BDO New Zealand is committed to serving all corners of the nation’s diverse and thriving business landscape. In pursuit of this commitment, our Māori Business Survey shines a spotlight on one of our most distinct sectors. Our efforts to track the shifting attitudes of Māori business year on year, however, has been upended by the unprecedented events of 2020. So, what’s changed?
Below, we take a closer look at the 2020 Māori Business Survey to see what matters to the sector, how it has been impacted by COVID-19, and where it’s headed in the future. Learn more below.
Context: COVID-19 impacted every corner of the New Zealand economy
Certainly, the COVID-19 pandemic and Aotearoa’s strident Alert Level 4 lockdown impacted the New Zealand economy far beyond the Māori business sector. Nationwide, consumer confidence plummeted to its lowest level since the 2008 financial crisis. In April, the nation’s employment plummeted to just 39%. Bank bill yields fell to just 0.25% per annum and have languished around 0.30% ever since. Livestock and forestry commodity prices cratered.
Fortunately, New Zealand’s economic activity bounced back admirably as lockdown restrictions lifted.
What really matters to Māori business owners?
Our annual Māori Business Survey has always demonstrated that the Māori business sector measures itself by different metrics than other New Zealand business sectors. The sector has, in previous surveys, valued cultural, social, and environmental outcomes over financial performance. Community support is integral to Māori life, as reflected by Iwi and Hapū, and respondents to BDO’s Māori Business Survey routinely stated that their capacity to support and provide for their communities, culture, and environment was the prism through which they defined success.
The survey has offered an illuminating contrast between the sector’s priorities before and after COVID-19. Comparing our data to the 2019 Māori Business Survey has shown us how the pandemic impacted attitudes towards everything from international collaboration to government support. While it’s difficult to determine the extent that COVID-19 has been the primary driver behind these shifting attitudes, we feel like many meaningful shifts in the sector will have corresponded to meaningful disruptions to the market.
The Impacts of COVID-19 on Māori Business
These values proved crucial as the sector strained to overcome the impact of COVID-19. Our survey enquired about both the positive and negative challenges Māori businesses have faced post-COVID-19.
Positive impacts of COVID-19
Māori business owners, via our survey, made clear that they saw COVID-19 as an opportunity to extend their impact in their respective communities. A plurality of respondents cited “Social need” as the primary positive outcome of the pandemic. Some mentioned the volume of people who supported their businesses and helped them to survive. We believe this to have been an extension of Aotearoa’s intensified effort to buy local and support community businesses during recovery.
The other major positive to emerge from the pandemic was the Māori sector’s relationship to technology. Like other sectors, Māori businesses were forced to move sales operations to e-commerce platforms and communicate amongst teams via online tools, solutions that will have a continued positive impact on businesses beyond COVID-19.
Negative impacts of COVID-19
The negative impacts of the pandemic were largely in-line with expectations. The Alert Level 4 lockdown cut deep into businesses’ bottom lines, and indeed nearly 40% of survey respondents said they had been most negatively impacted financially post-COVID-19. The financial realities of the pandemic were also reflected in other areas of the Māori Business Survey.
While the survey revealed that Māori business owners continue to identify cultural, social, and environmental outcomes as the primary purpose of their business or organisation, they have come to measure success more by financial performance. In last year’s Māori Business Survey, community engagement, cultural wellbeing, and happy and well-whanau were the primary success metrics for the sector. While these factors are still highly regarded, the presence of financial performance atop the 2020 priority list speaks to the need for financial stability to meet these other goals—stability that COVID-19 severely undermined.
COVID-19 has laid bare the imperative of sound financial reporting to deliver on the other, less-reported outcomes the Māori sector considers so important.
Strategic planning & risk registries
We asked Māori business owners if they had risk management registries in place and strategic plans outlining their goals and aspirations. These are important measures that will reinforce businesses against the impacts of future economic fallout. Encouragingly, the Māori Business Survey revealed a sector that hasn’t lost sight of the future.
Risk registries evaluate business data to determine the potential risks that would have the largest impact. They are a valuable resource when developing successful business recovery plans. Over two-thirds of survey respondents said they either had a risk registry in place to respond to future pandemics and other eventualities or intended to develop one.
Furthermore, a strategic plan to outline a business’s goals and aspirations can inform priorities in the short-term. Our survey suggests that over 60% of Māori businesses have strategic plans in place. More interesting, however, is that over 30% of responding business owners are re-evaluating strategic plans due to COVID-19. Nearly a quarter of respondents that had a strategic plan already in place stated that they would review their existing plan post-COVID-19. Additionally, over half of the respondents with no strategic plan in place felt compelled to develop one due to the pandemic.
What does the future hold for Māori business?
COVID-19 forced many New Zealand businesses into a defensive posture, shifting away from long-term growth to focus on short-term survival. The heightened focus on financial performance among Māori business owners exemplifies this, but the Māori Business Survey also demonstrated that the sector hasn’t lost sight of the big picture. When asked what Māori businesses most hoped to achieve over the next five years, sustainable business growth remained the top priority.
The sector clearly understands the challenges it faces beyond COVID-19 as well. Respondents to the Māori Business Survey said their biggest wero are funding, people (both capability and capacity), and access to adequate capital. These are macro-level challenges, indicating a sector that is looking beyond COVID-19 and reflective of businesses that measure themselves more by opportunities and support for the people in their communities than by naked profitability.
Ultimately, we see a sector with healthy priorities and clear-eyed vision—a sector that has held true its values through unprecedented challenges. The future is bright for Māori business in Aotearoa.
Proudly supporting Māori business in Aotearoa
Understanding Māori businesses is crucial for BDO New Zealand to continue delivering industry-leading financial services. Engaging with Hapū groups and supporting businesses at the Iwi level, we strive daily to deliver positive outcomes to the Māori sector. Contact BDO today for accounting support that understands what distinguishes Māori business.
