Small businesses in New Zealand are performing better than popularly believed — bank exec.

A leading bank expert says it's time to focus on the "good and the great" in the small business world.

Shelley Ruha, Chief Customer Off icer, BNZ Partners, says the survival and success rate of New Zealand small businesses is far higher than the figures indicate and New Zealanders are obsessed with the idea of small business failures.

She thinks the commonly held belief that most small businesses (SMEs) fail in their first two years is questionable: "True failure is very low among new businesses," she says. "The level of bad debt among business clients has never been lower than it is now and I think the issue is SMEs are not failing, but failing to fly to their full potential."

She says Reserve Bank data shows the percentage of non-performing loans (bad debts) has fallen to about 0.5 per cent of all business loans, well under the figure of 1.2 per cent in 2012.


"There are a lot of reasons why businesses stop trading and too often it's attributed to business failure," she says. "But insolvency numbers (where a company is unable to raise enough cash to keep going) is a much better indicator."

She says Statistics New Zealand figures show that in 2017 just 117 out of 67, 113 new business start-ups were declared insolvent, down from 208 out of 49,368 in 2010.

Ruha believes much of the focus on business failures has arisen because
people are challenged by the future and are unsettled by increasing technological disruption to the extent they have "become a bit obsessed with this word 'failure'."

While the World Bank has rated New Zealand as the easiest place to set up in a business with more than 10,000 SMEs launching in each of the last four years — all SMEs contribute $65b to the country's GDP every year — Ruha says many enterprises considered SMEs are in fact sole traders or contractors who work from an off ice at home.

She says Statistics New Zealand figures show that of the estimated 515,000 companies in New Zealand, 495,000 or 97 per cent are classified as SMEs. Of these 363,000 employ either no staff or less than five people.

Shelley Ruha. Picture / Supplied
Shelley Ruha. Picture / Supplied

Ruha says because the BNZ works closely with thousands of SMEs it understands the challenges they face and is able to provide support and mentoring to help them grow.

"One of the very real challenges is that the owners of these companies are also the chief financial off icer, the head of HR, they run sales — in other words, they do everything.

"This means they get easily locked into a treadmill which prevents them from spending quality time in business planning; they are in the business but not working on the business."


Ruha's comments come as BNZ wraps up a 20-week Supersize SME campaign in which it has worked with three businesses — ilabb, Orbica and Flexo — to help them grow through a business mentoring programme.

She says it has had a significant impact on the three companies: "To hear them talk about what it has done for them made it one of the best days I have spent in banking."

Ruha says this is the reason BNZ spends quality time with high potential companies like the three in the Supersize SME campaign — to help identify what is getting in the way of growth.

"It is aimed at helping them to unlock ideas," she says. "It's not necessarily about the money, more about providing mentorship. Our role is to partner with businesses to help them be more eff ective so they spend less time stressing about the mechanics of their business, cash flow."

Ruha suggests New Zealand companies could take a bolder approach to going global and focus on international markets sooner rather than later: "Given new technology and the relative ease of acces to international markets, it might make sense. New Zealand is a small market, so do you spend what little capital you have in our small market, or go global first?"

Ruha says she is confident about the future. Millennials, she believes, are more open to being mentored and to getting back up after setbacks — and are more likely to start a 'global' business than previous generations.

Follow the full journey of ilabb, Flexo and Orbica and discover tips on how to grow your business at