Get In Touch
Ph: +64 4 977 7877
Work Enquiries

Why is the “Small” NZ B2B Market a True Land of Opportunity?

So, you keep hearing that the New Zealand market is small?

But what does that mean?

Small compared to WHAT?

How are you meant to make successful financial decisions for your business in a marketing world full of misleading umbrella statements with little statistical explanation?

You should be able to make financial forecasts with confidence, using both the creatives of marketing and the facts of numbers, so let’s look into just how “small” New Zealand’s market is. 

When it comes to measuring the size of anything, we have to talk numbers.

As intimidating as they may seem, numbers are exciting. They come alive with human touch, an explanation and an idea of what the numbers mean can completely evolve a set of statistics and give them a whole new meaning.

The idea that the New Zealand market is “small” is a lot more complex than we are led to believe.

New Zealand is a small country, so naturally, the overall number of local businesses is less than in larger countries.

For example, it’s fair to assume that if the UK’s population is nearly 14 times larger than the population of NZ, there will be 14 times as many businesses. Right?

But simply looking at the number of businesses in a country does not tell us much about the actual market size,

Let’s look at some figures to help broaden our understanding:

The United Kingdom ranked second for the number of new businesses registered in the European Union in 2007 with 7.4 businesses per 1,000 people.

New Zealand ranked first for the number of new businesses registered amongst high-income OECD countries in 2007 with 18 per 1,000 people

Australia ranked in the middle for new businesses registered with 4.4 per 1,000 people

The United States ranked last for new businesses registered amongst English speaking countries in 2005.

SOURCE: NationMaster.

And more recently:

In 2016 New Zealand was ranked 15th worldwide (out of 264 countries) with 14 businesses started per 1,000 people.  

SOURCE: The World Bank

But what do these statistics actually mean?

Great question! So far, these are just numbers and may seem confusing but with a little explanation, these numbers can tell us a lot.

To put it simply, these figures show in proportion to population, New Zealand has far MORE businesses than many other countries! Despite being small, as a country New Zealand is registering more new businesses than most, showing just how hungry and excited the market is to get trading.

Let’s break down what that means.

New Zealand has more business entities per capita compared to many other countries, which may make it seem like there are greater opportunities to do more business as every entity is another chance to sell an office chair, a computer, a phone, a service, lease premises etc.

However, the number of businesses started is likely to be calculated by counting how many companies have been registered in the country and certain scenarios can provide data that doesn’t accurately represent the market size. For example:

Step 1. A person buys a house as a rental and starts a company for taxation purposes.

Step 2. The same person buys another house and starts a new company for taxation purposes.

Step 3. Rinse and repeat.

Step 50. The same person buys another house and starts a new company for taxation purposes.

This person, or perhaps a team of people can only sit on so many office chairs, only need as many cars, only need one office or may even run these 50 enterprises from the comfort of their own home, meaning their 50 companies are not having the same impact on the New Zealand business market as initially apparent.

Of course, these companies still operate as businesses and require services such as accountants, lawyers, cleaning companies, and tradesmen.

This situation shows how there are right and wrong assessments of businesses’ target market, proving how the number of companies both does matter and does not at the same time. It shows how numbers can be used to suggest one thing but how numbers alone can struggle to capture the actual reality of situations. And the New Zealand business market is a complex situation that requires clarity.

Clarity all comes down to definitions.

How do you define an enterprise and how do you define a company that is an eligible prospect for your business?

Two decades ago, I stepped into the marketing space with a science and IT background.
From the very logical cold world of numbers into the emotional world of creativity.

And while I enjoy the creative side of things, I’m puzzled why numbers are not getting the appreciation they deserve. When the wrong numbers are used as a foundation of a business, when financial forecasts are nothing more than speculations that aren’t accurate of the market, then it’s easy to get things wrong. And no one wants to get things wrong when the New Zealand market is holding so much potential.

So, what’s the number one step to avoid bad situations?

The answer is simple. Being “in the know.” Or at least the beginning of the answer and the beginning of an exciting journey where you can be confident that your forecasting is rock solid.

After keeping an eye on NZ businesses for 20 years and spending 15 of them growing NZ’s largest list of researched, verified data, I feel it’s time to make sure that there are no mysterious figures used in financial forecasts, just clear, explained numbers. It’s time to make sure every business gets to know the real size of their market, the real size of their opportunity to enable them to make better financial decisions.

Author avatar

Post a comment

Your email address will not be published.

We use cookies to give you the best experience.