Tag Archives: News

Press Release – May 2012

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Building a ‘Network-of-Influence’ with those who can best influence a positive outcome – SME owner / managers; not the Government.

In October 2011, Tenby Powell and Sharon Hunter (of Hunter Powell Investments: PC Direct, Hirepool & NZ Rental Group, EuroPacific Foods and Envoy360) began contemplating why very few New Zealand SME’s create an international, or even a national, enterprise given this sector represents 97% of all businesses.

It came to mind over the wet summer of 2011, as their investment in new start-up venture, Envoy360, a maritime security company operating out of Dubai and Singapore, was experiencing significant growth after only six months of operations under challenging conditions.

Is it that Kiwi’s aren’t motivated? Is it that the moat theory has become a self-fulfilling prophecy for many and, therefore, it’s all too hard?  Or is it that we have bought into the three B’s mantra (Boat, Bach and BMW) and simply stop at a comfortable point?  Has the Reserve Bank’s capital adequacy rules stifled investment funding? And of those SME owners seeking growth funding, are they forced to leverage the family home for lack of alternative financing options therefore reducing their risk appetite. And importantly, is Government interested in resourcing this sector with growth enabling initiatives?

So, together with Chris Simmons, their friend and colleague from the 2009 NZ Entrepreneurial Summit, they decided to start The New Zealand SME Business Network.  The founding motivation was (and still is) to develop an active Group of SME owner / managers from whom practical ideas can be generated to better understand & address some of these issues. This differs to past approaches in that it is not an academic exercise.

Over the past five months (the Group was started in December 2011 and now has circa 750 members) it has become very apparent that members of this network have a wealth of experience & abundant ideas to stimulate New Zealand’s sluggish economy.  Something Powell describes as a “Network-of-Influence”.

When probed further, Powell says, “The discussion threads have been intelligent, insightful and, occasionally, inspirational.  And, advantageously, it has also been apolitical enabling everyone to have a voice.  This is something that has been lacking in the SME community for too long”.

“What we desperately need is Leadership Thinking, which small business owners have traditionally abrogated to consultant advisors, Politicians & Government Officials”, says Powell.  “The prime objective in developing this Network-of-Influence  is to create ownership of Leadership Thinking by those who can best influence a positive outcome – SME owner / managers; not the Government”.

Hunter, Powell and Simmons have a disarmingly simple thesis, which reads like a strategic plan drafted by successful entrepreneurs – it is clear, simple and easily executable.

In simple terms it advocates that practical, hands-on, small business owners are in a significant position of influence. Their collective commentary and contribution to the Linked In (social media group) discussion threads speaks volumes in quantity and quality of ideas to jump-step the NZ economy.

While discussions have mostly focused on economic growth, the founders go to some lengths to argue that the SME community offers much more to New Zealand’s future prosperity then just creating a business to make a profit.

Powell cites a recent article in Forbes magazine that talked about the new ethos that is emerging to take the tenets of corporate social responsibility to the so-called “little guy”, as an increasing number of small businesses integrate a mission of social impact into their profit motives.

“In essence Forbes was talking about Impact Investing – those investments based on the practice of assessing not only financial returns, but also the social & environmental impacts. An impact investor seeks to create social good or improve the health of the environment, as well as achieve financial returns”, says Powell.

“The SME economy is now gaining an optic throughout the world. While America’s media focus remains on Wall Street, it is the small businesses on Main Street that may yet win the medals of valor in the US war on economic recovery. And it won’t happen without an equally positive social impact; ditto in New Zealand & elsewhere”, he says.

Powell, an experienced builder of multi-disciplined teams, see’s significant economic and social upside for New Zealand by harnessing the potential Leadership Thinking lying dormant within the cultural diversity of the SME ownership group.  “The heterogeneity among SME owner / managers, with their different ethnic, religious & educational backgrounds, is not dissimilar to a multi-disciplined team whose diversity often enables them to solve problems or execute plans more effectively than that of their homogenous counterparts”, he says.

“This diversity could contribute to a powerful source of Leadership Thinking which, if captured & executed appropriately, could change New Zealand’s economic landscape and with it, also make a positive social impact on our country”, says Powell.

