ADVOCATE COLUMN 4th WEEK FEBRUARY 2013

New Zealand Chambers of Commerce Northland has a wide range of resources available to assist start up businesses avoid many common pitfalls and is also a partner in the Regional Business Partnership whose objective is improved business capability for Northland businesses. There will always be entrepreneurs who have an aspiration and the energy to take on new challenges and according to a 2011 World Bank survey, New Zealand is ranked as the easiest place in the world to start a business and ranked only to Singapore and Hong Kong for ease of doing business. There are few restrictions on establishing, owning and operating a business in New Zealand. The process of starting a business can take as little as three days. Having said this, since 2003 the numbers of start-ups have been declining at an average of 1200 per annum. Much of this decline has occurred in service industries such as financial and insurance, real estate and professional, scientific and technical services. While there are currently more businesses exiting the market than entering, there will always be those who wish to start a new business. In some cases, difficult economic times and a tight labour market put people in a position where they feel that starting their own business may be the best way of providing them some financial security. This is supported by the fact that a large majority of New Zealand businesses are owner operators and most of start-ups do not have a significant number of employees. Obviously it is in everyone’s best interest if these businesses are long-lived and eventually grow their capacity to a level where they can become employers of local labour. Their sustainability will be dependent on a number of factors not the least of which is the degree of planning and research that they undertake prior to commencing their enterprise. Do you really know that the venture will be financially viable or how much money they will need to cover their overheads? Does the product or service have a compelling point of difference that will persuade the market to buy from them rather than a competitor? Does the aspiring entrepreneur have the skills, knowledge and personal attributes to run their own business successfully? There are many other questions they will also have to resolve but if they are unable to truthfully answer the above then perhaps further work is required before they place their personal assets at risk on an uninformed action.