodation
accommodation
employees
per firm
firm per
per firm
firm
per
per
per firm
firm per
per firm
firm
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
2010
2011
2010
2011
2012
2011
2012
2011
2012
2012
industry profiles
Regional concentration of business units in retail trade
Regional concentration of business units in retail trade
4
Auckland
Canterbury
Wellington
Waikato
Bay of Plenty
Otago
Manawatu-Wanganui
Northland
Hawke's Bay
Taranaki
Southland
Nelson
Tasman
Marlborough
Gisborne
West Coast
0.0
2.5
5.0
7.5
10.0
Number of business units with
fewer than 20 employees, (000s)
Percentage of all
business units in region
that have fewer than 20
employees and are in
retail trade in 2013
7%
6%
5%
93
The Small Business Sector Report 2014
Industry profiles
4
Case
Study
Chilanga
Banda
Photo credit
Immigrants provide more consumer
choice and promote cultural diversity
Chilanga Banda
Trained chef Luis Rangel brings Mexican street food to
Auckland with his Chilanga Banda Mexican Food Truck
business. Chilanga Banda, ‘the crew from Mexico City’,
is an authentic Mexican food truck painted in traditional
local colours.
Luis started the business in mid-2013 and has been growing
it steadily ever since.
94
The Small Business Sector Report 2014
The Chilanga Banda truck operates at concerts, festivals and
weekend markets in the Auckland region. As a mobile business
it can operate throughout Auckland. This provides a point of
difference to other Mexican restaurants.
The company imports ingredients from North America
and makes its own tortillas from scratch using traditional
Mexican methods.
Luis plans to have multiple food trucks in Auckland
and expand the business to other parts of New Zealand.
He wants to spread Mexican culture around the world.
Luis has a passion for food and his Chilanga Banda
business is giving New Zealanders a genuine
Mexican experience.
industry profiles
Number of firms
Growth trends for different size firms
NumberNumber
of firmsof firms
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Small businesses are concentrated in road freight (truck driver),
road passenger (taxi driver) and postal and courier delivery services.
The main players in rail, air and water freight services are large
state-owned or private businesses with high barriers to entry due
to large capital requirements.
Small
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Micro
Zero (0)
(0)
Zero
The number of zero-employee and micro-sized road freight firms
has decreased since the mid-2000s.
Zero (0)
(0)
Zero
0
0
140
140
130
130
120
120
110
110
100
100
5,000
2,500
5,000
2,500
7,500
5,000
7,500
5,000
10,000
7,500
10,000
7,500
Number of employees
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Small
Micro
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Zero
Zero (0)
(0)
21%
21%
18%
18%
15%
15%
12%
12%
100
100
90
90
2000
2000
2005
2005
Micro
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
2010
2005
2005
2010
2010
2010
2005
2005
2010
2010
2010
2010
logistics,
logistics,
& media
media
&
Micro
Micro (1-5)
(1-5) Micro
Micro (1-5)
(1-5)
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
Small
18%
18%
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
15%
15%
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
12%
12%
2000
2005
2005
2000
2005
2010
2010
2005
2010
2010
Transport &
&Transport
Transport
logistics GDP
GDP
& logistics
logistics GDP
GDP
Total industry
industry
Total
GDP
industry GDP
GDP
Transport
logistics
&
Total
Total
GDP
industry
contributioncontribution
contribution
contributioncontribution
contribution
contribution
contribution
Trends in
Trends
value in
add
value
per add
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
120
120
110
110
Value
Value added
added per
per employee
employee ($)
($)
140
140
130
130
2000
2000
Zero (0)
(0)
Zero
Trends in value add per employee
Trends in
Trends
contribution
in contribution
to GDP and
to GDP
firmand
sizefirm size
Index
Index
Index
Index
100
100
90
90
Zero (0)
(0)
Zero
2005
2000
2000
2005
2000
2000
10,0000
20,000
10,000
30,000
20,000
40,000
30,000
50,000
40,000
10,000
30,000
40,000
50,000
0 20,000
10,000
20,000
30,000
40,000 50,000
50,000
Trends in contribution to GDP and firm size
120
120
110
110
100
100
logistics,
logistics,
& media
media
&
21%
21%
Smoothed
Smoothed turnover
turnover
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
140
140
130
130
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
Worker turnover
Worker turnover
rate
rate
Smoothed
Smoothed turnover
turnover
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
110
110
Worker turnover rate
Large
Large (100+)
(100+)Large
Large (100+)
(100+)
0
0
Small
Small (6-19)
(6-19)Small
Small (6-19)
(6-19)
90
90
NumberNumber
of Employees
of Employees
Zero
Zero (0)
(0)
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
120
120
2000
2000
10,000
10,000
Large (100+)
(100+)Large
Large (100+)
(100+)
Large
130
130
90
90
2,500
0
2,500
0
4
140
140
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
The transport and logistics industry includes the delivery of road,
rail, water and air transport. Transport is an important linkage
industry and displays strong interdependence with other industries
such as petroleum and mining, manufacturing and wholesale.
