More than 40,000 businesses were started up in New Zealand between April and December last year – and many of them are in sore need of tools to help them grow in a Covid-19-altered business environment.
That's the view of David Bell, Director of Business Growth at Xero NZ, who points out that the Companies Register data on start-ups shows how New Zealand's business environment is growing and changing shape because of the pandemic.
"Those 40,000 start-ups are a lot more than would normally be seen," he says. "People have come home from offshore – experienced, talented people; we are not just talking about young people coming home from OE and trying to find jobs.
"We are seeing an influx of entrepreneurial people who realise that this is an opportune time to start a business because the old rules don't apply; what used to be true is no longer true – and there are real opportunities for people and businesses who embrace technology and fold it into their operations."
It's not just start-ups, he says. There are many existing small and medium businesses who successfully rode the wave created by Covid-19.
One example is a butcher in the provinces who, like many businesses during the first wave of lockdowns, faced disaster. But he had customer telephone numbers on file so was able to text everyone that the business was able to deliver securely – and orders came flooding in.
That simple tactic morphed into a wider strategy. The butcher turned to technology and, armed with real-time tools to help him make the most of his new online business, he maintained and grew his service – all the time building loyalty with a growing customer base.
By Christmas, says Bell, the butcher had a graphic illustration of how his business had grown when orders for hams became a tsunami. The butcher sold somewhere between 300-500 per cent more hams than the previous year, a clear signal of a business that had profited from having the right data in the right place at the right time – and had built on that.
Bell says start-ups and pivoting existing businesses can benefit hugely from Xero products like their Starter Plan, revitalised to help support small and medium businesses after the main effects of Covid-19.
"We have research showing that 75 per cent of small businesses say they make better decisions when they have access to real-time information," he says. "The Xero Starter Plan gives sole traders, freelancers, and microbusinesses a low-cost snapshot of all their financials in one single, up-to-date source of truth.
The refreshed plan enables businesses to stay strong by providing deeper cash flow insights and creating seamless experiences to help them get paid faster: "Businesses starting off now need to be set up for a digital environment right from the start by lowering the barriers of entry. Our Small Business Insights have proven that as a result of Covid-19, being paid on time and controlling cash flow has become more important than ever.
"Sole trader accounting software isn't just a key part of your business. Think of it as a way to fine-tune the way you work. It can help you become more efficient – and pretty soon you'll wonder how you managed without it, just like the butcher I mentioned."
Many of the 40,000 new businesses created in that 9-month period last year would need that help and would need the tools to grow, he says: "I am not just saying this because I work for Xero but, overall, I think Xero has had a definitive impact on New Zealand in much the same way as Nokia did in Scandinavia.
"It's a home-grown company with a huge ecosystem, with access to more than 800 apps, to help streamline businesses. We combine that awareness of technology products with the natural Kiwi ability to embrace entrepreneurship and innovation – and that's why so many companies have taken advantage and why we have such a high adoption rate of accounting software, higher by far than in the US."
History has shown there is often a business resurgence following economic downturns, says Bell, with some of the most challenging economic periods sparking feats of creativity and ingenuity. Disney, Airbnb, Uber, Canva, Slack and General Motors are all examples of companies that began life during a recession.
"So Xero's Starter Plan aims to help ambitious new businesses take their first steps during the pandemic and support the green shoots of growth."
The Xero Starter Plan includes:
●The ability to send up to 20 invoices
●Enter and track up to five bills
●Reconciliation of bank transactions
●Capturing bills and receipts with Hubdoc
●Added facility for payroll and accounting in one; plus the ability to track project profits.
"We are seeing more and more that those companies who are looking forward – and projecting data – instead of looking back are the ones doing best," says Bell. "I'd strongly recommend business owners to become 'curious' people – asking questions and inquiring into matters of technology beyond their comfort zone as the outcome can be enormous."
For more information on Xero Starter - go to www.xero.com/nz/pricing-plans/starter/