New Zealand’s new entrepreneurs are focused more on personal fulfilment than profit when they make the decision to start a new business, according to the latest MYOB Business Monitor survey of over 1,000 business operators nationwide.
When asked about their main reasons for starting their business, 41 per cent of start-up operators, (in business for two years and under)said they went into business to control their own destiny. Only 19 per cent of start-up operators said they established their business as an investment strategy to make more money.
Other important factors in business owners’ decisions to go out on their own included doing something they are passionate about (30 per cent); seeking greater flexibility to do what they want, when they want (25 per cent); and having a total lifestyle change (24 per cent).
MYOB General Manager James Scollay says the results highlight that most local business owners don’t start out with financial success as their main motivation.
“For most SME operators, starting a business is more about loving your work; finding something you are passionate about and doing it well, while at the same time taking control of your own career,” says James Scollay.
“This, of course, has an enormous impact on the kinds of businesses New Zealanders set up, how they are established and the way business owners look to grow and develop their operation. It also means that there are lots of different ways of measuring success in local businesses. Everything from building and growing into a major organisation, through to doing something you love that might also give you more time to spend with the family or travel the world.”
“As businesses progress, the survey shows that business operators more become focused on improving their financial position,” Mr Scollay says.
While greater personal freedom is what motivated most SME operators to start their business, the majority (53 per cent) saw growing their business and making more money as a primary goal for the future.
Forty-three per cent say their dream is to be profitable and successful, 37 per cent want to focus on making enough money to live on, 17 per cent plan to sell to fund their retirement, while 7 per cent want to build a franchise and sell it off.
“As most business operators understand, reaching those goals is a lot of hard work,” says Mr Scollay. “And unfortunately for many, it will involve sacrificing the lifestyle and flexibility they got into business to achieve in the first place; at least in the short-term.”
According to the survey, start-up business operators are significantly less satisfied with their work life balance than the SME average, with 39 per cent satisfied compared to the SME average of 55 per cent, and 32 per cent dissatisfied (25 per cent average).
“The good news, though, is the long hours and the hard work of the start-up period will pay off quite quickly – with satisfaction with work life balance climbing to 50 per cent for SME operators who have been in business for more than two years.”
Start-ups performing well
According to the Business Monitor research, start-up businesses have performed better over the last 12 months than more-established businesses, with 36 per cent reporting a revenue rise in the year to March 2015, compared to 32 per cent for SMEs overall.
Start-up operators are also projecting a strong 2015/16 year, with almost half (48 per cent) forecasting revenue will improve in the next 12 months (40 per cent SME average) while just 7 per cent expect their earnings (11 per cent average).
Local start-ups are also enjoying a solid quarter, with 41 per cent reporting more sales and order in the pipeline 41% and just 8% less.
The proportion of start - ups looking to employ more staff in the next years is over double the SME average, with 15 per cent intending to increase the number of full time positions they create (7 per cent SME average) and 24 per cent looking to take on more part time employees will increase (11 per cent average. Over a fifth (21 per cent) also plan to increase pay rates in the 2015/16 year.
“Every year thousands of Kiwis take the huge step of starting their own business,” says James Scollay. “It takes not only hard work and skill but also enormous courage and determination to back yourself and – as the majority see as the key motivation – take control of your own destiny.”
Future of Business at TEDxAuckland
Meanwhile, MYOB attended TEDxAuckland 2015 on Saturday 2 May to find out what attendees thought about the future of work in New Zealand in. We posed the question: “What is the Future of Business?”, and received a variety to responses including views around sustainability, the role of small business, and technology.
Please view the short video below.
To find out more about the Future of Business, visit: www.myob.co.nz/futureofbusiness.
For MYOB product information, research results, business tips, discussions, client service and more visit the MYOB website, or its blog, LinkedIn, Twitter, Facebook, Instagram and YouTube sites.Losing access to data, having business information hacked and even snooping foreign governments are among the concerns of local SMEs expressed in the latest MYOB Digital Nation report.
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Established in 1991, MYOB is New Zealand’s leading accounting software provider. It makes life easier for approx. 1.2 million businesses across New Zealand and Australia, by simplifying accounting, payroll, tax, practice management, CRM, websites, job costing, inventory, mobile payments and more. MYOB also provides ongoing support via many client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly in cloud computing solutions, and has spent $100 million in past three years on research and development. For more information, visit myob.co.nz.
About the MYOB Business Monitor
The MYOB Business Monitor is a national survey of 1,000+ New Zealand small and medium business owners and managers, from sole traders to mid-sized companies, representing the major industry sectors. It has run since 2009, commissioned to independent market research firm Colmar Brunton. This most recent survey ran in January/February 2015. The Monitor researches business performance and attitudes in areas such as profitability, cash flow, pipeline, technology usage and the government. The weighting of respondents by both geographical location and sector is based on overall market proportions as established by Statistics New Zealand and is drawn from an independent survey group, which includes both MYOB clients and non-clients.