Growth Growth
trends for
trends
different
for different
size firms
size firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Transport
100,000
100,000
90,000
90,000
80,000
80,000
Transport &
&Transport
Transport
logistics &
& logistics
logistics Total
Total industry
industry
Total
employees
industry employees
employees
Transport
logistics
Total
employees
industry
employees per
per
employees
firm
per firm
firm
per
per firm
firm
employees
employees
firm
per
per firm
firm
per
100,000
100,000
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
Small-medium
Small-medium
(20-49)
(20-49)
Small-medium
Small-medium
(20-49)
(20-49)
90,000
90,000
Micro-smallMicro-small
Micro-small
(1-19)
(1-19)
Micro-small
(1-19)
(1-19)
80,000
80,000
2009
2009
2010
2009
2009
2010
2011
2010
2010
2011
2012
2011
2011
2012
2012
2012
95
The Small Business Sector Report 2014
Industry profiles
4
Case
Study
Findatruckload
Photo credit
Small businesses can exploit niches
overlooked by large businesses
Andrew Bishop and Walter Ormsby created a new
venture after they saw a gap in the market while working
for Mainfreight.
Findatruckload now employs six full-time staff and has sales
revenue of $3 million. It connects over 200 freight trades
a month.
losing revenue and it didn’t make sense. Now businesses
can ride the spot market, utilising extra capacity at a
discounted rate. It’s much more efficient.”
The former employees of the large global supply chain
company set up Findatruckload in 2009. Their company
uses the internet to match businesses with product to move,
with carriers who can take on the freight at short notice.
“There were trucks making empty runs, but we were working
for a large company and weren’t allowed to use them if they
weren’t Mainfreight’s,” said Andrew. “Freight companies were
www.findatruckload.co.nz
96
The Small Business Sector Report 2014
industry profiles
Number of firms
Growth trends for different size firms
The utilities industry is comprised of the electricity market, waste
management, gas and water supply services.
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
The electricity markets have very few small businesses as the
barriers to entry are high due to the capital intensive nature of
the industry. Large firms dominate the industry, reflected by
the high percentage of employment in large businesses.
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
The growth in number of firms in this industry is largely localised
to increases in the waste management industry.
