Tenby Powell: Big guns rallying for small firms

Craig Foss, National MP for Tukituki, pictured at the Opera Kitchen in Hastings. Photo / Paul Taylor, Hawke's Bay Today

Opinion

In late December, I was asked to meet two of our political big guns - one was Craig Foss, Small Business Minister (to whom I ultimately report as convenor of the Government-appointed Small Business Development Group), the other was Jacinda Ardern, Labour spokesperson for small business.

Both are newly appointed and both wanted to talk about the impact of small business on New Zealand.

Specifically, how National and Labour can better engage with small business owners. They were asking me this in my capacity as founder of the New Zealand SME Business Network, a non-partisan group which now has more than 7600 members on the social media site, LinkedIn.

As I left Jacinda Ardern's Ponsonby office I was left with a clear impression that Labour has our SME (Small Medium Enterprise) ecosystem firmly in its sights.

They have woken up to the fact - and not before time - that our small business ecosystem can create significant value for New Zealand.

During our meeting, I suggested to Ardern, as I had to Foss, that the strategic value creation is more than just economic, it's socio-economic. Note how the term "socio" (of society) is linked to the word "economic".

Given that 97 per cent of New Zealand businesses are SMEs - accounting for 38.6 per cent of our total economic output (on a value-added basis) and employing 31 per cent of the NZ workforce - it would be errant to underestimate the positive societal impact of this diverse sector.

National understands this and has initiated the Better Public Service Results Programme, designed to reduce the cost of dealing with Government by 25 per cent by 2017. This, together with the New Zealand Business Number, a unique single number that will enable some 550,000 businesses to provide their information only once to all government departments by 2016, is a move in the right direction.

The group most affected by these initiatives is SME owners.

Similarly, new Labour leader Andrew Little is focused on start-ups and SME growth with its positive impact on employment. Ardern supported this saying, "Labour will focus on SMEs as they are a key driver of economic growth and therefore jobs."

During our meeting, I reminded her that we have known for some time that New Zealand enterprises with fewer than 50 staff are creating nearly half of all new jobs and are increasingly becoming engaged in innovation and exporting activities.

This is where the real socio-economic action is at for New Zealand. And it needs a big vision to capture the opportunity.

So I shared one with her. After all, entrepreneurs tend to see opportunities where others see problems, so why not.

Only a month prior I shared this same vision with Foss. A vision for the New Zealand SME ecosystem of 2022.

The vision is to lift the current GDP contribution by SMEs from 28 to 35 per cent. It equates to about $15 billion. It's a socio-economic vision, linking the economics of GDP growth, through business growth, with an inherent positive impact on society.

This is about much more than just employment in isolation.

They both smiled - as if to say, "Don't give up your day job", and graciously asked "How?"

The "how" is not dissimilar to what the Malaysians did. They created a Government Ministry. While I'm not suggesting that - yet - with $15 billion at stake, I am suggesting we need to step up our SME resourcing to make a positive impact.

For example, there is no shortage of equity and growth capital in New Zealand. What is lacking is the education to manage it effectively. Practical business education.

The Icehouse, Auckland-based International Centre for Entrepreneurship, which operates nationally, offers the acclaimed Owner Managers Programme (OMP) to small business owners. It's not cheap but it works. It works to educate owners on how to grow their businesses and, for those who aspire to it, how to create a Business of International Quality (BIQ). This BIQ measure will become increasingly important for New Zealand SMEs.

New Zealand operates on an international stage and as SME owners we forget that at times. Even our domestic businesses, seeking to employ international talent or develop new innovations, are part of a global market in 2015.

These are exciting times for small business owners in New Zealand. The big guns, it seems, are about to engage.

As SME owners, we now need to assist them to fire effectively.

Tenby Powell is founder of the New Zealand SME Business Network.