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Berghan Mark
Works at A2ZTranslate Ltd.
Attended University of Auckland
Lived in Auckland
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Berghan Mark

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On NZ Business Failures

There is an often quoted statistic out there, that 90% of NZ businesses fail within the first 12 months. Some of the others that I have seen recently include:
93% have less than 10 employees
Average wage paid to SME owners is $40k
74% are deemed unwilling/unsuitable for expansion

Errgh, ahhhh, soooo what, exactly? This is some incredible disaster? The sky will fall in? 

Sound bites are all well and good. But damn, aren’t we all a little bit hard on ourselves? It is election year after all, and with one party trying to make us feel better about ourselves (guess which one?) while another strives to make us feel less well off (I wonder who?), perhaps a dose of sunshine, with added chlorine, will do us some good.

Shall we deconstruct this data a little? And try to make some sense of it in the real world? 

OK, disclaimer time. I am the owner of an SME, established 2002, got smashed seriously 2008-2011 (had to sell the house), and am rebuilding. Rebuilding, I might say, somewhat successfully (hands raised in prayer between typing this). Have 4 staff here in NZ, and 4 overseas. I’m your classic NZ SME. Any long term business operator here will know what I am talking about.

So lets look at the first statistic:
90% of NZ businesses fail in the first year.

Not to put too blunt an explanation on it, but BULLSHIT. This data is taken straight from the companies office/statistics NZ. Now, how many of these “failed” companies are actually set up for tax, inheritance, trust etc. purposes and allowed to “fail”? How many were a good idea at the time, but never actually traded? I would guess somewhere around 20%, but who would ever know?

Basically, rubbish statistics.

Ok, so next:
93% have less than 10 employees

Umm, so what? It is after all the 21st century; I employ full-time 8 employees, but have available over 3000 vetted contract employees on call on a piece work basis; in any given year I probably contract around 800 of them for a project. Hmm, welcome to the 21st century! I have less than 10, yet more than 800 employees, I wonder how that matches your statistics?

And then we have:
Average wage paid to SME owners is $40k

Umm, so what (again)? If someone chooses to live a lifestyle whereby $40k makes the cut, who are you (or I) to judge? By the way, did you count the vehicle (no), the home office (no), the travel (no) etc. etc.

Let’s get real please?

And the last point:
74% are deemed unwilling/unsuitable for expansion

Very few businesses SHOULD expand; most are tied to their geographical location and/or local service. So why should we expand? If we are happy where we are, why do we need to follow your instructions? Some businesses are just unsuitable (e.g. geographically) for expansion, others may just be happy with where they are at, and don’t need to.


To surmise, I really, really get sick of Kiwis trying to screw other Kiwis by saying they aren’t “doing enough” or they aren’t “growing fast enough”. For plenty of us, the ability to take the kids on holiday for 4 weeks at a stretch (and bugger what the school says), the ability to take time off when the Mrs (or Mr) is ill, the ability to attend a tangi the other side of the motu, these are some of the benefits of being your own boss. 

Did you ever calculate them?

And finally, did you know that 25% of the businesses established 10 years ago in NZ are still running; i.e. they are profitable. If 25% of my ideas had legs like that I wouldn’t be here writing this; I’d be on the beach in Tahiti (naah, probably Matauri Bay, but who knows, it’s all supposition anyway). 

Celebrate the successes. There are no failures, just experiences.

Kiwis are pretty bloody good businesspeople, actually.
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Have him in circles
23 people
Sohail Moghal's profile photo
praveen Fezer's profile photo
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Business owner
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  • A2ZTranslate Ltd.
    Owner, 2002 - present
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Auckland - Nagoya - Jakarta - Bangkok - Whitianga - Punaruku
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Middle aged Pakeha
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Owner of A2ZTranslate Ltd., a translation agency. 
Pakeha/Ngati Kahu, well over halfway if we can believe the statistics, living abroad but with a big stake in the whenua.
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Actually did a bungee jump naked
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  • University of Auckland
    BsC, 1987 - 1989
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