Big bugbears seen for small businesses

Whangarei small businessman Philip Higham has some advice to people considering setting up their own business: Think again.

His words come as Finance Minister Michael Cullen prepares to announce the Government's Budget for 2005.

Mr Higham has recently taken over the Zeo's Fast Fit Food cafe in Whangarei.

In Northland the economy is booming, with business confidence high and unemployment at a 20-year-low.

It is seemingly an ideal time for small businesses to flourish, but Mr Higham said the cost of complying with Government requirements was excessive and the biggest bugbear for small business owners.

"This is a very small business, employing only three staff, but there is a heck of a lot of paperwork involved. There's PAYE tax, GST, ACC levies, Employment Relations Act requirements and a range of other government requirements that are enormous for a business this size," he said.

"It's also quite technical and for somebody without any experience of dealing with that sort of stuff, it can be hard as they require a level of knowledge most don't have."

Mr Higham, who is also an architect, said he bought into Zeo's because he wanted to find out what it would be like running a small business.

But he readily acknowledges that if he was considering it now, he probably would not get into it, mainly because of the compliance work required that took up several hours every week.

"I'm of the view that you are in business in spite of the Government, not because of the Government," Mr Higham said.

"As a small business owner you spend a lot of time recovering debts for the Government -- things like PAYE, student loans, court fines, child support. We are glorified debt collectors for the Government, but receive no help in collecting it."

His advice for anybody looking at setting up a small business is to proceed with caution: "Think very carefully about it and don't go into it lightly. There are a lot more (compliance) things to do than you may realise beforehand," he said.

"We have to be a business owner, accountant, tax expert, employment relations expert. We have to be everything and it's a lot of hard work."

Northland Chamber of Commerce Chief Executive Jude Thompson said there were four main areas she would like the Budget to address, including: provision of advice, mentoring and practical tools for businesses, access to finance and business support, enhancing the environment for small business and improvements in the regulatory environment.

"We want to see targeted initiatives to promote business growth and a commitment by the Government to achieving the 4 per cent growth we all know we need," Ms Thompson said.

- nzpa