The easy environment, proximity to Australia, language and exchange rates make New Zealand a logical place to start if you’re an overseas business looking to expand offshore.
Plus NZ’s extensive Free Trade Agreements provide additional incentive, especially if you’re targeting markets in the wider Asia Pacific region.
Proud kiwis and partners at Auckland’s Alliott NZ Accountants, Vanessa Williams CA and Greg Millar CA, weigh in on the advantages and disadvantages of starting and running a small business in New Zealand.
What qualities are vital to building a successful business in New Zealand?
It is a combination of an entrepreneur having vision and doing something they really enjoy, which makes a difference in an existing market or creates a new market, plus mobilising a very talented team. If you start with those things the rest should fall into place, especially with a great support mechanisms in place.
Is New Zealand a fertile environment for launching a new business?
The Australia New Zealand Closer Economic Agreement (ANZCERTA) created one of the world’s most open and successful free trade agreements. This points to a positive outlook for Australian exporters, in particular, with New Zealand’s strong economy (NZD$176 million surplus estimated for 2015/16 and a NZD$3.6 billion surplus for 2018/29) driving strong demand for high quality goods and services across a range of industries.
If you’ve got the desire and you either create or find an opportunity in the market, we would suggest that any time is a good time to start a business, especially in light of low interest rates at this time.
What are the biggest hurdles for growth?
If you have reached the stage where you are ready to expand your business and open up another location or branch in another site, the hard work is only just beginning for this next phase of your business’ development, and the first thing you’ll need to do is get proper planning in place.
Given the size and diversity of New Zealand, what advantages may local, regionalised businesses have over larger, nationwide companies?
Often, being on the ground and knowing your customers is best, but it really depends on the nature of your business. If you’re a web-based business, you can be literally be located anywhere because geography is less of a factor. In the tangible world of shopfront bricks-and-mortar, New Zealand is relatively compact but our regions can be remote, especially with the north / south island divide, so having local knowledge helps immensely.
Does the size of the New Zealand market make it easier or harder to thrive compared with countries such as Australia?
In some respects, if you’re good at what you do and you have 10 times the population as your catchment, that makes it significantly easier to make a difference and get the volumes, economies of scale, etc. On the other hand, if you’ve got population x 10, then you could have competition x 10 so those metrics tend to even out.
How important is small and medium business to New Zealand’s overall economic health?
Huge. Generally speaking, every large business started as a smaller enterprise. The small to medium-sized businesses create the majority of the employment in New Zealand. Many of those enterprises are family run and, as a result, more engaged with their local communities. The notable difference is that the small and medium-sized enterprises are more engaged and typically better invested in the communities in which they operate. It helps if they have great support from the get-go.
Do you feel that New Zealand supports smaller business operators?
New Zealand offers great opportunities for all businesses thinking of expanding into a new market. The ANZCERTA has opened up the New Zealand market for many Australian industries, and significant numbers of businesses are already taking advantage. Understanding the key considerations, as well as the steps to overcome any barriers to entry, will enable your business to navigate entry in the New Zealand market.