Why people start business ventures

Garreth Collard says a change of lifestyle was the main reason he decided to focus fully on his accountancy firm. Photo / Janna Dixon

Turning abilities into money or wanting a better lifestyle among the main reasons

Turning skills into a money-making opportunity by doing what they were good at is the primary reason cited by Kiwis for starting business ventures in a survey recently carried out by the NZ Herald in partnership with ASB.

Grabbing previously untapped opportunities, being able to work from home and contributing to NZ Inc were among other reasons for going into business.

The survey garnered more than 450 respondents from New Zealand companies of a range of sizes and from diverse sectors. Respondents were asked a range of questions around the issues that were critical to their operations, their measures of success, why they got started in business and their exit strategies.

Some 35.8 per cent of respondents, over the six-week period of the survey, cited that 'turning my skills or interests into an opportunity' was their primary reason for starting their own business.

A further 19.3 per cent said lifestyle change was their primary motivator, followed by 'creating an income stream to last through to retirement' (15 per cent) and spotting a previously untapped opportunity (8.3 per cent).

A further 7 per cent said they wanted to help others, while 5.5 per cent said they started their business to make a difference in society.

The remaining 9 per cent cited a broad range of other factors, ranging from being made redundant to creating an opportunity that worked around having children.

Garreth Collard, founder of Auckland-based company EpsomTax.com, says lifestyle change was the main reason he took the plunge to focus fully on his accountancy firm, which specialises in the residential property sector.

After spending a year in Central America, Collard started the business in late 2008 but was content to let it simmer slowly on the side while he worked as a contractor in IT management.

"But the more time went by, the more I realised I was putting my energies into someone else's business," Collard says. "I wanted to have more time to spend with my wife and for myself, so it was for lifestyle reasons that around 2011 I said, 'Okay, I'm going to work for myself'."

But while a better lifestyle might be the dream, is it the reality for a business owner?

In Collard's case, the answer is yes - and no. When a close family member became seriously ill last year, Collard says owning his own business gave him the flexibility to spend time caring for his loved one.

However, Collard says business at EpsomTax.com is booming, with the firm doubling in size for the past three years. He now has four accountants and an office administrator working in the firm but, even so, this year he's still been spending double the amount of time in the firm than planned.

"For me, I soon realised I needed to have a so-called exit strategy, ideally I'd like to get to the point where all I'm doing in the business is having cups of coffee with our clients."

A better lifestyle is an impetus for his approach but Collard says it's also about being a careful and successful manager of his business.

Extricating himself largely from the operational side of the business means it's protected should something happen to him. It also means the business is inherently more valuable.

As a result, he's instituted and documented more systems in the business - storing them in the cloud for safekeeping. He's also been in discussions with another accountant in the hope they'll join the firm next year to take over the bulk of his current day-to-day responsibilities.

"They say successful managers should be able to manage themselves out of a job, so that's the strategy I want to apply to what I'm doing," Collard says.

"It's about being prudent in my approach and if I'm encouraging my clients to do that, I have to do it myself."

ASB Ambition
Part four of a Business Ambition series in partnership with ASB, based on a survey conducted over the past six weeks and giving insights into the ambitions, concerns, wants and needs of NZ businesses.