Tenby Powell is the co-Founder & Director of Hunter Powell Investment Partners. He is Chair of ENVOY360, Hunter Powell’s latest start-up, Chair of Waikato Link (the commercialization company of the University of Waikato), a Director of Antarctica New Zealand (a Government entity) and a Trustee of the Auckland Rescue Helicopter Trust (Westpac Rescue Helicopter).  

The Iron Lady lifted the UK economically by focusing on SME performance.

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  We can do it in New Zealand too!

Since the publication of the Bolton Report in 1971 the contribution of small and medium-sized enterprises (SME’s) to economic growth, job creation, innovation and promotion of enterprise has been widely recognised in the developed world. While SME’s are important in terms of their overall share of GDP, it is also acknowledged that many smaller firms lack the managerial and technical skills, which inhibits their effectiveness.

In the first four years of the first Thatcher government, more than one hundred SME-related policies were introduced (Beesley and Wilson, 1984). And the Competitiveness White Papers published during the 1990s acknowledged that small firms, particularly those that were growing rapidly, could make important contributions to competitiveness (Johnson et al., 2000).

So – in October 2011, we started a Linked In Group called the New Zealand SME Networking Group. The Group was formed in recognition of the fact that 97% of all NZ businesses are SME’s (employing 19 or fewer people), yet we get very limited support despite the positive economic impact this sector could have on New Zealand.

Our objective is to provide support, in the form of practical initiatives, to SME Business owners by those who have successfully grown SME’s here & abroad.

It is our intention to form a working party to draft a White Paper for Government, in cooperation with the Minister of Small Business and Associate Minister of Commerce, Hon. John Banks, who has already been very supportive.  Following a recent meeting with Banksie, he has offered the full resources of his electoral office as a secretariat.

Banksie clearly demonstrated to Sharon Hunter and I that he understands SME’s; he has been in business for 40 years, mostly in parallel to his political career, and implicitly understands the issues at a practical level. He cited a number of examples where established businesses, some with many decades of trading history, are in real trouble and the long awaited economic recovery, that faint glimmer on the horizon, may be too little, too late when it finally comes.

While it is our intention to work constructively with Government, we are not waiting for help in any form. And, after talking to Banskie over lunch (which he paid for, btw) we are convinced that by pooling ideas from the SME Group, together with other business leaders, including the Minister and his team, we should be able to generate a range of practical growth initiatives to stimulate our SME businesses and, at a macro level, our country economically.

We now have over 350 members, many of whom are successful entrepreneurs or senior corporate managers who have generously pledged pro bono time to work on developing initiatives to lift NZ’s SME performance.  Many are KEA members – Kiwi Entrepreneurs Abroad who are highly motivated to see New Zealand lift out of the doldrums.

We will keep you updated both here, on our web site, and in the New Zealand SME Networking (Linked In) Group on progress.

Next week we will release a short study done by one of our members, Steve Norrie, Director of Streetwise Consulting Ltd.  Steve has addressed a major issue, bank lending to SME’s.  SME’s depend heavily on access to capital from their bankers.  Banks repeatedly claim that they are continuing to support Kiwi businesses, but the facts say something different.

Please join The Group on Linked in¨ http://www.linkedin.com/groups?gid=4202444&trk=myg_ugrp_ovr

Tenby Powell is a Director of Hunter Powell Investment Partners

 

Women in Business

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Risk . . . is simply an assessment of how much you have to lose and how quickly you can bounce back from mistakes, aka failure; all offset with a natural optimism that leads entrepreneurs to believe that wild success is just around the corner.

Well . . . that’s how I viewed it at 22 years old when we started PC Direct.  And you know, apart from the timeline being significantly shorter for bouncing back, and a wiser head that knows that wild success is highly correlated to good market research, a good business model, developing a great team, and a heap of hard work, very little has changed.

And yet everything has changed.  I’m now 44; I have real responsibilities: Mother of two children, wife of a successful partner, Daughter and Sister to a crazy / wonderful family, Director on some amazing Boards, friend and confident to some amazing women  . . . but in February 2012, I’m going to risk it all again with another start-up.

