Fighting the 'bach or BMW' mentality

Lianne Dalziel

Ambitions to own a BMW or a bach often inspire Kiwi business-owners more than the desire to be market leaders, says the Ministry of Economic Development.

In its briefing to the incoming Minister for Small Business, Lianne Dalziel, the ministry also highlighted five other reasons small businesses, generally, do not reach full potential.

They are: a lack of investment in research and development; a preference to "go it alone" rather than form strong networks with other firms; claims they cannot access the finance they need to grow sustainably; management and business capabilities that do not match international best practice; and because they are disproportionately affected by Government regulation.

"At the heart of these challenges is the lack of scale of small and medium-sized enterprises as organisations. Therefore, Government interventions aim to assist SMEs to overcome those barriers of size."

The ministry defines SMEs as businesses employing fewer than 20 people.

They comprise 96.3 per cent of firms, employ 29 per cent of all employees, and account for 37.3 per cent of total output.

The Government's vision was for local SMEs to be "innovative, well-managed and world-class". To work towards that over the next three to five years the ministry wanted to:

* Encourage a "think small first" programme to give Government officials a framework to include an SME perspective in policy development.

* Enhance two-way communication between SMEs and the Government.

* Make transactions between SMEs and Government agencies easier.

* Raise awareness of the positive contribution of SMEs to New Zealand.

* Encourage young people to consider business ownership.

The briefing said replacing or reappointing members of the Small Business Advisory Group was due to start shortly. The group of private-sector business people was formed to give business-sector views on the development of policy related to SMEs.