The size and diversity of the New Zealand small to medium size enterprise (SME) market is considerable and must be recognised as both an opportunity and weakness when talking about delivering upskilling solutions. We generalise too much. What may be fine as an approach in the Auckland market, is far from fine with the owner/operator working out of the boot of his/her car in Masterton. We need to start talking about medium, small and micro businesses.
The relationship between big businesses, as represented by the Business Roundtable, and medium businesses, is the same as the relationship between small businesses and micro businesses. We lump small and micro businesses together in the SME market and propose general solutions, but when it comes to representation we need to focus separately on small business and micro business reality.
The problems at the lower end of organisational size are closely related to the problems of the black economy, where revenues are so low that compliance avoidance has become way of life. Many micro businesses struggle to get enough cash to pay their bills on time. Their problems are generating sufficient cash flow and enough customers. To survive they sometimes pay less than the minimum wage, skip paying holiday pay, avoid giving staff proper meal breaks, or protective gear. Employees often don’t complain because they want or need the work. The employer/owner operators pay tax on what they declare and their GST and ACC levies.
The realities of the SMB market are:
1. SMB people often don’t know what they don’t know.
2. You cannot “do it to them”. They have to “do it for themselves”.
3. We spend lot of time, energy and money on the wannabes and need to find the ‘can-be’s.
4. The small and micro business people must take responsibility for themselves or be let to fail. Those who enter business must quickly develop business sense or have the sense to get out.
5. Small and micro business people tend only to buy the sizzle, never the sausage.
6. SMBs are at the bottom of the supply chain and are the last to be paid by suppliers and bigger businesses when they really need payment on weekly or fortnightly basis to survive.
7. Do not underestimate the importance of our education system for SMBs.
8. The two critical times for SMBs to succeed are when they first start up their business and when they want to expand their business and new set of management skills is needed.
The good news in upskilling is that six or seven years ago NZIM recognised there was an education gap in the small business sector. With help from the Auckland University of Technology we introduced, through the polytechnics, small business programme which continues to this day.
Those who take the course include:
* Mature students who need to obtain information and knowledge quickly on particular area of business and take one paper eg, marketing.
* Students coming out of the secondary school system who are already thinking about establishing their own business.
* New immigrants who need to know how New Zealand business operates.
* Mature students working in large business who, for whatever reason, end up running their own business.
Over the past three years we have developed programme specifically targeted for senior secondary school students. Without assistance, and as not-for-profit organisation, we have introduced it into more than 100 secondary schools.
The programme gets big praise from the students and teaching staff, is New Zealand Qualifications Authority (NZQA) approved, provides credits into the National Certificate of Academic Achievement (NCEA), provides credits into the polytechnics, comes with full range of quality resources and fits with the Young Enterprise Scheme (YES) run by the Enterprise New Zealand Trust.
The YES programme encourages students to set up companies, and they go through the full process of designing and producing product or service. In doing so they set and use budgets and produce marketing and business plans. They learn the importance of good communication, quality and consumer satisfaction.
The students learn how to negotiate and sell. So these young people do the hard yards. They face and solve many of the issues than often lead to start-up collapse.
There is now trial running in Northland of Young Entrepreneur Programme (YEP) by which students can choose self-employment as viable career option.
The point is, New Zealand must develop an enterprising culture where it is recognised that businesses create wealth and trade helps to redistribute that wealth.
Notwithstanding its value in moving students into valuing business and management careers, decisions by the NZQA on the advice of the Vice-Chancellor’s Committee have meant that no business courses provided in secondary schools are recognised for university entrance.
Finally, this year we have developed and introduced small business entrepreneurs programme where the ownership of the content is with the participants. This programme involves learning on the job with skilled mentor.
There is wealth of experience in the community and what has been missing is means for SMBs to get help in way that suits their businesses. We think we have the answer with framework which gives access to affordable help and deals with the problems while the small businessperson works and learns on the job.
The SMB registers on the programme and quality mentor is allocated.
The first module involves the owner/manager working with the mentor to review the business and identify what needs to be done. Projects could involve getting the paperwork sorted, lifting sales by 20 percent, improving understanding of the financials, getting more out of staff, or developing new product.
An action plan is prepared to help the individual deal with the most important business and personal issues. The mentor helps find the support skills and resources needed, for example BIZ programme, paper at polytechnic, or another short course.
We envisage the SMB participants being grouped into local clusters of six or eight. Each project is module in the programme. The participants will assess themselves against the goals set and, with the mentor, review what needs to happen next. The final module will be full assessment of the business so the participants can move on by themselves.
What will the owner/operators get from the programme?
• review of what is going on in their business.
• Decisions on what needs to be done and doing it.
• Help when they need it.
• check on how well they did.
• process of resolving ongoing issues in the business.
On the way through they will develop network of others who are working in SMBs.
This programme mirrors at the SMB level the current ‘fast forward’ programme that helps medium size businesses grow. The problem we have is lack of financial resources to roll the programme out nationwide. So far we have been unsuccessful in attracting any government funding. M
