Controls and regulatory regimes have a positive effect on the efficiency and profitability of Small and Medium Enterprises (SMEs), an expert has said.
Massey University Centre for Small and Medium Enterprise Research Director
Professor David Deakins said the right attitude determined the outcome.
“SMEs of the same size, within the same industry sector, can have very different capabilities when it comes to managing regulation. One factor that is important is the owner’s attitude. If they are proactive about seeking advice, use sources of information like the Inland Revenue, and are prepared to invest in the right systems, then SMEs tend to deal with regulation quite well,” he said.
According to him, SMEs should join professional bodies and develop strong business networks.
“The research results were very clear that having key networks for obtaining advice is important. This could be Chambers of Commerce, local business associations, members’ associations, mentors, or in the case of the primary industries sector, cooperatives. SMEs struggle when they do not have these avenues of support,” he said.
Professor Deakins said that investment in up-to-date management systems was also important.
Online software packages, which can be easily updated as regulations change, can remove the burden of routine paperwork and improve capability, which is a different concept from compliance, he said.
“SMEs should be prepared to invest in such systems. It makes things like the change in GST easy to deal with and can assist with sustainability in situations like the Christchurch earthquakes.
“Any SMEs that used paper-based systems, or even their computer hard drives to store information, would have lost everything in the earthquakes, while those with online systems could continue to trade,” he said.
Professor Deakins will present the findings of the research conducted by his Centre to the delegates attending the International Council for Small Business World Conference in Wellington in June 2012.
Photo Caption: Professor David Deakins