Recession & redundancies represent new opportunities for business entrepreneurs

by Grant Hewson
General Manager, Accomplish Ltd
29 January 2009

With the Government forecasting up to 70,000 New Zealanders being made redundant in the next 15 months, chances are that quite a number of those people will take the opportunity to become self-employed and establish their own businesses.

It's surprising but true that in any economic downturn there are always new opportunities opening up for people able to provide more competitive, more personal or more innovative products and services.

Almost every business today is looking for new ways to do things better, faster or cheaper, as part of improving their own efficiency, productivity and profitability.

So while many companies are downsizing, or even closing up shop, their loss provides an opportunity for others to expand their market share and/or for new operators to enter the market, often bringing with them an extra competitive edge.

During recent months in Auckland we have already seen some large real estate companies closing or merging branches.  But at the same time several agents have decided to start out on their own, hanging out their own shingle in a bid to control their destiny in what is obviously a tough real estate market at present.

In past recessions, there has always been a proportion of people who have used their redundancy cheques as start-up capital for new enterprises, and there is no doubt that pattern will be repeated over the next year or so.

Here at Accomplish we have almost 20 years' experience in working alongside many new business start-ups, and we well know the problems and pitfalls they can face.   In fact, our website has a section devoted to practical advice on starting and successfully running a small to medium business enterprise, (Article Library) as well as providing links to other useful resources such as the Government's business portal, to which we contributed material.

While our business is providing accounting software designed specifically for the needs of New Zealand's small to medium business enterprises, we pride ourselves on going that step further and building an on-going, almost personal relationship with many of our 20,000 business clients around New Zealand and Australia. 

Based on that experience, we can say that starting up a business can be easy. But ensuring its success is a lot harder.   One of the keys to that success is good financial management, which depends on choosing an accounting package that is not only right for your needs, but which is able to give you accurate financial information and management reports at the push of a button at any time.

It needs to make it easy to prepare and revise budgets and forecasts,  to provide up to date profit and loss reports,  to keep track of all revenue and all costs, to reconcile bank statements,  to handle quotes and invoices if necessary, and to keep track of debtors and - most importantly in these economic times - to help you manage cash flow. 

Having accurate, reliable reports of this nature are vital to help you to keep on top of your business finances, and to help you make better, fully informed business decisions and thus improve the overall performance and success of your venture.   

That accounting software needs to be powerful, robust and reliable and, most importantly, if you have little accounting or IT experience, it also needs to be simple for even a layman to use.  Hence it needs to be as user-friendly as possible and trouble free, backed up by good local support services just in case you need help, advice or training.      

Your accountant or business adviser can probably advise you on an accounting package that best suits your particular business needs and your own capabilities.  But do ensure you choose a simple, easy-to-use package that will save you and your accountant time, money and headaches in meeting everyday business needs as well as complying with requirements like GST, year end accounts and taxation. 
  
Finally, if anyone is planning to start a new business, I strongly recommend that you discuss your plans with your accountant, bank manager or other adviser, as well as with appropriate business contacts, colleagues, family and friends.  Their input can be useful in helping to launch your new enterprise, and in helping to ensure it can successfully ride the waves of economic challenges in future.