Chapter 1: What is the significance of New Zealand's business growth ranking?
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If you want something, if you have a passion in your heart, fire in your belly, it's going to be you. It's going to be you getting up early. It's going to be you staying up late. It's going to be you running the miles and going to the gym and eating the kale and doing all the crap. It's only going to be you because outside motivation can only last for so long.
You can hire the greatest trainer in the world. You can have the greatest cheerleader. I could have you run beside me and yell out inspirational sayings. But ultimately, it's on me.
Welcome back. You are listening to another episode of KeepTheChange.co.nz's Money Mail. Just a quick reminder there, it is going to have to be you. Okay, we can fill ourselves with all of the self-help books and the podcasts and read the latest book tutorials. Tune into the latest audio book. Find the new person to follow. But at some stage, you will have to take the leap.
You will have to take the action. You will have to do the thing. I was talking about this recently on Instagram because I'm getting approached probably two to three times a week at the moment with people that are showing me the AI thing that they've built. And I get it. They are hoping that maybe I'll like it and maybe I'll tell other people and I can do that piece of the thing for them.
And that is the hard bit. Show everybody that this exists so that I don't have to do that bit. Now you could argue that that's smart, however a lot of these things that people are building, other people are building the exact same things.
So it's not really up to me to determine is this cool and am I going to tell everyone about it for you, you instead need to go to the market just like when I started my accounting practice, I have to go find the clients, I have to do the thing, I've got to get it done. It's a trap that we all fall in, I've started the company, I've got the logo, I've got the branding,
I've got the new AI software. Yeah, but do you have what you really need? And it may be clients, it may be doing the essay, it might be completing the assignment. We've got to finish the project in front of us. Sometimes that can be easier said than done because it's so easy for us to get distracted in this day and age.
Everybody can be a content creator with AI, your content's all going to look the same, but are you actually going to stay consistent and do the thing? You know, this plays out everywhere. So AI, I think, is just the latest example of it seemingly popping off, especially in my DMs and my emails as well. Anyway, before we get lost down that tangent, we've got a bit of a serious one to go through.
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Chapter 2: How does age impact business leadership in New Zealand?
And it will have different impacts. And these are the sorts of things, for some reason, that sort of interest me. And I like to go down rabbit holes and think, what could that mean? And given my strengths of being strategic, futuristic, and looking at these types of things, I'm normally really, really bloody early.
And so then when these things start happening, I'm like, that's not really that surprising. But interestingly, I am actually being inquired with more about, hey, do you speak about succession? Do you have a keynote on that? Things that people need to be thinking about. So industry bodies will be thinking about this more as well. And it's something that we probably don't,
It's not easy to talk about these things. Now, similarly, a conversation recently where a lady was telling me about how she was having to transition her parents into care. And her advice was, you need a plan for this stuff and you need to be talking to your families about it because it's just, again, scary to talk about and we don't really do that.
And then it comes and we've got to explore and learn all about it. So where I can, I'll try and do more content in that space so that we can all get a better understanding of it or those of us who are choosing to learn. And there has been some content on the channels before, whether it be mostly the legal side of succession and even going into care.
Now the business side of it is confronting as well because we have an aging demographic of business owners. Now before we get into the succession side of it,
I think what we all want to understand, much as we often are understanding that, okay, if baby boomers have more wealth and they have it tied up in property and therefore care about those things and also have term deposits, for instance, but are going to spend money to protect their assets, that's a great potential customer or client for people.
Interestingly, I saw some research this week encouraging car sales to think about that demographic. It was titled Older Customers Could Be Key to New Car Market Success by Matthew Hansen. It has been a tumultuous period for new vehicle sales in New Zealand, et cetera, et cetera.
Nielsen's latest Consumer Media Insights CMI report shone a light on New Zealand's population of people ages 65 years and older. It notes that this group is growing in size and is financially active, branded with a travel focus for many still part of the workforce.
The over 65 audience is often underestimated, but the data shows that this is a growing group with real purchasing power, strong values, and in many cases, an ongoing role in the workforce. That's through the research. If a brand's market isn't even employers, there's a major opportunity. Understanding the audience properly rather than relying on old assumptions.
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Chapter 3: What are the challenges of succession planning for aging business owners?
And I'd imagine that there's probably some structure to that. You can't just interview 15 people and say, hey, my data is representative of the country. But they would have a methodology to try and get this accurate. But Regardless of that, the data is quite similar to the year before and we're not doing very well compared to the other Asia Pacific countries that are aroused.
