New Zealand SMBs are viewing ways to increase profitability.
In New Zealand, 50 percent of SMBs are looking to increase “profitability or grow”, and 68 percent think that “their businesses could be more efficient”, reported Scoop News. According to the Xero Small Business Growth report, “Kiwi small businesses are more confident in managing their business this year”, but they also want to attain goals such as improving efficiency and “increasing profitability and spending less time on the business”.
Anna Curzon, Managing Director of Xero New Zealand, said that “business confidence and optimism is on the rise”, but despite this there is still “the same appetite for growth”, with only a “third” of SMBs “actively trying to grow”, while the remaining majority of “68 percent want to do more with less”.
Curzon added: “When we asked small businesses what activities they were undertaking to reach their business goals, most were focused on either expanding their customer base or increasing sales with existing customers. More than two thirds of small business[es] know they could improve the efficiency of their business. Nearly half [are] getting by without any business accounting tools and less than one in 10 businesses [are] using a payroll system, but these are some ways businesses can score some easy wins.”
In the same report it said that 34 percent of SMBs “recognise technology [as] a tool for success”, and yet 77 percent depend on devices like printers and fax machines and 74 percent smartphones “rather than software”, which would make “their business more efficient”. It also noted that only 10 percent use a debt management system and only “one in five has any job management or invoicing system”.
Curzon noted: “Small businesses need better business engines to drive efficiency and set themselves up for the growth they want to achieve, whether it’s with planning, financial management or technology.”
Comparing the figures to businesses that use “an advisor”, the report showed that “85 percent of small businesses on Xero receive advice from an advisor, [and] 74 percent of them use accountants”. It was also found that “businesses that use an advisor grow their net profit by 23 percent more than businesses who don’t” and that “over a two year period – accountants and bookkeepers have a huge role to play in driving the small business economy”.
Curzon concluded: “If small businesses embrace the right tools, they will be able to do more with less. We need to help small businesses find the right tools and plans best suited to their business and leverage experts to guide them. Improving efficiency not only helps set small businesses up for growth, it also helps them manage their growth and make the most of it. This is beneficial for the business owner and the New Zealand economy.”