Nuts and bolts man who has a mountain to climb

By Selwyn Parker

Trevor Porter spent years as a bit player in the big business of Formula One racing when he worked as a mechanic with the Tyrell team. Now he is back in his native New Zealand, building up his own business. Will he make it?

Porter, 37, is still into racing cars, which he helps maintain for petrolhead clients from his factory in a barn-like building on a property at Horsham Downs, just north of Hamilton. But car-racing is a small industry in New Zealand and Porter has diversified into the construction of high-quality, hand-made mountain bikes under the Keewee brand name.

According to industry sources, Keewee bikes are light but robust, on the edge of technology, and quick. A cyclist on a Keewee bike has just won the national downhill championships. Although Keewee bikes are expensive, at $3000 for a frame and up to $10,000 for a high-spec, ready-to-ride machine, Porter sells all he can make through specialist cycle shops. Next, he is aiming for the Australian market.

Porter is likeable, steady, and knows where he wants to go. But whether he gets there will depend on the quality of the advice he receives along the way. Like thousands of small businesspeople throughout New Zealand, he is a proud tradesman with industry-specific skills.

But he can't be expected to know everything he needs to know. Exporting into Australia, for example, introduces a whole new set of problems.

As a recent article in the Chartered Accountants Journal observed about the risks to small and medium-sized businesses: "Often there is an underlying lack of managerial skills, competencies and acumen to run the business as a commercial enterprise.


The article, by Bev Edlin and Keith Murray, added: "For such businesses to improve their chances of survival, they must view their evolution and growth as encompassing a continuous series of strategic decisions.

It is not an exaggeration to say that the issue here is the growing prosperity of New Zealand, given the massive contribution that small and medium-sized businesses make to it.

So to where do businesses like Trevor Porter's turn if they want to make the right decisions? A lot of them rely on their accountants and bankers, especially in the fraught early couple of years of their existence. But, as the study shows, novice businesspeople receive mainly tax and other compliance-type advice from accountants, which doesn't go nearly far enough.

As the study acknowledges: "Accountants must be able to guide smaller business clients in maximising returns from their business rather than simply recording what has been done in annual accounts when they are completing tax returns.

But if chartered accountants should be maximising their clients' returns, why do only 35 out of the 800 chartered accountants in Auckland belong to the institute's business development group?

As for bankers, they will tell you they are just too busy worrying about the security of their clients' commercial loans to be in a position to provide strategic support.

Yet small business needs all the good advice it can get. Although there is mounting evidence that the failure rate of small businesses is much lower than the one in five that is usually quoted, there is no dispute that it is an at-risk category of commerce.

So who steps into this gaping informational breach? Although businesspeople sometimes hire consultants for specific advice, far too few of them routinely seek the sort of advice they need in business planning and strategy, marketing, sales and advertising, systems, operations and technology, insurance and risk analysis, investment, employment, to name a few. Instead they turn to wives and husbands, friends, fellow Lions club members, among many others.

Result? They end up with what the study's authors call "a cocktail of varying opinions and experiences.

The Independent Business Foundation is trying to do something about this. It is an Auckland-based lobby group which thinks accountants and bankers should be doing a much better job for small business.

The Independent Business Foundation, whose members come from the manufacturing, transport, marketing, financial and accountancy sectors, has an eight-point plan which can be summarised as an invitation to the accountancy and banking industry to oil the hub.

Summarised, the plan aims to put the ambulance at the top of the cliff. It recommends that bankers and accountants work together as soon as trouble looms with a client, for example by hiring local consultants, by requiring clients to write business plans and even to refuse finance if they don't.

The foundation also suggests that accountants stage seminars with outside experts on how to run a profitable business. They should also learn more about their clients' companies, for example by spending a few days a year in their factories or premises.