SMELLIE ON SME's: Working harder? You're not alone

By Pattrick Smellie

Nov. 26 (BusinessDesk) - If you feel like 2012 was a harder year than 2011, you're not alone.

According to a new Bank of New Zealand survey of small and medium-sized businesses, six out of 10 business owners reckon they've worked longer hours this year.

Just where that got us all is another matter. The results suggest SME's are split equally into three broad categories - the third who grew, the third whose business was stable, and another third whose businesses contracted.

That feels about right for a very up and down year. For the first few months, there were signs of economic recovery, but business conditions tightened around July and August, producing the worst unemployment figures since 1999 in the September quarter.

Government Ministers and their economic advisers are now anxiously awaiting the December quarter figures in the hope either that the 7.3 percent unemployment rate recorded in September was a statistical blip or was the peak of a short recessionary bump in the road.

Either way, you'd be hard-pressed right now to find an economist who'll put money on the September quarter economic growth figures being anything other than flat. In fact, the pessimists think the economy might have shrunk marginally in the three months to Sept. 30.

If we got two quarters of recession in a row, that would put New Zealand officially back in recession.

However, that doesn't look likely. For a start, the Christchurch rebuild is finally starting to kick in. Those on the ground down south say most of the activity is still in home and infrastructure repairs. It's going to take a while yet before tenants start wanting to return to a central city that still has some demolition to go.

On the other hand, commercial property owners have to commit to new city centre developments fairly soon if they're to get full value from the replacement insurance policies.

On top of that, and despite poor employment figures for the region, Auckland is on the move too, especially in home construction.

The country's largest listed company, Fletcher Building, bucked the recent negative trend of economic news by strongly upgrading its profit expectations for the year to March 31, 2013, based mainly on its expectations of activity in both Auckland and Christchurch.

Likewise, there are signs the Australian economy - essential to so many small exporters - isn't quite as dead as we thought. While our jobless numbers were rising, the Aussies created more than 10,000 new jobs in the September quarter.

However, in ongoing tough times, SME owners need to keep thinking hard about how well they're managing their businesses, and whether some investment in areas of personal weakness would be worthwhile.

The BNZ survey found low levels of self-confidence among small business owners in their money and cashflow management ability. Very often, that boils down to having someone whose job it is to chase late payments

That doesn't necessarily have to be you. If you're no good at it, employ an accounts clerk a few hours a week. They can prepare your GST and do other basic accounting functions that will keep you on the straight and narrow more easily than sitting up half the night doing it yourself.

Medium-sized business owners are more worried about their people management skills, according to the BNZ. In that case, the answer could be to look at a short course. At the very least, understand your legal position as an employer so you don't run foul of rules you didn't even know about.

This is particularly important if you've got staff performance issues to manage. The days of a quick firing are long gone. Underperforming staff are one problem, but a run-in with the Employment Court is an even bigger headache.

The other area of commonly identified weakness is sales and marketing. Again, this is where hiring skilled practitioners could be the difference between struggling on and doing much better.

Tellingly, just one in four SME's is even thinking of hiring a new employee in the next 12 months, (one in three in Christchurch). That means if there's any growth in your business next year, your workload is about to rise again.

Keep an eye on that. Under-employed staff working more hours is a good thing for productivity, but there will always come a point where you're asking yourself and your small team to do too much.

Deciding when to hire is tricky, and so is hiring the right person.

But once you can see the need to do so, get on with it. Over-working your loyal staff is a good way to lose them, and if you're going to do it well, the hiring process always takes far longer than you expect.

Good luck!

(BusinessDesk)

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