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Christopher Luxon announced an admirable goal of doubling New Zealand’s exports within 10 years. This is something which simply must occur in order to make us a wealthy nation again, but the lack of enthusiasm for the policy shows the ‘New Zealand Disease’ is at the ‘luetic’ stage.
Mike Hosking was speaking with somebody from Business NZ who apparently had no idea what exporting involves. In short they felt it was a bit much like hard work. And therein lies the problem. What these people fail to understand is it is all a matter of perspective. What the ‘experts’ (who have never run a business, let alone an export one) do, is try to think of creating another Fonterra or two: large corporates who can scattergun their way around the world. If they cannot immediately think of something, they dismiss the idea out of hand.
I’ll explain things based on my own experience. Instead of the scattergun approach, you need to try and visualise how large the world actually is and how small New Zealand’s population is in relation to that. You then do what we did, which was to specialise – really, really specialise.
As a businessman you are seeking to increase your sales and profits, not save the entire country. It is not about creating Fonterra Mark II, but making yourself a fortune. So do what we did in 1998: pick a market in another country of a similar size to New Zealand – but more affluent – and focus only on that. In our case we chose Sydney, due to it having a similar population to New Zealand, being a short(ish) plane ride away and being culturally similar.
Another attraction was, instead of the utterly bewilderingly activity of paying freight costs to send a few boxes of things from Auckland to Timaru, Gisborne or Invercargill, you can send 10 container loads to Sydney and distribute them cheaply within a small geographical area. Blaxland to Bondi is only as a far as the Sky Tower to Huntly power station and Campbelltown to Glenorie a similar distance. Our freight cost suddenly dropped from 12 per cent to about two per cent overnight.
So we’ve just focused on growing sales and profits within Sydney town for those 25 years. Nobody has ever heard of us in Melbourne or Perth. Compiling a list of 50 cities around the world and doing a ‘rinse and repeat’ would be foolish: all we’d end up doing – at best – would be to increase sales, but our profit margins would fall dramatically.
My advice to any businessman is, first of all, to export. New Zealand is small potatoes and, frankly, not worth wasting time doing business in. By exporting you insulate yourself from the local economic shocks that happen from time to time and you will make far more money. Secondly, literally just pick a city – any largeish city: Houston, London, Helsinki, Singapore, Sao Paulo…just pick one and focus on breaking into that market. It will be far easier than you think to do so. It really is that straightforward. The important thing is to start. Pick a city, book a ticket, go there next week and seek advice from local professionals about doing business there. Instead of ‘but, but, but’-ing with a list of excuses, I’ll make it easy: if that city has your product or service then it will be fine. It’ll work. Book your ticket and crack on with it. Imagine 1000 businessmen doing this – all exporting.