Now the next one is only 5% plan to innovate in 2026 versus 29% across the region. So 29% of people across the region filling out that survey are thinking, yeah, we're going to innovate in some way. In New Zealand, only 1 in 20 people, 5%. Now, get this, in New Zealand, our top tech investment is, have a think about, if you're a small business owner, and what is a small business owner?
We're probably less than 20 staff. Now, what are you saying is your top tech investment? Have a think. Well, in New Zealand, it's computer equipment. In the Asia Pacific region, it's AI, artificial intelligence. So that's what they are investing into. And what are we being told? Well, AI is going to change the world. It's going to make everything more productive, more profitable, faster.
We've got a productivity issue in New Zealand. What are we investing into? iPhones, computer equipment, thinking it's a major tech investment. And in Asia Pacific, those countries are leaning towards AI and upgrading their business models. So again, it just probably shows you where our heads are at compared to some other countries.
Now on this, only 26% in New Zealand say tech investment improved profitability, which again is the lowest in the region. Now if you didn't think something was going to improve your profitability, your productivity, are you going to invest into it? Probably not. And only 26% say that tech investment improved productivity.
But basically if you then hear the likes of Xero, they will say that more digitally equipped businesses become more productive and profitable and we're lagging behind. So the belief isn't there to invest into technology, so then we don't seem to do that compared to the other countries and we end up at the bottom of the pile. Quite crazy, right?
Especially again, I'm a proud Kiwi person and I want us to be at the top of heaps of these bloody stats. We aren't. And I can't hide from that. I can't sit here and try and make heaps of excuses of why that could be. I'm just intrigued going, really? Like, okay, what is going on here? Now, we could blame the economy and say it's been hard, but the data goes a lot deeper than that.
And I think this is where the age piece comes in. And I'll explain that in a second. My opinion on that and where that may be coming from, but first the data, so it's not just me, 68% of New Zealand business owners are over 50. 68%. Now that's 68% of those 309-ish, I think it is, that were surveyed. Okay, but then they extrapolate this out.
But this is pretty consistent data from a prior year as well. Well, what's the Asia Pacific average? 30%. So 68% of our business owners are over 50. Asia Pacific is 30%. Now, get this, just 12% are under 40%. again, the lowest in the region. The Asia Pacific average is around 38%.
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Chapter 4: Why is technology adoption crucial for New Zealand's economic growth?
I don't know if it's an economic problem as such. I think it's an economic problem created by a risk appetite problem. And again, this isn't a beat up on the oldies saying, well, they are struggling to grow and the younger people are just better at business. I think this is where we've got to be thinking about succession, innovation and economic resilience.
And we've got to be realistic about what the data is telling us. And if I then try and go, well, what is that? It kind of makes sense, right? If you're older, you're probably less likely to pursue growth, right? And this is what the data says. Least likely to pursue growth, adopt technology, innovate, export, add payment gateways.
Well, why would you be risk on when you don't really, like you're at the end of your career, you're probably going, well, I don't really want to. And I think Mikey unpacked this on a podcast recently and probably went to the nth degree where he was talking about, was it Mikey? I'm pretty sure it was Mikey.
You know, okay, you get the house, then you get the batch, then you got the beamer, and you got all that, you get all that. Not that everybody could do it, but... If there had been tried and true paths to do that and it didn't rely on business, well then... why, you know, why would you be pushing hard? It was interesting.
We, Mike and I went to the conference over in America, you know, we're talking to this guy and he was really intrigued by what we were doing. And we were thinking, well, we know quite a bit more about like accounting technology and stuff on my account as you'd expect. So, and then this guy, but you know, he had a massive business and we're sort of saying, what, like, what are you doing here?
Like you're a lot older. And he's like, well, you know, I can't just sit around at home all day. So I'm now just playing a different version of business. And you know, sell it down or be the chairman rather than the CEO. And he was viewing it from a different lens.
So I don't know how America's data compares to ours, but I think for a lot of people who have run a business, they get it working well. And hey, this is also, I'll come to some data that probably backs up why, or maybe it's completely fine for them to do that. But why are you then going to be taking more risk as you get further towards the end of your life?
It's a bit like investing as well, right? Like we know the advice generically to younger people is expose yourself to as much risk as possible because you've got heaps of time of compounding so things will work themselves out even if you have some ups and downs.
It's kind of the same thing where then you start saying to them as they get older, oh, well, you don't want to be taking too much risk if you want to buy a property. So don't expose your investments to too much risk or same if you're going to be retiring and needing or needing that money at any stage, like go risk off.
