SMEs start as lifestyle Migrants sending millions home but goal turns to cash
People might start new businesses for lifestyle reasons but most business owners soon focus their efforts on the financial bottom line, suggests a survey.
Sluggish growth in the small business sector has been partly blamed on people putting work-life balance and family before business growth, with researchers suggesting small business owners are satisfying themselves with lower growth levels for lifestyle reasons.
The latest MYOB Business Monitor Survey of 1000 businesses appears to confirm that most people don’t start businesses primarily to make money.
But it also found that once a business was running, more than half of owners saw growth and making more money as their primary business goal.
When asked about their main reasons for starting a business, 41 per cent of start-up owners (defined as people in business for two years or less) said they went into business to ‘‘control their own destiny’’, while others listed factors such as doing something they felt passionate about or having greater time flexibility as being important.
Fewer than one in five said they started their business primarily to make more money.
MYOB’s James Scollay said the results highlighted the fact that most SME owners did not start out with financial success as their main motivator but instead were more interested in loving their work and taking control of their careers.
This might affect how they measured success, he said, for example, business owners might measure success by non-financial factors such as having more time with family or travelling.
The survey indicated that once businesses were started, finances became a big focus.
Most business owners surveyed (53 per cent) said growing their business and making more money was a primary goal. New Zealand migrants, using a Wellington-based remittance company, are sending millions of dollars ‘‘home’’ each month.
Orbit Remit chief executive Robbie Sampson said about $25 million was transferred each month. ‘‘Seeing how much is being sent overseas, I wonder how people can survive here.’’
The global online money transfer business has 80,000 customers, who send money ‘‘home’’ in 25 currencies. It processes about 30,000 transactions each month.
About $600 billion is expected to be transferred in the global remittance market during 2015, Sampson said.
The New Zealand-owned business initially used the Philippines as a proof of concept, test market when it started operating in 2009. It turned out to be a significant channel for money transfer. Along with India, Bangladesh, and Sri Lanka, it is one of the biggest markets for international remittances.
We see a clear trend in the number of transactions when school starts. Payments, particularly to India, increase,’’ he said.
Australia was also a large market for business and when parity was close, there was a huge jump in the number of payments made to Australia.
The business, which was slow to get off the ground, has grown aggressively in the past three years, he said.
The number of transactions for this quarter was up 160 per cent and the number of customers up 140 per cent.
Orbit Remit had a strong relationship with the New Zea- land Government and was the first non-bank to provide payment services to the Inland Revenue Department. In April, $100m was paid to Inland Revenue in 250,000 transactions.
About 56,000 support questions on government payments were answered by its Wellington staff last month.
‘‘We knew it was an issue for New Zealanders overseas to make student loan repayments. It took a while to happen but now we provide the service with no fees and also provide a service for other debt or tax settlements.’’