How small businesses are surviving the recession: Centre for SME Research

26/02/10

Small and medium-sized business owners are changing products and services and, where necessary, working longer hours to combat the effects of the recession, the Centre for SME Research at Massey University says in a media release.

The centre, part of the University's College of Business, surveyed more than 1400 businesses and found 53 percent had introduced new or improved products and services to survive the global downturn.

Forty-four percent were making increased sales efforts and 48 percent of owners reported working longer hours. Yet, just over a quarter of the businesses say they have had felt no negative impact.

The survey, conducted as part of the Centre’s annual BusinesSMEeasure, aimed to find out how firms had adapted to the recession and how it has affected performance. The findings are being compared with results of a similar study in Britain to try to identify successful strategies.

By 2008, a third of the business reported feeling the first effects of the recession and, by October last year; this had increased to 69 per cent. However, 26 per cent reported that they had not yet felt the effects of the recession.

For most, but not all, sales are declining and the pace of the decline is picking up. Half said second quarter sales in 2009 were worse than first quarter sales the previous year. However, one in five businesses bucked the trend and reported sales increases.

Centre director Professor David Deakins says the findings show the "remarkable" resourcefulness of New Zealand’s small and medium-sized enterprises. “Strategies that businesses are introducing to combat the effects of the recession are contributing to their resilience."

At the Finance 2010 event hosted by Massey and the Auckland Chamber of Commerce last Thursday, Finance Minister Bill English noted that New Zealand businesses had coped better with the current downturn, despite it being much more significant globally, than that of the 1990s.

Professor Deakins will present the findings of the latest research at a seminar at Massey's Wellington campus next Wednesday.

Professor David Smallbone from London's Kingston University will present the research done in Britain.