Zero (0)
(0)
Zero
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
Zero (0)
(0)
Zero
175
175
150
150
125
125
100
100
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
NumberNumber
of firmsof firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Utilities
0 200
0
200
200400
200
400
400600
400
600
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Smoothed
Smoothed turnover
turnover
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
2010
2010
16%
16%
16%
16%
12%
12%
12%
12%
Medium
Medium
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
6,000
3,000
6,000
3,000
6,000
9,000
9,000
6,000
9,000
9,000
2000
2000
110
110
100
100
2005
2005
2005
2005
2010
2010
2010
2010
2005
2010
2005
2010
2010
2010
Trends in value add per employee
Value
Value added
added per
per employee
employee ($)
($)
120
120
2000
2005
2000
2005
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
3,000
0
3,000
0
130
130
2000
2000
2010
2005
2005
2010
Zero
Zero (0)
(0)
140
140
2000
2000
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
2005
2000
2000
2005
20%
20%
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
Index
Index
Index
Index
110
110
100
100
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
100
100
20%
20%
Trends in contribution to GDP and firm size
120
120
125
125
WorkerWorker
turnover
turnover
rate rate
Smoothed
Smoothed turnover
turnover
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
130
130
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Mining &
& Mining
&
Mining
Mining &
utilities utilities
utilities
utilities
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
0
0
Zero (0)
(0)
Zero
Worker turnover rate
NumberNumber
of Employees
of Employees
140
140
Zero (0)
(0)
Zero
150
150
2000
2000
600
600
Number of employees
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
175
175
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
0
0
Zero
Zero (0)
(0)
4
400,000 400,000
400,000
400,000
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
300,000
300,000 300,000
300,000
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
200,000
200,000 200,000
200,000
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Total
Total
industry
Utilities GDP
GDP
Utilities
contribution
GDP contribution
contribution
Utilities
Utilities
contribution
GDP
contribution
contribution
contribution
contribution
Utilities employees
employees
Utilities employees
employees
per
per Total
Total industry
industry
Totalemployees
employees
industry employees
employees
Utilities
Utilities
per
per
Total
industry
firm
firm
per
per firm
firm
firm
firm
per firm
firm per
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
100,000 100,000
100,000
100,000
2009
2009
2010
2009
2009
2010
2011
2010
2010
2011
2012
2011
2011
2012
2012
2012
97
The Small Business Sector Report 2014
Industry profiles
4
Case
Study
Photo credit
Outpost
Central
Small businesses in global markets
Outpost Central is an innovative small business with big
plans. Entrepreneurs James Riddell and Jedd Forbes
set up the business in 2002.
Outpost Central’s smart water meters can help water
utilities, mining and farming organisations save around
20 per cent of their water use within the first year. The
meters collect data at five minute intervals and send it for
analysis. The system alerts customers of any irregularities
and helps them understand how they are using the water.
98
The Small Business Sector Report 2014
Outpost Central’s ambitious goal is for every household in
the world to have one of its smart meters. Although there is
still a long way to go, the business already has customers in
New Zealand, Australia, Africa and Europe and has expanded
its team from two employees to fifteen.
Outpost Central won $100,000 prize money for GE’s first
ecomagination challenge in Australia and New Zealand. The
win recognises breakthrough commercial ideas for reducing
carbon footprints.
The business has also won the Environment and Agriculture
category at the 2012 New Zealand Innovators Awards and
was a finalist in the 2012 New Zealand Hi-Tech awards.
It has been recognised as one of the fastest-growing
tech companies in Asia Pacific in the Deloitte Fast 500,
was named one of the fastest growing businesses in
New Zealand in the Deloitte Fast 50 and was one of three
prize winners in the Entrepreneurs’ Challenge.
www.outpostcentral.com
industry profiles
Number of firms
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
Wholesaling activities can be divided into distribution and marketing.
Distribution is the physical sorting, storage and movement of goods.
Marketing determines where the goods go, in what quantities, and
what they cost.
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
Small-medium sized firms have experienced a significant increase
in productivity, while other firms have shown lesser increases.
