KEY POINTS:
Most owners of private businesses in this country are aiming for modest organic growth, but most are wary of initiatives that could lead to accelerated growth, a new survey shows.
The ANZ bank said its Privately-Owned Business Barometer 2008, published today, found 89 per cent of business owners
in the survey were confident about their own three-year prospects.
They were focused on achieving modest organic growth in the short and medium term, ANZ said.
The survey found 78 per cent comfortable with debt and risk, with half having a strong risk appetite. But only 34 per cent said they would consider accelerated growth by acquisition, international expansion or joint ventures.
ANZ Institutional Corporate & Commercial managing director Nigel Williams said the environment now was clearly difficult and challenging, but there was no better time to make big gains than when competitors were equally challenged.
"The challenge for the sector is to look beyond organic growth and seize the prospects that exist in the current environment," Mr Williams said.
"In particular, we're seeing an increasing number of consolidation opportunities across a range of industries, with the decision by some owners to exit presenting acquisition opportunities for those looking to grow faster."
Booming economies along with completed and prospective free trade agreements in Asia also provided a once in a generation opportunity for businesses to expand into new markets.
ANZ urged business owners to take a long term view of the opportunities for themselves and their business, he said.
The sector was "incredibly important and the "real engine room" of the New Zealand economy.
As the barometer findings showed, business owners were aware of issues such as growth, risk management and wealth maximisation, but ANZ was concerned by the lack of progress in grappling with the task.
"Our real fear is that by not making plans business owners will limit the opportunities for themselves, their families and their businesses - and thus the wider New Zealand economy," Mr Williams said.
There was an apparent reluctance to use external expertise to shape plans for growth or change.
But the use of advisers could reduce risk and add value. For example, a business expanding into an overseas market could have an independent director with knowledge of that market.
The barometer is based on a survey targeting owners of just under 1500 privately-owned businesses with annual total revenue from $5 million to $150 million.
It was carried out by Colmar Brunton on behalf of ANZ, and had a response rate of 21 per cent, or a total of 306 responses.
Among other findings of the survey was that owners wanted to release time and capital from their businesses, with 45 per cent of owners aspiring to retirement in the next five years.
Nearly two-thirds of respondents saw succession as in issue, up from 48 per cent last year, but only 17 per cent had taken steps to address it.
Demand for alternatives to outright exit were growing, but many owners were yet to start planning for that outcome, or identifying a successor.
Mr Williams said s uccession could involve bringing in a new owner, with new growth aspirations, to work alongside the existing owner.
The survey demonstrated that New Zealand's privately owned businesses were predominantly well established with 85 per cent of those surveyed having been in existence for more than 10 years, and 31 per cent for more than 30 years.
More than half had an annual turnover between $11m and $40m, and three-quarters employed more than 20 full time staff.
- NZPA