◊
July 2015
SMALL BUSINESSES
IN NEW ZEALAND
How do they compare with larger firms?
◊
SMALL BUSINESSES* DOMINATE OUR INDUSTRIES
97%
Chart 1: Number of Enterprises by Employee Size
Group
OF ENTERPRISES HAVE FEWER
THAN 20 EMPLOYEES (473,846
ENTERPRISES) (CHART 1)
Zero Employees
69%
98,030
OF ENTERPRISES HAVE ZERO
EMPLOYEES (CHART 1)
338,745
1-5 Employees
TOTAL
487,875
96%
MB 13221 May 15
OF ENTERPRISES WITH FEWER THAN
20 EMPLOYEES ARE INDEPENDENT
OPERATIONS NOT OWNED BY
OTHERS (CHART 5)
*Small businesses are defined here as
those enterprises with fewer than
20 employees. There is no official
definition of a small business in
New Zealand, however enterprises
with fewer than 20 employees has
traditionally been used and referred
to in some legislation. Australia
also uses the same definition which
enables comparisons to be made.
Internationally there is no universally
used definition for a small business:
many economies use a limit higher
than 20 employees.
21,335
50,180
Professional, scientific &
technical services
Information, media &
communications
51,716
Arts & recreation services
9,224
Administrative & support
services
Transport, postal &
warehousing
13,964
Retail trade
25,336
Wholesale trade
15,985
Healthcare & social
assistance
Accommodation &
food services
16,355
Chart 2: Number of Employees by Employee Size
Group
1-5 Employees
228,880
6-19 Employees
THE RENTAL, HIRING, AND REAL
ESTATE SERVICES INDUSTRY
HAS THE HIGHEST NUMBER OF
ENTERPRISES WITH FEWER THAN 20
EMPLOYEES (CHART 4)
66,980
Construction
Data source: Statistics New Zealand Business Demography, Feb 2014
1,995,330
31,581
Other services
4,843
TOTAL
Finance & insurance
services
Agriculture, Forestry
& Fishing
37,071
50 Or More Employees
27%
OF NEW ZEALAND’S GDP IS
ESTIMATED TO BE PRODUCED BY
ENTERPRISES WITH FEWER THAN 20
EMPLOYEES (CHART 3)
105,821
Rental, hiring & real estate
20-49 Employees
9,186
30%
OF EMPLOYEES IN NEW ZEALAND
ARE EMPLOYED BY ENTERPRISES
WITH FEWER THAN 20 EMPLOYEES
(597,500) (CHART 2)
6-19 Employees
Chart 4: Number and Percentage of Enterprises
with 0-19 Employees by Industry
368,620
50 Or More Employees
1,124,750
Utilities
1,004
Manufacturing
18,720
Public administration
& safety
1,007
Education & training
6,031
0%
0-19 employees
Chart 3: Estimated Contribution to GDP by
Employee Size Group
$56,785m
17,519
673
Data source: Statistics New Zealand Business Demography, Feb 2014
0-19 Employees
15,505
Mining
20-49 Employees
273,070
4,910
50%
Data source: Statistics New Zealand Business Demography, Feb 2014
Chart 5: Percentage of Enterprises with Common
Ownership
20-49 Employees
TOTAL
$13,791m
$210,299m
50 Or More Employees
45%
20%
$94,506m
Excluded Industries /
Other Items
$45,217m
Data source: Statistics New Zealand, National Accounts Mar 2012
100%
20 or more employees
4%
0-19
20-49
50+
Number of employees
Data source: Statistics New Zealand Business Demography, Feb 2014
◊
SMALL BUSINESSES ARE YOUNG AND DYNAMIC
OF FIRMS WITH 1-19 EMPLOYEES
HAVE EXISTED FOR FIVE YEARS
OR FEWER. THIS COMPARES
TO 16% FOR LARGER FIRMS
(CHART 7)
0
1-5
Number of employees
50%
OF FIRMS WITH ZERO
EMPLOYEES BORN IN 2010
CEASED TO EXIST BY 2014.
