A small but powerful group of New Zealand's businesses the 6.6 per cent who belong to the Mid-Market sector of companies with turnovers between $2- and $50 million is taking credit for a large share of the country's recent economic growth. It's no one-off achievement either: Mid-Market businesses don't see their winning streak ending anytime soon.
Armed with the nous to transform innovation into financial success, a lack of internal bureaucracy to hamper them and an increased ability to raise finance for new ventures, Mid-Market firms are chomping at the bit as the economy trends upwards.
Results from the GE Capital New Zealand Mid-Market Report 2014 show that the Mid-Market sector, which generated $143 billion in sales in 2012, is leading the way, particularly in the wholesaling, retailing, manufacturing and professional, scientific and technical services industries.
With a wider economic reach than just its own activities, the Mid-Market sector contributed a total of $66.2 billion to the NZ economy in GDP during 2012.
The 33,800 companies are also responsible for creating one third of the country's employment opportunities.
Mid-Market companies in New Zealand have displayed a continued ability to punch above their weight in an economy which devotes the lion's share of attention to small business battlers and the larger players, said Angela Hunter, managing director of GE Capital.
New Zealand Mid-Market businesses, such as specialist Auckland food retailer Farro Fresh and Christchurch-based fresh pet food exporter K9 Natural Foods, are upbeat about their growth prospects for the future.
They have strong self-belief: We tick a lot of boxes. We are a healthy industry emerging from NZ's core strength. With us you are looking at a high end value-add brand, said K9 Natural Foods CEO, Calvin Smith.
Added Hunter, Senior leaders of Mid-Market businesses are not just out to excel at what they do, they express a desire to set the standard for their industries through new ideas and innovative thinking.
Everything we do seems to be copied by our competitors. It is essential that we are one step ahead and market innovators rather than followers, said Janene Draper, co-founder of Farro Fresh with her husband James.
Fast-growing businesses in the Mid-Market share similar attitudes about what needs to be done to maintain growth. They stress the importance of working on customer retention or increasing sales with existing customers as well as increasing efficiency and productivity. They intend to be working harder on staff engagement and retention and put a strong emphasis on market share growth, building awareness and presence.
The challenges for Mid-Market players, meanwhile, are low-cost competitors. The report also points out the majority of companies in this sector are not currently exporting and should be more pro-active at looking at this as a way to grow. The ability to effectively manage cash-flows and costs, and increase productivity, is seen as critical to the sector's continued growth.
The Mid-Market recognises the importance of productivity and it is actively working to lift productivity figures in individual sectors, regions and the NZ economy, said the report.
For more insights into New Zealand businesses in the Mid-Market and the issues they face, download the GE Capital New Zealand Mid-Market Report 2014 here.