What happens to new businesses in New Zealand?
I care about the future of our small and medium-sized businesses. Behind these figures are people who’ve put their time, money and energy into building something of their own. If you’re one of them, I want you to see what the numbers say and have something practical you can do with them.
The first five years
Of the New Zealand enterprises that started in 2019, 46% were still active five years later in Stats NZ’s business demography series.
| Time since starting | Share still active |
|---|---|
| One year | 86% |
| Two years | 70% |
| Three years | 60% |
| Four years | 52% |
| Five years | 46% |
Of the businesses that started in 2015, 27% were still active ten years later. The series tracks economically significant enterprises across industries and business sizes. The reasons individual businesses stopped appearing can vary.
Stats NZ survival data via Figure.NZ
MBIE estimates that small businesses with fewer than 20 employees make up around 97% of all enterprises.
The 80/20 rule and where to spend your time
You may have heard that 80% of new businesses fail. In the 2019 group above, 46% were still active after five years. The 80/20 rule I use in business is a way to ask a different question. Which small number of activities make the biggest difference to your results?
Start with your own numbers. Look at the last three months. Which customers or jobs left you with the most profit after direct costs? Which sources brought you enquiries that turned into good work? Which jobs took up more time than you expected? The split will vary from business to business. What matters is spotting where your time is paying off and where you could use it better.
Let’s talk about your business
If you’d like a hand making sense of your numbers or deciding what to tackle first, give me half an hour. I’ll listen to where you are and where you want to go. Then we can work through what deserves your attention first. The decisions are yours.