FIRMS WITH 1-19 EMPLOYEES
HAVE SIMILAR SURVIVAL
RATES TO FIRMS WITH 10-49
EMPLOYEES, BUT MUCH LOWER
THAN LARGER FIRMS (CHART 8)
21
15
45
9 10
6-19
17
72
5
54
81
20-49 3
4 53
76
50-99
4 4 13
75
100+
42%
Chart 7: Age of Enterprise by Employee Size
Group (%)
5 3 15
69
53
Trusts/Estates
Partnership
Societies and Associations
Registered Limited Liability Company
All Other Entities
1-19
6
29
25
28
16
25
17
25
27
< 1 year
Number of employees
50%
50%
64%
1-5
1-5 years
6-10 years
11-20 years
21+ years
40,714 42,018 42,775
69%
31%
65%
35%
65%
35%
6-19
20-49
50-99
100+
79%
21%
80%
20%
Survived in 2014
123,750
1-19
29,230
2011
27,670
Data source: Statistics New Zealand Annual Enterprise Survey, Aug 2014
9,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Number of employees
2012
2005
2006
2007
2008
2009
2010
2011
Chart 12: Percentage of Businesses Undertaking R&D
Chart 13: Percentage of Businesses Exporting
11%
12%
13%
13%
23% 23%
10%
7%
7%
16%
6%
2013
Births
Data source: Statistics New Zealand Business Demography, Feb 2014
14%
2012
2013
Data source: Statistics New Zealand Linked Employer-Employee Data, Sep 2011-13
12%
2013
8,000
20+
2011
2012
Chart 11: Births and Deaths of Employing Small Business
108,990 109,910
20-49
20+
Number of employees
Ceased by 2014
Number of enterprises
100,440
7%
39
54,822
51,925 53,926
36%
Chart 10: Annual Job Creation by Employee Size Group
6%
17
Chart 9: Average Salaries and Wages per Employee (RME)
Data source: Statistics New Zealand Business Demography, Feb 2014
6%
13
Chart 8: Survival Rates of Enterprises Born in 2010
WAS THE AVERAGE SALARY OF
EMPLOYEES IN ENTERPRISES
WITH 1-19 EMPLOYEES (CHART 9)
6%
23
Data source: Statistics New Zealand Business Demography, Feb 2014
$42,775
1-19
11
Data source: Statistics New Zealand Business Demography, Feb 2014
0
27,430
0
20+
22
Individual Proprietorship
OF ALL JOBS CREATED IN THE
YEAR ENDING SEPTEMBER
2013 WERE IN FIRMS WITH 1-19
EMPLOYEES (CHART 10)
96,540 98,560
Number of employees
34%
Chart 6: Type of Enterprise by Employee Size
Group (%)
12%
13%
21%
23%
24%
26%
2014
Deaths
28% 29%
30%
22%
15%
2008 2009 2010 2011 2012 2013 2014
2008 2009 2010 2011 2012 2013 2014
2008 2009 2010 2011 2012 2013 2014
2008 2009 2010 2011 2012 2013 2014
6-19 employees
20+ employees
6-19 employees
20+ employees
Data source: Statistics New Zealand Business Operations Survey, 2014
Data source: Statistics New Zealand Business Operations Survey, 2014
◊
ZERO-EMPLOYING FIRMS GENERATE VALUE
$193,000
Chart 14: Zero-Employing Firms by Industry
WAS THE AVERAGE REVENUE PER
ENTERPRISE FOR FIRMS WITH
ZERO EMPLOYEES IN 2013. THIS
COMPARES WITH AN AVERAGE
REVENUE OF $178,000 FOR FIRMS
WITH 1-19 EMPLOYEES (ANNUAL
ENTERPRISE SURVEY, AUG 2014)
Rental, hiring & real estate
Construction
100,454
32,675
TOTAL
Agriculture, forestry & fishing
Finance and insurance services
338,745
46,950
28,992
Professional, scientific
& technical services
All others
30%
OF FIRMS WITH ZERO EMPLOYEES
ARE IN THE RENTAL, HIRING AND
REAL ESTATE INDUSTRY
(CHART 14)
◊
91,147
37,727
Data source: Statistics New Zealand Business Demography, Feb 2014
SELF-EMPLOYED ARE ALSO SMALL BUSINESS
43%
OF SELF-EMPLOYED ARE OVER
THE AGE OF 50. MOST OF THE
GROWTH IN SELF-EMPLOYMENT
OVER THE PAST DECADE
