Covid a catalyst for New Kiwi Businesses

The Covid-19 lockdown gave many Kiwis the time the motivation to launch new businesses, new data from ANZ suggests.

Since the end of Covid-19 level 4 lockdown in April ANZ New Zealand has seen a 13% increase in the number of small-to-medium business transaction accounts opened, compared to the same period in 2019 (1 May-1 December).

This rise in activity is consistent with a jump in the number of new businesses listing on the NZ Companies Register, with more than 38,500 listed since May, up 20% on the same time last year.

“Some of these start-ups have spotted new opportunities emerging from the disruption caused by Covid-19,” said Mark Hiddleston, Managing Director – Business, at ANZ New Zealand.

“Since the level 4 lockdown we’ve seen more Kiwis look to start their own business as a source of income.”

Between May and December, ANZ New Zealand also saw a 22% decrease in the number of business transaction accounts closed by small-to-medium sized businesses, compared to the same period in 2019.

“The measures like the Government’s wage subsidy and business finance guarantee schemes have helped many businesses get through what was a lean and uncertain time,” Mr Hiddleston said.

“It’s great to see many of them coming out of the other side intact, and now working to re-build their businesses with an eye on new opportunities.”

“Some of these start-ups have spotted new opportunities emerging from the disruption caused by Covid-19.”

Mark Hiddleston, Managing Director – Business, ANZ New Zealand.

During Lockdown

Infometrics estimated that during lockdown only 53% of New Zealand’s workforce were on the job and almost 1.2 million workers were at home.

“It seems many people have used that time to think up new business ideas or to develop existing ones, and to identify gaps in the market, especially around selling online,” said Mr Hiddleston.

“Today’s small start-up could become tomorrow’s next big employer, so it’s great to be able to support this kind of activity.”

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New entrant

Snow gear and eyewear company POWDA is one company that started during the Covid-19 pandemic.

Its founder Kim Western was undeterred by the country going into lockdown.

Instead, she used it as an opportunity to develop a website and her relationships with other retail and outdoor experience businesses.

“I was made redundant during the pandemic which initially made me worried,” Ms Western said.

“But very quickly I turned my thinking around and saw it as opportunity to focus solely on growing POWDA.”

“One of the best things to happen during and after lockdown was the way businesses collaborated. Egos were put aside and we helped each other get through.”

 “My business relies on people being able to go outdoors so the lockdown and restrictions on gatherings had a huge impact."

“Without international tourists there have been fewer people on the mountain this year, but it’s been overwhelming to see the support New Zealanders have shown to local companies.

“I’ve had a lot of people reach out to me, wanting to buy from a Kiwi-owned business.”

 In choosing a bank, Ms Western put a post on Facebook, asking friends which bank was the best for small business.

“By far, the most recommended was ANZ,” she said.

“The extras ANZ offers you as a small business, like accounting software MYOB and multiple accounts for separating different budgets for marketing, wages and product really helped me when I was just starting out.”

“I was made redundant during the pandemic which initially made me worried, but very quickly I turned my thinking around and saw it as opportunity to focus solely on growing POWDA.”

Kim Western, founder, POWDA

Small business playing a significant role

Considered the backbone of the economy, small and medium-sized enterprises (SMEs) make up 97% of all New Zealand businesses.

They employ more than 630,000 people (29%) and generate 28% of New Zealand gross domestic product (GDP).

“These businesses are playing a key role in New Zealand’s economic recovery and we’re committed to supporting them,” said Mr Hiddleston.

“We’re expecting a strong bounce in GDP this quarter and although it will favour some sectors more than others, it’s heartening to see our economy and the businesses at its core showing such resilience.”