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Small Business Report

We’ve been doing some research around unlocking productivity in the small business market.  The outgoing Minister for Small Business Clayton Cosgrove nailed the importance of this sector with this quote recently …

“the high number of SMEs makes them important to the economy, but it is their potential for growth that makes them vital to the government’s economic transformation agenda.”

Small Business contributes $50b to New Zealand’s GDP!  We believe online technology is the key to improving productivity in the sector. The numbers are simply staggering. Minor productivity improvements can grow GDP by $500m or more.

You can download our report here …

Our recommendations to the Government are:

  1. Educating SMEs on the benefits of being online in all agency communications.
  2. Promote www.business.govt.nz as the business to government website.
  3. Allow high quality New Zealand solution providers to be certified and profiled on www.business.govt.nz
  4. Encourage the Small Business Advisory Group to play a larger role in the design of the www.business.govt.nz portal so it meets the needs of small businesses on an ongoing basis.
  5. Look to expose key government information as web services so that application providers can integrate government activities into the workflow of their solutions. Individual government departments do not need sophisticated transaction websites. This work is incremental and can start immediately. (For example filing of GST returns as a web service.)
  6. Establish a single business identification number for all trading entities to facilitate commerce between New Zealand small businesses.
  7. Work with the private sector to take a global leadership position in Standard Business Reporting.
  8. Accelerate the Standard Business Reporting project, starting with an opt-in voluntary service.

Please note: this document and the recommendations contained within represent the independent view of Xero Limited.
Report last updated 24 November.

 

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6 comments

Ben Kepes
21 November 2008 #

Rod

Great work. As you know, but your readers don’t, I’ve long felt the best place for business advice is out of the hands of government and leveraging the peer relationships that SMEs have.

To this end I believe a business advisory site which is neutral and independent is preferable to the likes of business.govt.nz

As you also know – in a matter of a few weeks NZ SMEs will have such a vehicle – we’re working hard to create it and hope the community will come and utilise the platform we’re building….

More soon

[...] posted about their report into productivity gains for the New Zealand SME community. As Rod pointed out – [...]

Berend de Boer
21 November 2008 #

Rod: Allow high quality New Zealand solution providers to be certified and profiled on http://www.business.govt.nz

How much does it cost to bribe the officials to be certified Rod?

And Ben, you’re completely right. The last thing business needs is more costs imposed upon them because certain other businesses feel it’s necessary to have a government business advice stacked with bureaucrats. And someone will be paying for them.

Rod Drury
21 November 2008 #

@Berend Acknowledging the asymmetry of effort and thought that went into your comment compared to our report, none of us are promoting additional Government costs or costs to business. Quite the opposite.

Xero and every other software provider shows that the private sector is willing to invest in great solutions. As anyone who has tried to build a software business knows, the hardest thing is making small businesses aware that great solutions exist – as they are just so busy. And if they did have the time, there is no obvious single place for them to go for information.

Marketing is the biggest challenge for our tech companies. The best money into the business is sales revenue. The Small Business Advisory Group (SBAG) had as one of their key findings that small businesses want to know about great solutions that will make their life easier. Up until now Government websites have avoided promoting or even listing New Zealand solutions. The SBAG recommendation is therefore significant.

It remains a fact that small businesses will still have to communicate with Government and vice versa. At no additional cost, existing Government communications could promote to small businesses a single destination to find good solutions to help them in business. This has a win-win effect of assisting NZ solution developers get customers. That has to be a good thing.

I think some sort of certification should be in place otherwise it just becomes a directory. In the accounting space the Institute of Chartered Accountants of England and Wales (ICAEW) provide certification (at the vendors cost) so that small business consumers can have some independent appraisal of quality. Otherwise there is too much noise.

None of this has to cost much, if anything, with a big upside to the entire small business community and country (as laid out in our report) as well as solution developers.

I’m sure your comment on bribery was flippant as it’s too insulting to take seriously but the ongoing theme of anything that involves Government is bad – is just old thinking and does not make the NZ boat go faster.

Ben Kepes
25 November 2008 #

Fair call Rod – my own perspective isn’t so much one of “Government bad, private good” but rather one which holds the (I believe) realistic view that if a robust and challenging dialogue is to be held, it’s best to hold it in a private forum. Governments aren’t able to let discussions be as “loose” as they can be on third party sites.

Agree re the SBAG recommendations – but mindful that almost none of the recommendations from either SBAG report have actually been actioned

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