COME FROM THOSE OVER 50,
WHILE SELF-EMPLOYMENT OF
YOUNGER AGE GROUPS HAS
FALLEN (CHART 15)
Chart 15: Self-Employed by Age and Sex
TOTAL
391,566
15-19
50-59
4,524
105,618
20-29
60-65
30,900
40,248
30-39
65+
74,370
23,610
40-49
16%
OF THE SELF-EMPLOYED
WORK IN THE CONSTRUCTION
INDUSTRY (CHART 16)
10%
OF MĀORI RUN THEIR OWN
BUSINESSS, BEING EITHER
SELF-EMPLOYED, OR
EMPLOYING OTHERS
Female
112,299
Male
147,687
243,876
Data source: Statistics New Zealand Linked Employee-Employer Data, 2013
Chart 16: Self-Employed by Industry
TOTAL
391,566
Construction
Rental, hiring & real estate
61,599
25,341
Professional, scientific
& technical services
Retail trade
24,849
55,470
All others
Agriculture, forestry & fishing
173,883
50,427
Data source: Statistics New Zealand Linked Employee-Employer Data, 2013
Chart 17: Self-Employed by Ethnicity
*In this factsheet, data on numbers in
self-employment comes from linked
employee–employer data. A person
is self-employed if they derive the
majority of their income in one tax
year from self employment. A person
can be self-employed and also work
as an employee in another business. A
person who is self-employed at multiple
businesses is only counted once.
Self-employed
Rest of employed
Pacific Peoples
Data source: Statistics New Zealand Census 2013
Māori
Total
◊
SMALL FIRMS FACE UNIQUE CHALLENGES
EMPLOYMENT
35%
OF EMPLOYEES AT FIRMS WITH
1-5 EMPLOYEES WERE PARTTIME. THIS COMPARES WITH
34% FOR FIRMS WITH 6-19
EMPLOYEES, AND 30% FOR
FIRMS WITH 20-49 EMPLOYEES
(CHART 18)
FOR BUSINESSES WITH 6-19
EMPLOYEES:
Full-time jobs
Part-time jobs
205,420
95%
151,960
125,860
104,990
67,170
53%
OF FIRMS WITH 6-19
EMPLOYEES HAD HARD TO
FILL VACANCIES IN 2014. THIS
IS BROADLY SIMILAR TO THE
PERCENTAGE OF FIRMS WITH
20+ EMPLOYEES
(CHART 19)
ACCESS TO ICT
Chart 18: Full-time/Part-time Employment by Employee Size Group
66,430
1-5
6-19
USE THE INTERNET
92%
20-49
ARE CONNECTED BY
BROADBAND
Number of employees
Data source: Statistics New Zealand Quarterly Employment Survey, 2014
66%
Chart 19: Percentage of Firms with Hard to Fill Vacancies by
Employee Size Group
HAVE A WEBSITE
2008
2013
67%
59%
2014
56%
53%
44%
49%
44%
HAVE INTERNET SALES
6-19
20-49
Number of employees
*Data source: Statistics New Zealand
Business Operations Survey, 2014
Data source: Statistics New Zealand Business Operations Survey, 2014
Chart 20: Percentage of Firms Accessing Debt Financing on Acceptable Terms
ACCESS TO FINANCE
93%
89%
FOR ENTERPRISES WITH 6-19
EMPLOYEES WHO REQUESTED
DEBT FINANCE COULD ACCESS
ON ACCEPTABLE TERMS
(CHART 20)
90%
WHO REQUESTED EQUITY
FINANCE COULD ACCESS ON
ACCEPTABLE TERMS
(CHART 21)
2014
92%
89%
Number of employees
20-49
Data source: Statistics New Zealand Business Operations Survey, 2014
Chart 21: Percentage of Firms Accessing Equity Financing on Acceptable Terms
87%
83%
DEBT FINANCE IS SOUGHT
BY MORE BUSINESSES THAN
EQUITY FINANCE
2012
2013
86%
6-19
79%
95%
2012
2013
2014
79%
78%
76%
6-19
85%
Number of employees
Data source: Statistics New Zealand Business Operations Survey, 2014
20-49
◊ CONDITIONS
◊
This work is based on/includes Statistics New Zealand’s data which
are licensed by Statistics New Zealand for re-use under the Creative
Commons Attribution-Noncommercial 3.0 New Zealand license.
