Newcomer offers big savings to small firms

By ELLEN READ

Savings of up to 40 per cent are for small business operators are promised by a company launched by a group of former Shell International executives.

The four left the business services group of the oil company this year to start up The Hub and plan to make a public share offer involving the company this month.

Based in Wellington, The Hub has agreed long-term contracts with major suppliers to offer cheaper services to small businesses.

Through these contracts and the use of bulk purchasing power, The Hub's promoters claim they will be able to offer cheaper deals for information technology, petrol, power, telecommunications, stationery and travel.

They say the firm will be able to deliver such services at prices 20 per cent cheaper than those small businesses are normally charged.

Users of the service get just one monthly invoice.

They will also have toll-free phone and internet access to that allows them to compare prices and track their spending.

"The small-business sector is increasingly important in New Zealand and has been poorly serviced by the big suppliers of electricity, telephone services and fuel, in particular," said the company's managing director Ken Mackley.

He said the firm would add more services as it grew and that over the next two years it planned to expand into Australia.

Its target over the next couple of years was to obtain 6000 small-business customers.

He said the company's current customers ranged from dry cleaners to glaziers and security companies.

The Hub was seeking customers nationally and it had already secured its first customer in Auckland.

As part of a pilot programme involving 20 customers, the company's sponsors looked at the needs of small businesses.

They found about 90 per cent of businesses in New Zealand were of small to medium size and that their average annual spending was $235,000.

The company's founders say that the company will make its public share offering this month.

They offer will consist of two million shares at a price of $1 each.

They say a prospectus and investment statement will be available shortly and they expect that the offer will remain open until mid-December.

Mr Mackley said the company would be an unlisted public company.

"We have no plans to list at this stage but we're not ruling it out for the future."