Entrepreneurs are eternally optimistic and quintessentially risk takers. One of New Zealand’s most successful entrepreneurs told me recently that he thought luck played a big part in success – in his case, as much as 40 percent.  Agree or disagree, you have to be prepared to take the risks first to know whether lady luck is on your side. Risk and Reward go hand in glove.

New Zealand has a wealth of extraordinary women entrepreneurs; some high profile, some behind the scenes.  So how are we viewed globally?   In 2004, statistics suggested that women represented only 19% of senior management positions globally. By 2007 it increased to 24%; ditto for 2009. This year it has dropped back to 20%. But not in New Zealand. We have jumped from 27% in 2009 to 32% this year (Grant Thornton International Business Report, 2011).

NZ women have a long and colorful history at bucking trends, starting in 1893 by becoming the first country in the world to give women the vote in national elections. It has been suggested that the representation of women in government can be seen as an indicator of wider leadership representation more generally.  We certainly saw that during Helen Clark’s era, with women holding all our top political, judicial and civic roles.

The question for me is – how does this translate into women in business?  Particularly, what is the impact for women Owner / Managers of SME businesses?

Dr. Kate Lewis, research associate at Massey University’s Centre for SME Research, predicts that the proportion of women entrepreneurs is growing.  2007 statistics showed that women made up 36% of self-employed people in New Zealand; Dr Lewis believes this NZ trend will increase in line with global trends.

The Centre for Women’s Business Research (2009) shows 40% of private firms in the United States are now owned by women. A ten-fold increase from 30 years ago. Internationally, women are starting businesses at twice the rate of men, with young women and mums being two of the fastest growing women entrepreneur demographics.

What drives this trend?  Are women becoming more comfortable with risk? Are we more willing to chance an uncertain future and possible failure for the speculative gains of self employment? Or is it a more complex blend of all these dynamics, together with a desire for greater flexibility, better work/life balance and the ability to blend motherhood with career and financial aspirations?

The answer is likely as varied as the women themselves. While I couldn’t have envisioned it at 22 years old when I co-founded PC Direct, the ability, some 9 years later, to attend a meeting, stow my baby son under the board room table and surreptitiously rock him with my foot, while I helped judge the More Magazine “Women To Watch”, exemplifies the space women seek to create as we endeavor to combine family and career.  Ultimately, self employment gives women flexibility; it enables us to achieve personal and professional goals on our terms. But it comes with an overwhelming amount of juggling and hard work.  The greater the success; the greater the juggling.  Still, we self-employed gals get to choose how many balls we throw in the air (sorry lads) and choice, after all, is flexibility by another name.

Some 14 years later, I still cherish the flexibility provided by professional Directorships, Not-for-Profit commitments and self employment.  And . . . in February 2012, I’m going to risk it all again with another start-up.

Sharon Hunter is a Director of Hunter Powell Investment Partners, Primary Growth Partnership (a Government entity under MAF), Starship Foundation. Robin Hood Foundation & Rugby world Cup 2011 Office.

 

Business in New Zealand

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New Zealand is a weird shaped country on the edge of the earth with only 4 million people.

If we were shaped like Singapore (a circle) and still geographically positioned we’d be better off in terms of internal logistics and transport costs. If we were our current shape but located in Asia, Europe or the Middle East we’d be fine because we’d have easy access to significantly larger markets.

But we are here – which is wonderful for many reasons including business ownership but it comes with unique challenges.  We believe that, since the Global Financial Crisis (GFC), New Zealand is well positioned economically and socially for growth – providing we understand how to adapt to the challenges of the modern world and make the new environment work for us domestically and internationally.

The shifting economic powerbase from the US and Europe to Asia has been accelerated by the GFC which has impacted on New Zealand’s major export markets and affected revenues of both exporters and domestic businesses.

However reports by banks and major accounting firms are now showing positive business behaviors resulting from these challenges. Specifically, many SME businesses are actively communicating to and engaging with customers.  While this may seem obvious, it is challenging for many, requires specific skill-sets and can be very costly if it doesn’t work.   Similarly, active management of accounts (debtors, cash flow and related costs) often slides in busy periods and usually captures a lot of value.

We encourage you to re-focus on these disciplines as it should positively impact on profits. Please call us to talk through these issues including the positioning of your company for future growth as the market lifts.