Micros' key is to trust partners

Tiny businesses with five or fewer staff can succeed internationally in niche markets but need more customised support from the Government, says Massey University researcher Paul Pickering.

Tiny businesses - often called micros - make up about 90 per cent of all New Zealand businesses.

Pickering is confident they can succeed overseas if they pick the right business partners and trust them.

A study he has done, for his PhD, is one of only a few into what makes micro enterprises successful in international markets, even though they provide 11 per cent of jobs and 20 per cent of GDP.

Pickering said small businesses ranged from manufacturing and information technology to retail and consulting services.

His research involved case studies of seven enterprises specialising in new voice-recognition technology, high-tech interactive visual production, remote mobile data communications, tropical pharmaceuticals, organic condiments, weather-resistant baby-shades and traditional toys.

All seven had successfully taken their products into international markets within 12-18 months of start-up and Pickering said the common element was trust.

"It's essential for micros to trust those they have chosen to deal with, which may include manufacturers, distributors, customers or others significant in the value chain."

This trust must often be proffered after only a short time for the companies to get to know each other, contrary to accepted "best practice".

Pickering noted that fledgling businesses often feared the exploitation of their ideas or innovations and then expended too much of their limited resources on monitoring and controlling their value chain.

- NZPA