Christopher Adams

The Business Herald’s markets and banking reporter.

Firms' struggles hit families

Business owners are coming under pressure at home to cut costs in a bid to keep their firms afloat. Photo / Getty Images
Business owners are coming under pressure at home to cut costs in a bid to keep their firms afloat. Photo / Getty Images

Most owners of small companies rate family relationships as more important than business success but almost three-quarters of them are having to sacrifice time with loved ones in order to ensure their firms survive, a survey says.

The MYOB Business Monitor, a regular survey of 1000 New Zealand small to medium enterprises, also found 48 per cent of owners were cutting household expenses to keep their companies up-and-running, while 58 per cent said they had to cut back on family holidays and another 38 per cent said they often missed out on important family occasions.

"Small business owners are some of the biggest drivers of the New Zealand economy, but I don't think there is a widespread understanding of the sort of sacrifices they are making," said Julian Smith, general manager of accounting software provider MYOB.

"The research shows that small business owners are routinely having to give up time with their family if they want to stay in business."

The survey found 64 per cent of respondents said they were very proud when their children succeeded, while 53 per cent said they were very proud of getting married or settling down with a partner.

Conversely, just 36 per cent said they were very proud of building their business to the point where it provided a comfortable living and only 30 per cent said they were very proud of their firm's first monthly or annual profit.

"So while small business owners are telling us that time with their family matters most to them, they are being forced to give up that time to make sure their business survives," Smith said.

Meanwhile, another survey by Grant Thornton has found the overall profits of more than 5000 of the accountancy firm's New Zealand small-to-medium sized business clients plunged almost 28 per cent last year, while revenue rose 6.7 per cent.

Grant Thornton partner Paul Kane said the rising cost of sales, which increased 12 per cent in 2011, was the major cause of the profit decline.

"Businesses are struggling and are attempting to generate sales through price reduction which is having a detrimental effect on the profit margin," Kane said.

The Grant Thornton study showed profit levels in the retail trade sector dropped 76.1 per cent last year, while revenue and cost of sales increased 8.3 per cent and 11.8 per cent.

CRUEL CUTS

* Survey of small to medium-sized enterprises.
* 48 per cent of owners cutting household expenses to keep firms running.
* 58 per cent had to cut back on family holidays.
* 38 per cent often miss out on important family occasions.

- NZ Herald

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