Technology is helping New Zealand’s small businesses focus on the important stuff and freeing up their valuable time, while dealing with the challenges and opportunities of a pandemic.

As a nation of five million, we love to hold up our shiny success stories of Kiwi businesses that have made it big on the world stage. Whether it’s a sustainable shoe brand that uses materials sourced from trees and wool, like Allbirds, or a company that shoots rockets into space from the Mahia Peninsula like Rocket Lab, you can bet a Kiwi somewhere is boasting about them.

And yet, the unsung heroes are the small businesses that are the driving force behind New Zealand’s economy. They account for up to 97% of all businesses, contribute 26% to our GDP, and create over 100,000 jobs annually.  

“If you just look at two of those aspects, which is contribution to GDP and employment, they are the lifeblood of every economy and absolutely critical to our success. But yet, they have been one of the most vulnerable segments during the pandemic,” says Chavi Jafa, Visa’s vice president and head of business solutions for Asia Pacific. 

With fewer resources at their disposal in a crisis, and founders who often juggle many roles, the challenges posed by Covid-19 have been incredibly tough on small businesses.

A global survey by Visa found that in response to the pandemic, more than two-thirds of SMEs (67%) had tried a new digital approach – from launching an e-commerce site or changing point-of-sale technology – to keep their business on track.

 “A lot of small businesses were already on their digital journey, but they were moving organically,” Jafa says. “During the pandemic, the acceleration around that has been significant. You had offline businesses that were going partly or completely online. 

 “So, what does that mean for a small business? When they think about innovating, it means that they need to adopt new technologies and make processes efficient online. In a lot of markets, many processes were still offline.”

She says it’s not just about bringing the online shopfront of businesses up to speed digitally, either. Behind-the-scenes, critical tasks like accounting, invoicing, payroll and more that are done manually can be laborious and time-consuming for small business owners who often wear many hats.

Jafa knows a thing or two about these pain points. Prior to working at Visa, she used to co-own and run a busy restaurant. In her time there, she says she learnt first-hand how revolutionary technology can be for owner operators when it comes to expense management, managing credit and cash flow and streamlining time-consuming back-end processes.

“That experience has led me to think about solutions for small businesses in my role now, because each of those aspects we can improve on with digitisation,” she says. 

Getting the skinny

One small business that has navigated this period of change through 2020 impressively is Skinnies, a sunscreen brand founded by husband and wife duo Olly and Martha Van Arts. Inspired by New Zealand’s strong UV rays and people’s general dislike of thick and greasy white sunscreen, the pair set out to make a better alternative for themselves and their kids.

They created a world first in their clear waterless sunscreen, which forms a thin invisible layer on top of the skin and absorbs the UV rays. Alongside selling their products in New Zealand, they also sell to the United Kingdom, Europe, USA and Singapore.

However, the pandemic meant that international sales slowed or halted altogether as a result of supply chain challenges and lockdown restrictions.

Before Covid-19, Skinnies was using Xero to do its accounting in New Zealand while running manual spreadsheets for sales, customer data and basic inventory counts in its international markets. The latter had to change, fast, to save time and have better cost control through this challenging period. 

“What was interesting to us was that we thought we had a digital footprint prior to Covid-19, but quickly realised this was not operating at a smart level in terms of the front-to-back end of the business,” she says. “A massive change for us was dealing with the shift in increased transactions from online growth. It wasn’t about 10 larger retail transactions per month anymore – it changed to 100 a day, but smaller transactions.”

 Skinnies rolled out Xero in their international markets to save time, improve accuracy and keep results and sales data in real time and started using Capsule, a customer relationship management software that shows the status of contact cycles with customers. 

 After taking steps to become a more digitised business behind-the-scenes, Martha Van Arts says daily online sales globally have increased by around 40 percent. Skinnies’ experience shows how valuable it can be for small businesses to use technology to free up time from the administration side.  

 “It’s really shown us the global marketplace has no boundaries, online opens this right up,” Olly Van Arts says. “As a small business with a niche product, we’re expanding into markets digitally that we just couldn’t afford or have the resources to do on the ground. Online allows us to reach more consumers, target a segment, share our story, build e-commerce and have multiple sales channels all operating from our Auckland base.”

Looking after the little guys 

While digital platforms for back-end processes like accounting were once reserved for big businesses with the money to afford such resources, technology has come a long way in helping the smaller players. New Zealand fintech companies such as Xero and Hnry are rising to the challenges created by Covid-19 and helping the small businesses that form the backbone of our economy with their digitisation. 

Hnry is a digital accounting service for sole traders, contractors and freelancers that takes care of all their tax calculations, payments and filings for them, whilst also providing accounting software for invoicing, expense management and finance tracking.