Zero (0)
(0)
Zero
GrowthGrowth
trends for
trends
different
for different
size firms
size firms
Zero (0)
(0)
Zero
0
0
2,500
0
2,500
0
5,000
2,500
2,500
5,000
7,500
5,000
5,000
7,500
130
130
120
120
110
110
100
100
90
90
Number of employees
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Zero
Zero (0)
(0)
10,000
0
10,000
0
10,000
20,000
20,000
10,000
20,000
30,000
30,000
20,000
130
130
120
120
110
110
100
100
2000
2000
Zero
Zero (0)
(0)
2000
2005
2000
2005
2005
2010
2005
2010
Zero
Zero (0)
(0)
2010
2010
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
13%
13%
13%
13%
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
12%
12%
12%
12%
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
Micro
11%
11%
11%
11%
Small
Small
Small (6-19)
(6-19)
Small (6-19)
(6-19)
10%
10%
10%
10%
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
2000
2000
30,000
30,000
2005
2005
2005
2005
Wholesale Wholesale
Wholesale
trade GDP
GDP trade
trade GDP
GDP
Wholesale
trade
contribution
contribution
contribution
contribution
2010
2010
2010
2010
2000
2005
2005
2000
2005
2010
2010
2005
2010
2010
Trends in value add per employee
Value
Value added
added per
per employee
employee ($)
($)
140
140
2000
2000
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
90
90
14%
14%
Trends Trends
in contribution
in contribution
to GDP to
and
GDP
firm
and
size
firm size
Index
Index
Index
Index
110
110
100
100
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
100
100
14%
14%
Trends in contribution to GDP and firm size
120
120
Micro
Micro (1-5)
(1-5)Micro
Micro (1-5)
(1-5)
110
110
15%
15%
Smoothed
Smoothed turnover
turnover
Small (6-19)
(6-19)
Small (6-19)
(6-19)
Small
Small
130
130
Large (100+)
(100+)
Large (100+)
(100+)
Large
Large
15%
15%
Trends Trends
in valueinadd
value
peradd
employee
per employee
Value
Value added
added per
per employee
employee ($)
($)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
Small-medium
Small-medium
(20-49)
140
140
120
120
WorkerWorker
turnover
turnover
rate rate
Smoothed
Smoothed turnover
turnover
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
0
0
Medium (50-99)
(50-99)
Medium (50-99)
(50-99)
Medium
Medium
4
Worker turnover rate
NumberNumber
of Employees
of Employees
Zero
Zero (0)
(0)
130
130
2000
2000
7,500
7,500
Large
Large
Large (100+)
(100+)
Large (100+)
(100+)
Number of firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Growth trends for different size firms
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Number of employees
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
Worker turnover rate
Source: Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.Stat
Notes: Data for quarters 3 and 4 of 2012 are provisional. These data exclude self-employed people.
Trends in contribution to GDP and firm size
Source: System of National Accounts, GDP(P), Chain volume, Actual, ANZSIC06 high-level industry groups
(Annual-Mar), Statistics New Zealand. Access via Infoshare. Business demography statistics, Statistics
New Zealand, 2013. Access via NZ.Stat
Notes: Chain-volume series expressed in 1995/96 prices. All numbers from business demography statistics are
provisional. For full notes, consult Statistics New Zealand
Trends in value add per employee
Source: Annual Enterprise Survey, custom data supplied by Statistics NZ
Notes: Data for 2011 and 2012 are provisional. All figures exclude GST. Data exclude residential property
operators, religious services, private households employing staff, and superannuation funds. This is an estimate
of value added determined by Annual Enterprise survey results.
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
NumberNumber
of firmsof firms
This industry contains many sub-sectors and encompasses almost
every type of good: agricultural products, minerals, timber, machinery,
textiles, furniture and groceries.
While there are numerous small wholesalers across the entire
spectrum of goods, furniture and floor covering wholesaling
has the highest number of small businesses and over twice
as many zero-employee firms.