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Chapter 5: How do younger business owners contribute to innovation?
We're learning more about investing through KiwiSaver. We're getting more into financial assets. We're getting exposed to that at a younger age. Employers are now matching employee contributions in KiwiSaver from 16. There's a lot of snowball in the other direction of financial assets, whereas
you know you just take yourself back 10 years ago we could be careful with that shit you know that's risky yeah shares are real risky but the wealthier households have more financial assets i.e shares so things are slowly changing but what if we like doing safety property turn deposits now what's probably an ultimate risk for people running a business
So that's kind of my thesis of where maybe some of this risk averse stuff comes from. Why would you take a whole heap of risk when you don't really need to? And as you get older, are you going to be taking that risk? Probably less so. If you're younger, probably more so. And therefore, 71% of the people are reporting growth for businesses led by people under 40.
Over 60s, we drop right down to 25%. But what's the problem? Well, the problem is that we have a lot of business owners over the age of 60 and 50. So then where's that growth of the entire economy going to come from if we're relying on growth from those SME companies? Now, remember, there are also...
plenty of people employed and in businesses that aren't SME and that have way more than 20 staff and are a lot bigger, but there are a lot smaller number of those organisations. So this SME part that we're talking about is just a corner of the economy. So it's not like it's the entire thing, but it is something that
contributes a lot to GDP and a lot of people set about having a crack at and we probably want to foster more of that entrepreneurial spirit and one of the recommendations from this study each year is normally encourage younger New Zealanders to start a business or acquire an existing one.
I've seen, and I'm hoping to get someone on the podcast at some stage once they are ready to, they've brought businesses from these demographics and they are younger and they're going in, they're growing them, they're hungry, they're risk on and they're making them more profitable and they're enjoying it. And I want them to tell the story from that side of like, okay,
This is what the data says and what Luke's banging on about, but this is practically what I went out and did. And the organisation CPA Australia sitting in the middle of this is saying, like, we need to encourage younger New Zealanders to start or acquire an existing one. And lift technology adoption through bundled digital support programmes. So actually putting more technology...
into these businesses. So it's fascinating. And this is, I mean, you probably tell, not that fired up about it, I bloody live and breathe this space. So it's something that I think about
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Chapter 6: What are the implications of an aging population on the economy?
Let's just let them figure it out for themselves. And maybe it should be up to us, the business owners that are older, to figure these things out. And the politicians, et cetera, should stay out of the way. But we can probably see that this, I think, is a headwind that's contributing to the slow down of the economy. However, there's obviously opportunity in this too.
Could this be one of the biggest opportunities in New Zealand right now? There are thousands of stable, profitable, and under-optimized businesses owned by people nearing retirement. We have a new generation that understands digital. They move faster. They often think globally as well.
And as I said before, one of the survey's recommendations is to encourage younger New Zealanders to start a business or acquire an existing one. Why are they saying that?
Well, they're probably saying, well, the data tells us that younger business owners are more likely to grow them, but they're going to introduce technology and information and payment gateways and speed up velocity of money and all these sorts of things that... the big tech companies would like to see happening in an economy and suggest that the data tells us improves it.
One of the things that I think, because of the bubble that I sort of live in, I can see a small spark of entrepreneur spirit in younger New Zealanders. And I think they are going, you know, the traditional path of even uni and,
house rental property is that it you know there is a bit more of a okay maybe I'll explore something else and I think that's great to see and I do think we'll have a big swing where that 12%
of under 40s, like it'll be a lot higher and it will continue to grow as that survey reaches different people because I just think that younger people are coming through with a bit more of that entrepreneur spirit. However, again, I bubble myself, so maybe not. Anyway, this issue, it's not like it's just going to be play out overnight or it's going to be solved quickly.
It's going to take a long time to play out, including succession, including the wealth transfer, but some questions to ponder to finish up. And think about, this is what this gets me thinking about, as older business owners retire or scale back, who will take them over? Can Kiwis leveraged in housing afford to buy slash take them over?
And is that why we have such few business owners under the age of 40? Well, they can't afford to buy them because how are they going to finance them and pay for them? I've got to start them from scratch. That's hard. We know that starting something from scratch is hard, but it still can be done.
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Chapter 7: How can we encourage younger generations to become business owners?
Generate Kiwi Saver scheme has sponsored Keep the Change to help me reach more people and make this a reality. Cheers to Generate. Head to generatekiwisaver.co.nz forward slash change to find out more.