Co-founder James Fuller says they have people from a variety of industries using the platform, from beekeepers and marine engineers to people running e-commerce stores. He says the idea for it came when he and co-founder Claire Fuller were self-employed and saw first-hand how much financial admin was required.

“For years, the accounting industry has largely under-served the self-employed, due to them being ‘high volume, low value’,” Fuller says. “We therefore end up in a situation where individuals don’t have any option but to use overly complex digital tools, coupled with expensive traditional accounting services that don’t really want to help support them.”

He says the disadvantage these people face is with all the learning that’s required to remain compliant, there’s little time or energy to focus on their actual work. 

 “The vast majority of independent earners aren’t trying to grow a huge enterprise, they just want to earn a living. All of that compliance and hassle takes them away from their clients, their family, and their ability to earn,” Fuller says. 

 The growth of Hnry users has been steady since it was founded in 2018, but between April and June, New Zealand’s lockdown period, Fuller says the number of people joining was 260 percent higher than the same time last year.

“With so many people forced into redundancy, and so many others having their income in jeopardy, it’s no surprise that people looked to use every opportunity to keep the income coming in.”

During this time, Hnry also proved to be very useful for helping self-employed people access the wage subsidy. This is because unlike traditional bookwork, Hnry’s digital platform could instantly produce a report showing an impact to someone’s revenue over time – the proof that was required to be granted the wage subsidy.

Fuller says he’s been inspired by the fast adoption of online platforms by contractors and sole traders over this challenging time. 

“We’ve heard some amazing examples of personal trainers delivering their group classes over Zoom, psychiatrists seeing their clients online rather than in-person, and graphic designers using online platforms to sell digital copies of their work across the globe. This country has amazing resilience, and it was fantastic to see the creative and interesting ways that Kiwis ensured they could keep that income coming in.”

From the front to the back

 Visa has several ways to help small businesses digitise their back-end processes, including a tool called Visa Business Reporting. Here, businesses can track card payments in an easy-to-understand format and see where they’re spending their money while adding receipts and notes to a place where it’s all digitally stored in one place.

Jafa says the data small businesses can get from centralising their back-end all in one place online is incredibly insightful, versus having it spread out across different mediums. 

“That helps business owners to make better decisions in everything from inventory management to how they manage their cash flow.”

Another tool that enables control for small business owners is Visa’s card control capability that allows business owners to set spending limits on commercial cards and receive notifications when purchases are made.

 “One of the things we’ve realised with a small business owner is that they’re typically growing businesses and they wear multiple hats, so they want full control over their expenses – and rightly so,” Jafa says.

A key benefit of using a business credit card is improving cashflow, as businesses can extend their days payable outstanding and optimise working capital, taking advantage of up to 55 days interest-free.

There’s still more digital learning to be done for many small businesses, but the changes we’ve seen happen this year from the pandemic have helped usher in a new era of digital innovation, alongside new opportunities and challenges. 

One innovation that Visa is working on is an app that gives employees the convenience of using on-demand virtual cards to make purchases online and in-store via their digital wallet. Employers can set time and spend limits on the virtual cards, helping them to better manage and track expenses, and reduce the reliance on physical cards.

For those starting their journey of front-to-back digitisation, the tools Visa offers like business credit cards and fintech platforms like Xero and Hnry are helping small businesses like Skinnies refocus their time and energy on the important stuff: their customers.  

“I always say every minute that a business owner spends on a back-end process is a minute taken away from going out and bringing in a new customer,” Jafa says. 

“A lot of the focus of these tools and services is to help our small businesses and in turn, our communities. After all, they’re the cornerstone of every economy.”

Are you a New Zealand fintech that is ready to take that next step? Do you have a solution that enables small businesses to thrive? Visa is calling for startups to apply for its Asia Pacific Accelerator Programme. To find out more, click here.

In which James Borrowdale visits Sylvia Park, meets Santa Claus, and decides that Christmas might not be so bad after all.

I should admit, at the outset of this piece, that, as an adult, I have always been largely agnostic to the Christmas spirit – that intangible embodiment of a season that, to this mind, has always been something to get through, after which the holiday (and the Boxing Day test match) begins, and not in and of itself the year’s crowning jewel. 

But this year has been unlike any of those that have heralded my previous 35 Christmases: Covid-19, obviously, and then, five or so days into the lockdown it spawned, the arrival of our first child, a daughter. So when the opportunity to write this piece arrived in my inbox, it felt like a rare opportunity for the interests of an eight-month-old and her stay-at-home dad to combine. She would, for the first time in her little life, meet Santa, on duty at Auckland’s Sylvia Park Shopping Centre; I would emerge, momentarily, from my journalistic sabbatical to dip my toes into The Spinoff’s festive waters.