Growth trends for different size firms
Number
Number of
of firms
firms
(indexed;
(indexed; 2000
2000 == 100)
100)
Wholesale trade
110,000
110,000
110,000
110,000
Small-medium
Small-medium
(20-49)
Small-medium
Small-medium
(20-49) (20-49)
(20-49)
100,000 100,000
100,000
100,000
90,000
90,000
Total industry
industry
TotalGDP
GDP
industry GDP
GDP
Total
Total
industry
contribution
contribution
contribution
contribution
Wholesale Wholesale
Wholesale
trade employees
employees
trade employees
employees
Total industry
industry
Totalemployees
employees
industry employees
employees
Wholesale
trade
trade
Total
Total
industry
per firm
firm per
per firm
firm
per firm
firm per
per firm
firm
per
per
Medium-large
Medium-large
(50+)
(50+)
Medium-large
Medium-large
(50+)
(50+)
Micro-small
Micro-small
(1-19)
(1-19)
Micro-small
Micro-small
(1-19)
(1-19)
90,000
90,000
2009
2009
2010
2009
2009
2010
2011
2010
2010
2011
2012
2011
2011
2012
2012
2012
99
The Small Business Sector Report 2014
Industry profiles
4
Regional concentration of business units in wholesale trade
Regional concentration of business units in wholesale trade
Auckland
Canterbury
Wellington
Waikato
Bay of Plenty
Manawatu-Wanganui
Otago
Hawke's Bay
Northland
Taranaki
Southland
The New Zealand distribution sector is firmly based in South
Auckland. The concentration of major distribution centres in
South Auckland is a national resource. The majority of the
imported goods sold in New Zealand will pass through a
South Auckland facility before reaching the end user because
61 per cent of imports to New Zealand by value are imported
through Ports of Auckland or Auckland airport.
Nelson
Marlborough
Tasman
Gisborne
West Coast
0.0
2.5
5.0
7.5
Number of business units with
fewer than 20 employees, (000s)
Percentage of all
business units in region
that have fewer than 20
employees and are in
wholesale trade in 2013
5%
4%
3%
Source: Business demography statistics, Statistics New Zealand, 2013. Access via NZ.Stat
Notes: All numbers are provisional. For full notes, consult Statistics New Zealand.
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industry profiles
4
Case
Study
Central Flower
Wholesalers
Small businesses can provide strong customer service
through wholesaling
A strong focus on a few wholesale customers is helping Central Flower Wholesalers to grow.
Wellington-based husband and wife Dave and Cushla Cannings knew little about wholesaling
or working together when they entered the flower distribution business 18 years ago. Cushla
had experience as a manager and florist, and Dave knew about business and sales through
his seven years as a car salesperson. They learnt by trial and error, asking questions of people
in the industry.
They liked the wholesale model of bulk-selling to a small group of customers.
“We have a very strong loyal client base and we make sure we look after them exceptionally
well,” says Dave.
“We keep things simple. The industry is quite antiquated as far as the internet goes. Most
of our customers don’t use the net to talk to us. Our customers at the supermarkets, for
example, don’t have access to the internet and they don’t need to,” he says.
Dave says establishing a professional structure between himself and Cushla was the key
to a good working partnership.
Photo credit
“We sat down many years ago and discussed the business. We both have different roles with
not a lot of cross-over but we work as a good team,” he says. “It’s satisfying and personal.
You retain the profits in life but you need to have a good marriage to make it work.”
www.centralflowers.co.nz
Flower wholesaler
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5
Description of
Data Sources
and Data
References
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Description of Data Sources and Data References
5
Description of Data Sources and Data References
Annual Enterprise Survey
Linked employer-employee data
The Annual Enterprise Survey (AES) is New Zealand’s most comprehensive source of financial statistics.
Survey data from around 16,000 businesses is combined with data from Inland Revenue, Treasury, the
New Zealand Companies Office, the Charities Commission and Statistics New Zealand to produce annual
information on financial performance and financial position for industry and sector groups operating
within New Zealand.
The Linked Employer-Employee Data (LEED) provides information on New Zealanders’ interaction with the
labour market and their sources of income. The longitudinal nature of the data allows analysis of income
transitions, job tenure, multiple job holding, and self-employment. LEED uses existing administrative data
drawn from the taxation system, together with business data from Statistics NZ’s Business Frame.