Please refer to the following data quality statements outlining the
coverage and limitations of each data source:
›› Enterprise: is an institutional unit and generally corresponds to legal
entities operating in New Zealand. It can be a company, partnership,
trust, estate, incorporated society, producer board, local or central
government organisation, voluntary organisation, or self-employed
individual.
›› The Annual Enterprise Survey provides annual information on
financial performance and financial position for industry and sector
groups operating within New Zealand. The target population of the
survey are economically significant enterprises operating in New
Zealand, whose main activity is not superannuation funds, residential
property operation, foreign government representation, religious
services, or private households employing staff and undifferentiated
goods-and service-producing activities of households for own
use. http://www.stats.govt.nz/browse_for_stats/businesses/
business_finance/annual-enterprise-survey-info-releases.aspx
›› Business Demography statistics provide an annual snapshot (as
at February) of the structure and characteristics of New Zealand
businesses. The series covers all economically significant enterprises
engaged in the production of goods and services in New Zealand.
http://www.stats.govt.nz/browse_for_stats/businesses/
business_characteristics/nz-business-demography-statisticsinfo-releases.aspx
›› The Business Operations Survey is an annual modular survey
providing statistics on business practices and behaviours that
may have some impact on New Zealand business performance.
The target population for the survey are economically significant
enterprises with six or more employees operating for one year or
more. http://www.stats.govt.nz/browse_for_stats/businesses/
business_growth_and_innovation/business-operations-surveyinfo-releases.aspx
›› Linked Employer-Employee Data provides a quarterly insight into
the operation of New Zealand's labour market. The data covers all
individuals who receive income from which tax is deducted at source:
http://www.stats.govt.nz/browse_for_stats/income-and-work/
employment_and_unemployment/linked-employer-employeedata-info-releases.aspx
›› The National Accounts (Industry Benchmarks) provide
comprehensive industry data on production, investment, and
capital stock. This data was analysed in a supply-use balancing
framework to reconcile the production, expenditure, and income
measures of gross domestic product (GDP). It focuses on industry
data and the benchmarks for the level of economic activity, which
update and maintain the quality of quarterly GDP statistics. http://
www.stats.govt.nz/browse_for_stats/economic_indicators/
NationalAccounts.aspx
›› The Quarterly Employment Survey measures the number of jobs
(technically referred to as filled jobs), earnings, and paid hours for a
sample of economically significant businesses. http://www.stats.
govt.nz/browse_for_stats/income-and-work/employment_and_
unemployment/labour-market-statistics-information-releases.
aspx
DEFINITIONS
›› Enterprise birth: a new enterprise starting operation, with the
restriction that no other national businesses are involved. These
do not include entries into the population due to reactivations,
mergers, break-ups, split-offs, or other restructuring of a group of
businesses linked by ownership or control. It also excludes entries
into a population resulting from changes to characteristics of existing
businesses.
›› Enterprise death: an enterprise ceasing operation, with the
restriction that no other domestic businesses are involved in
the event. This does not include exits from the population due
to temporary inactivity, mergers, takeovers, break-ups, or other
restructuring of a group of businesses linked by ownership or control.
It also excludes exits from a population resulting from changes to
characteristics of businesses which remain active.
›› Enterprise group: a set of enterprise units linked by common
ownership. Statistics New Zealand only records links of over 50%
shareholding between enterprises. Enterprise groups include
all resident groups, foreign controlled enterprise groups and
domestically controlled enterprise groups.
For more information on the definitions of Business Demography
sourced data see:
›› http://www.stats.govt.nz/browse_for_stats/businesses/
business_characteristics/BusinessDemographyStatistics_
HOTPFeb14/Definitions.aspx
›› Jobs created: The net number of jobs created by a business, since
the previous reference date.
›› Full-time jobs: jobs where the employee works for 30 hours or
more per week.
›› Part-time jobs: jobs where the employee works for less than
30 hours per week.
›› RME (Rolling Mean Employment) is a 12-month moving average of
the monthly employee count for an enterprise.