New Zealand Is A Great Place To Start A Small Business
It’s true, New Zealand is a hugely enterprising country. With 475,000 small business owners across New Zealand the economy relies on them. MBIE figures show that 69% of all companies are self-employed workers and 97% are classed as a small business. Even though they are small they are powerful. 30% of all jobs in New Zealand are in companies with less than 20 staff. The importance of small business to the New Zealand economy cannot be underestimated either contributing 27% to GDP. Small business is the lifeblood of New Zealand.
There Are Drawbacks To Being A Small Business
Unfortunately half of the self-employed companies ‘born’ in 2010 had folded by 2014. To offer a comparison the number of companies failing with 1 to 49 employees over that time was 33% and 1 in 5 of those with over 50 staff. So why are small businesses folding? Some may be a bad idea, maybe a bad business plan or poorly executed strategy and sometimes it might be ‘bad luck’. The insurance firm Sovereign quote figures which show that 67% of those self-employed businesses go under due to accident or ill health, which I imagine is what most people call ‘bad luck’.
The good news is that much of that ‘bad luck’ can be insured against.
I Can Insure Myself?
For the small business owner and self-employed of New Zealand being unable to work will likely mean the end of the company. Even if the director can’t work there are possibly contracts or commitments that needs to be honoured. Financial and legal reasons makes reneging on a lease or failing to complete a job an undesirable option. Additionally the damage to a company’s reputation if business is not completed can be irreparable. It could just be that by the time the owner recovers it is too difficult to rebuild the client base.
Fortunately there are affordable comprehensive insurance policies out there that will allow a small business owner to meet bills, pay for a temp, and to honour contracts and leases until they can return to work in the business. If the business has to end because of the owner’s illness then insurances can make sure that all the financial obligations are met.
What If The Business Has Two Or More Directors?
Two mates set up in business together, they are both directors. One of the partners gets seriously ill, injured or dies and the family wants to be bought out, can the business afford to do that? It is essential in the case of a partnership to have a robust insurance policy that supports this eventuality. It is often the case that the family of a deceased or disabled business partner can’t or won’t have anything to do with the business, they would rather have the money.
Much like a private Life Insurance these policies can leave a business debt free if the worst happens to one of the directors.
What If The Director Doesn’t Work In The Business?
For some companies, where the director doesn’t work in the business, then there is generally a key person. Someone that is essential, immediately irreplaceable and the source of much of the revenue. If this person is not fit to work then it can have a catastrophic impact on a business. The cost and time to find a replacement, on-boarding them and getting them up to speed can cause cash flow problems. Even if it the absence is temporary. Insurance to cover these high performers output is a necessity for companies that want to plan for the long term.
Staff Insurance Packages
For the companies that aspire to be a top employer and care about the company culture there are group insurance policies for staff. The most common is Health Insurance, which offers policies for employers and employees that just aren’t available on the high street, at any price. Company Health Insurance has been shown to improve morale, reduce staff churn and decrease absences. Southern Cross show data showing that health insurance reduces absences by 2 days for every member of staff.
It’s not just health insurance packages that are available though, there are life and income protection offers for staff. A fully comprehensive package that can lift a company stature up in the employment marketplace. Making a desirable place to work, attracting and keeping the best staff. This is essential in a country the size of New Zealand, which has a small pool of skills in certain areas.
There Are Policies For All Company Sizes
No matter if a small business is just a self-employed person or a growing enterprise of 15 or more staff there are insurance policies that can protect the hard work that went into making the business a success. An independent insurance adviser will be able to help in putting the most appropriate policy in place and review the policy as the company evolves.