The Annual Enterprise Survey excludes residential property operators, foreign government representation,
religious services, and private households employing staff. Superannuation funds are excluded from the
tables released by Statistics New Zealand, including those used in this report.
The LEED annual statistics cover all individuals who either receive income from which tax is deducted at
source, or from self-employment. By contrast, the LEED quarterly statistics do not include self-employed
people. A full description of the scope of the Annual and Quarterly LEED statistics can be found on
Statistics New Zealand’s website (http://www.stats.govt.nz/).
Annual Enterprise Survey, custom data supplied by Statistics NZ
Quarterly Linked Employer-Employee Data (LEED), Statistics New Zealand, 2014. Access via NZ.stat (http://nzdotstat.stats.govt.nz/wbos/Index.aspx)
Annual Linked Employer-Employee Data (LEED), custom data supplied by Statistics New Zealand.
Business Demography Statistics
The Business Demography Statistics are an annual snapshot (as at February) of the structure and
characteristics of New Zealand businesses. The series covers economically significant enterprises that
are engaged in the production of goods and services in New Zealand and is based on the Longitudinal
Business Frame. Non-trading or dormant enterprises are excluded from Business Demography Statistics.
Business demography statistics, Statistics New Zealand, 2013. Access via NZ.stat (http://nzdotstat.stats.govt.nz/wbos/Index.aspx)
Business Operations Survey
The Business Operations Survey collects information on the operations of New Zealand businesses. This
information is used to quantify business behaviour, capacity, and performance. The survey gives insights
into business activities, barriers, and motivations, and effects behind New Zealand business operations.
The survey is run annually. Information is collected from approximately 6,000 private enterprises operating
in New Zealand with six or more employees. A full description of the scope of the Business Operations
Survey can be found on Statistics New Zealand’s website (http://www.stats.govt.nz/).
Business Operations Survey, 2010. Access via Statistics New Zealand website (http://stats.govt.nz/browse_for_stats/businesses/business_growth_and_innovation/
business-operations-survey-info-releases.aspx)
Business Operations Survey, 2011. Access via Statistics NZ website (http://stats.govt.nz/browse_for_stats/businesses/business_growth_and_innovation/business-operationssurvey-info-releases.aspx)
Business Operations Survey, 2012. Access via Statistics NZ website (http://stats.govt.nz/browse_for_stats/businesses/business_growth_and_innovation/business-operationssurvey-info-releases.aspx)
Business Operations Survey, 2013. Access via Statistics NZ website (http://stats.govt.nz/browse_for_stats/businesses/business_growth_and_innovation/business-operationssurvey-info-releases.aspx)
MYOB Business Monitor
The MYOB Business Monitor is a national survey of approximately 1,000 New Zealand small and medium
business owners and managers, representing the major industry sectors. The Monitor researches business
performance and attitudes in areas such as profitability, cash flow, pipeline, technology usage and the
government. The MYOB Business Monitor is commissioned by Mind Your Own Business (MYOB), surveying
both MYOB clients and non-clients. More information and releases from the MYOB Business monitor can be
found on MYOB’s website (www.myob.co.nz).
NZ Business Monitor wave 2, 2013. Mind Your Own Business (MYOB).
Quarterly employment survey
The Quarterly Employment Survey (QES) estimates the demand for labour by New Zealand businesses.
It estimates the levels and changes in employment, total weekly gross earnings, total weekly paid hours,
average hourly and average weekly earnings, and average weekly paid hours in the industries surveyed.
The QES estimates the number of jobs filled, not the number of people employed. This means a person
with multiple jobs during the reference week could be counted multiple times.
The QES surveys approximately 18,000 business units from economically significant enterprises per
quarter. The QES does not include the earnings of those working in agriculture, fisheries, several smaller
industries or earnings from self-employment. A full description of the scope of the QES can be found on
Statistics New Zealand’s website.
Quarterly Employment Survey, custom data supplied by Statistics New Zealand, 2013.
