Geoff Ross on building New Zealand SMEs and 'selling your business baby'
New Zealand has come a long way given its SME environment but the sector still remains in its infancy, says Moa Brewery’s Geoff Ross. Now, an initiative to share successful entrepreneurs’ secrets plans to build small businesses faster.
Four of New Zealand’s most successful entrepreneurs are teaming up to teach Kiwi business owners across the country what they know.
Chef, restaurateur and author Al Brown, fashion designer Kate Sylvester, Moa Brewing chief executive and Trilogy Group chairman Geoff Ross and ex-cricketer and Triumph & Disaster founder Dion Nash, will front the project and travel to meet small business owners in their home towns, offering one on one, personalised mentoring sessions.
Geoff Ross spoke to the NBR ONLINE about the skills and lessons he brings to the sessions.
“SME has changed in a huge way. It’s still not easy to get capital for SMEs but it has become more doable. There are many more sources of capital for businesses these days, albeit limited.
“New Zealand start-ups also have a lot of successful businesses they can learn from that certainly didn’t exist in 1996, when I was starting out, and barely existed in 2006 really,” he says.
New Zealand registers 97% of its businesses as "small," the 2degrees initiative aims to better equip Kiwi enterprises for profitable and sustained success. Currently, only 50% of small New Zealand companies remain in business after 10 years.
“The period I draw from,” says Mr Ross, “is from when I started 42 Below. I learned a lot between 1996 and 2002, challenges that were completely foreign to me at the time.
“Things like business planning, funding, required skills and trying to balance having a start up, a mortgage and a young family,” he says.
In 2002 he went fulltime on 42 Below and secured some investors in which was a “bloody nerve-wracking experience selling half your baby to someone you didn’t really know.”
“But it gave me extra capital, extra skill and the opportunity to focus 100% on the business.”
The Moa Brewing head started life in advertising. He had various entrepreneurial endeavours since a child and through high school, from skinning possums to catching eels.
“I didn’t leave university wanting to own businesses, it’s evolved since then. The more you learn, the more you realise where your opportunities and strengths are,” he tells NBR.
“The start-up business world is really only in its infancy in New Zealand, compared to Silicon Valley or San Francisco. But at least we have a sector now where entrepreneurial people can start businesses and get support and capital. But all of that’s very recent I reckon. It’s only in thepast six or seven years.”
The mentoring project will see eight lucky businesses win a workshop during September with their chosen mentor, where they will hear first-hand the entrepreneur’s personal stories and lessons from their journey to business success.
“Having been a small business owner myself, I’m excited to share my experience with other Kiwis who are trying to make their mark. There’s a lot to learn when trying to balance where you want to take a business creatively and the realities of making sure you’re running a profitable and successful enterprise,” says 2degrees mentor Kate Sylvester.
Mr Ross has a few pieces of advice for SME start-ups:
“Don’t be precious about getting people capital involved. I did this myself. I tried to be involved in everything in the early days. But you have to realise that other people have strengths in areas you don’t.”
All businesses invariably need growth capital, so he encourages thinking about this early. Typically this starts with your own money. And they shouldn't worry about letting go of some equity in their business to let it grow.
“I’d never invest in a company that a person hadn’t put a considerable amount of their own money in first. It would be pretty hard to convince me to put my money in when they hadn’t.
“You can’t half-jump a ditch. Dabbling in the business while you do a day job isn’t going to work.
“Another risk is not really understanding your customer. People tend to get incredibly passionate about their product or their idea and charge into it fuelled by all that passion, which is great. But going and speak to the person who you think is going to buy your product? We’re not too good at that,” Mr Ross says.
Entries are now open for small businesses to take part in Building Smarter Business. For more information and a chance to win a mentoring session thanks to 2degrees, head to 2degreesmobile.co.nz/mentors.