I met Jo Allen, Sylvia Park’s marketing manager, in an office nestled away deep within the centre. I wheeled my daughter into a glass-panelled room, placed my dictaphone on the table, baby on my knee, and asked Allen about the challenges of the year, of lockdown, and the relief that at least 2020 could end with something as joyous as children sitting on Santa’s lap in the midst of a bout of Christmas shopping. She spoke above my cooing daughter, occasionally breaking our chat to respond to the prelingual conversation emanating from my lap. “You can see the delight on the children’s faces, you can see the relief on the parents’ faces – that something they have been used to was actually on, where everything else in their lives, this year, was not.”

Santa has been in residence at Sylvia Park since the 17th of November, when he arrived, with much festive fanfare, by ceremoniously descending the escalator to take his seat on his big red throne – thankfully, unlike that other elderly man who has regrettably redefined the escalator descent for the modern age, arriving to bring happiness to the world. The extent of that happiness, in the year of Covid, then became clear, Allen said. “As soon as Santa arrived he was rushed by screaming children. It was like, ‘OK, whoa, we weren’t quite expecting that.’”

After all the stress and difficulty of 2020, Allen said that the impact of Santa’s arrival added a little magic to the centre. “It was just that ‘Hi Santa!’ that came through from the children so many times, and their joy. I spend a bit of time down on the set, and the happiness they get is the best part. And they get the photo, just to have that little bit of joy at the end of their year.” 

Of course, there have been some precautionary allocations made – customers, rather than sitting on Santa’s lap, can, if they feel more comfortable, sit on a stool beside him. There is a booking system, so families don’t have to stand in a tight-packed queue; a text message will alert you when it is time to make your way back to Santa’s Forest. But key to the experience—and, in Level 1, with the freedom to do so – is making the experience familiar. Other centres, Allen said, had decided as a Covid precaution against letting kids sit directly on Santa’s knee. Here that decision rests in the hands of the families. “Once again, that’s the normality of years gone by, where they feel, ‘Phew, something hasn’t changed this year.’ It’s kinda nice.”

And, with that, it was time for our own Santa experience. We strolled past the shops, catching, fleetingly, a faint rumour of the Christmas jingles of each, until a bushel of green, surrounded on one side by a semicircle of prams pointed at an animatronic Rudolph, signified that we’d reached our destination. 

My daughter is of an age, and of a current disposition, that gave me few reasons to believe this would end in anything in tears. But this Santa – one of the five men who don the suit, working four hours at a time – was a consummate professional. Sensing her wavering on the edge of tears, I was directed to have her face me and back her on to the wide thigh in the shadow of the beard; in this way, in the photo I have in front of me as I write, her face is animated by an expression that splits the difference between smile and frown, instead of the meltdown that momentarily threatened. She eagerly accepted her gift, a copy of Lynley Dodd’s Slinky Malinki’s Christmas Crackers, by immediately christening it in her mouth. 

“What do you do for a living when you aren’t Santa-ing?” I asked. I had assumed, at this point, that I was chatting to the man behind the beard, after my daughter had had her photo taken with the character he was playing. But something about the seriousness with which Allen had earlier pointed out the room where the Santas prepare for their shifts – its windows papered over with Christmas wrapping paper so as to eliminate the chance of any child ever seeing two costumed Santas – should’ve prepared me for the fact he wouldn’t be breaking character. My assumption, I quickly found out, had been wrong. “Well, I start off by assembling a team of helpers, you see,” he began in a voice I can only describe as ‘Father Christmasy’. “And once I’ve got a team of helpers together we start building the toys.” 

I, like any mid-career journalist, have interviewed my share of dissembling politicians, convicted killers, drug dealers, dreary sportspeople; that is to say, I consider myself endowed with the requisite level of cynicism.  But it seemed I was instantly disarmed. “You know, we’ve been in our hideouts a long time, and all over the world there have been rules and regulations we have had to abide by, but now everyone wants to receive a bit of love, and receive a good message. And that’s what I do as Santa, is just spread the word of happiness.” I found myself ending the conversation—out of earshot of any other human capable of understanding it – by promising to leave a big glass of milk and three chocolate-chip cookies under the tree for this man’s Christmas Eve sustenance. 

Parenthood, in essence, is the relegation of one’s own interests below those of your child’s. And this, perhaps, was the first slackening of my Christmas agnosticism in the service of my daughter, whose own love for the Christmas season will surely grow as her burgeoning mind eventually allows each of them to accrue in her memory. In this year of contagion, I had caught something from the cooing bundle in my lap – how else am I to explain the silliness of my sustained make-believe conversation with this man? In any case, that afternoon I felt compelled to wrap the presents I had picked up after my conversation with Santa, making my first deposits of the season to the pile that had bloomed under the potted pōhutukawa serving as our Christmas tree. Perhaps, I thought, I am being born again.