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Description of Data Sources and Data References
5
Further reading: information on the New Zealand economy
Publication
Available from
Publication
Available from
The Regional Economic Activity Report 2013
www.mbie.govt.nz
Tourism Satellite Account (2013).
www.stats.govt.nz
The Regional Economic Activity Report presents available official
economic data on New Zealand’s 16 regions. The report, which
will be annual, provides regional economic information sourced
from a number of government agencies.
Regional Government Expenditure Report
Published annually, the Tourism Satellite Account provides a picture
of the role tourism plays in New Zealand, including the changing
levels and impact of tourism activity, and the industry’s contribution
to the economy.
www.mbie.govt.nz
The Regional Government Expenditure Report provides the first
ever snapshot and analysis of estimated central government
spending for each region in New Zealand.
Situation and Outlook for Primary Industries
(SOPI) 2013
www.mbie.govt.nz
The Sectors Series are reports on selected sectors in the
New Zealand economy.
www.mpi.govt.nz
Published annually, this report provides up-to-date information about
the performance of New Zealand’s primary sectors – dairy, meat and
wool, forestry, horticulture, arable and, for the first time, seafood –
and gives independent forecasts of future prospects.
The Food and Beverage Information
Project reports
The Sectors Series
Seven reports have been released to date:
• Information and Communication Technology
• High Technology Manufacturing
• Petroleum and Minerals
• Construction
• Tourism
• Knowledge Intensive Services
• The Sectors Report 2014
www.foodandbeverage.govt.nz
The project pulls together all the available information on the food
and beverage industry into one place, in a form which is familiar and
useful to business. Over 20 reports are available on every aspect
of New Zealand’s food industry, including information on export
market and investment opportunities. New and updated reports
are released annually.
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Description of Data Sources and Data References
5
Further reading: the Government’s
Business Growth Agenda reports
Publication
Available from
Building innovation
www.mbie.govt.nz
The building innovation work stream of the Business Growth Agenda aims
to grow New Zealand’s economy by encouraging and enabling investment
in research and development, and lifting the value of public investments in
science and research.
Export markets
www.mbie.govt.nz
www.mbie.govt.nz
The Business Growth Agenda Progress Report 2013 shows the significant
progress the Government has made across each of the six areas that are
critical to business success and growth: Export Markets, Capital Markets,
Innovation, Skilled and Safe Workplaces, Natural Resources and Infrastructure.
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The Small Business Sector Report 2014
Raewyn Bleakley – Wellington Employers Chamber of Commerce
Samantha Seath - EDANZ
Statistics New Zealand
www.mbie.govt.nz
www.mbie.govt.nz
www.mbie.govt.nz
The building capital markets work stream of the Business Growth Agenda
aims to ensure New Zealand has high performing capital markets that
support investment, growth and jobs.
Business Growth Agenda Progress Report 2013
XERO
Dr Martina Battisti – Massey University
The skilled and safe workplaces work stream of the Business Growth Agenda
aims to improve the safety of the workforce and build sustained economic
growth through a skilled and responsive labour market.
Building capital markets
The Ministry of Business, Innovation and Employment would like to acknowledge the contributions of the
following to this report:
Steve Summers - BusinessNZ
The building natural resources work stream of the Business Growth Agenda
aims to make better use of New Zealand’s abundant natural resources, so we
can continue to grow our economy and look after our environment.
Skilled and safe workplaces
ACKNOWLEDGEMENTS
MYOB
The building infrastructure work stream of the Business Growth Agenda aims
to provide the physical platform that will support sustained economic growth.
Natural resources
The Ministry of Business, Innovation and Employment welcomes feedback on this report, including any
feedback relating to measures the Government is taking to facilitate the development of a competitive
and successful small business sector.
The Small Business Development Group
The export markets work stream of the Business Growth Agenda aims
to increase exports by New Zealand businesses, which is necessary to
lift New Zealand’s economic growth and living standards.
Building infrastructure
FEEDBACK AND COMMENTS
www.mbie.govt.nz
Case study subjects
5
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