By ELLEN READ
It is a myth that four out of five businesses fail within a couple of years of starting, says the National Bank of New Zealand.
A new quarterly publication released this morning, the NBNZ Small Business Monitor, shows that more than half the micro-businesses (one to five employees) started
in 1995 were still in operation two years later and at least one in three of these firms were still operating after five years.
Small to medium firms (those with six to 50 employees) have even better survival rates and large firms are likely to last longer still, partly because they have more resources to withstand market fluctuations and partly because they are often part of much larger organisations, the National Bank says.
While small firms do fail, over the past five years more have been created than have gone under.
Excluding the agricultural sector, at the start of last year there were more than 250,000 enterprises in New Zealand.
Micro-businesses accounted for 86 per cent of enterprises, the bank says.
Small to medium-sized businesses make up 99 per cent of all business.
Nearly a third of small businesses are involved in property and business services. Real estate agents, advertising agents, lawyers and accountants are common occupations in this sector.
There are also many small businesses in construction, retail, manufacturing and wholesaling.
The bank says these sectors were among the best performers last year and are very optimistic about the year ahead.
The size of business has little influence on average time spent at work, perhaps with the exception of micro-firms, where employees work about an hour less per week than workers in bigger businesses.
The 40-hour week still dominates the work culture of all businesses.
In contrast, the size of firms has a major impact on the average wage rate.
Employees in large firms earn about 30 per cent more, on average, than those in micro-firms.
Average pay varies from about $12 an hour in the hospitality and food sectors to nearly $24 for some Government administration and defence employees.
