An investigation into how New Zealand small businesses and their entrepreneurs are surviving in today's environment

Abstract

As just over 98% of businesses in New Zealand are small, and employ over half of the total workforce, they are extremely important to our economy. Not only do small businesses provide greater choice and variety to customers, they can be more efficient than larger firms for producing certain goods and services, increase competition in the economy, offer people a unique way of earning a living, provide a platform for new jobs and industries, and are an important avenue for entrepreneurs to enter the business arena. Despite these significant roles, little research has actually been undertaken to assess the level of progress small businesses are achieving in New Zealand and what factors may be inhibiting or enhancing their growth since the collapse of the share market and subsequent recession in 1987. There has also been little work done about the lives of the entrepreneurs who form and shape these businesses, and the real decisions and problems they face in this economy. The aim of this research is to scrutinise a sample of New Zealand small businesses entrepreneurs and discover how they and their businesses are surviving in today's environment. The research is based on longitudinal surveys undertaken on a group of small firm owners set several years apart. This has the advantage of being able to assess the progress and changes that have taken place in both the state of the businesses and entrepreneurs' lives over the last few years. The research closely investigates the quality of life of the entrepreneurs, the impact time constraints have on them, the influence of the Government's rules and regulations on their business performance, and their level of progress in terms of growth in turnover and employment. Existing relevant literature on these subjects is examined to determine whether any trends or contradictions have emerged with our research. In addition, we have sought to determine how significantly various economic events and other external shocks have impacted on the growth of small firms in New Zealand. Such events as the Asian crisis have the potential to drastically affect the state of the economy, consumer confidence and export opportunities, on which many of these businesses are highly dependent for success. The way in which these events were dealt with is also examined to analyse what makes one firm thrive where the other has not.