In My Opinion

Dita De Boni is a Herald business columnist

Dita De Boni: Small firms just need a little love

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Maybe a helping hand would have stopped my local restaurant from going up in smoke

For three years running, more New Zealand businesses have closed their doors than have opened them. Illustration / Anna Crichton
For three years running, more New Zealand businesses have closed their doors than have opened them. Illustration / Anna Crichton

Some time in the past few weeks, a restaurant just down the road from my house served its final meal.

I assume the grated, locked doors and empty wine shelves mean this business has simply ceased to be economically viable. Of course the owners could have met with tragedy, or won Big Wednesday, but of the likely explanations, closure - even foreclosure - seems the front-runner.

For three years running, more New Zealand businesses have closed their doors than have opened them. It's a dispiriting statistic that hits small and medium enterprises (SMEs) disproportionately hard, even while that sector churns out a third of the country's GDP and creates half of its jobs.

And that headline statistic doesn't factor in the personal toll of a failed business - a huge blow to the self-esteem as well as the back pocket.

In the beginning, my neighbourhood business was fuelled by the happy dream of creating a local diner that could cater to brunch-seekers, young families and romantic couples alike.

Slowly, hours were cut back, menus contracted and a feeling of resignation set in. The pleasant service never wavered but the toll of opening night after night to empty tables was obvious. And finally, the neighbourhood found it impossible to rally behind a business whose days were clearly numbered.

And for all that the restaurant itself may be at fault - perhaps it chose the wrong sort of food or decor, or occupying the place of a previously failed business doomed it to repeat history - one cannot escape the feeling that in some ways, officialdom too had let it down.

For one thing, works consumed the road right outside the business for months after it first opened, ensuring no one could park outside or even get to its front door at times. Road workers made their unwelcome return month after month - churning up the same patch of road multiple times, and foot traffic petered out.

I gathered that compliance and red-tape issues created the usual headaches, while marketing and advertising efforts failed to hit the mark.

Some may say the resources for SMEs are there; all they have to do is find them - but have SMEs got the time? Is there a way in which the council can more effectively reach out to the businesses that make up micro-economies and ensure that fewer end up in the clag?

Having listened to the potential Labour Party leaders over the past week, it seems obvious that the country's 469,000 small business owners' interests barely rate a mention; instead, pinging the wealthy for more tax, party factions, and dissecting the body language of each leader and his significant other is of far more import.

The media aren't asking how small business might be better served, and the pollies aren't specifying anything either, beyond the usual "cutting red tape/reducing compliance costs" trope.

Meanwhile in Australia, Kevin Rudd is promising to collect GST from small and medium enterprises just once a year rather than four times, while Tony Abbott will take the job of paying superannuation off small firms and hand it to the Australian Taxation Office.

Small change, of course, but still a masterclass in throwing this often forgotten, but hugely significant, sector the merest sniff of a bone.

- NZ Herald

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