Chris Small: ABC Business Sales Managing Director on the number of businesses reporting losses

More businesses are reporting losses but things may not be quite as bad as the numbers make it seem. 

Inland Revenue data shows one in five businesses aren't turning a profit. 

But ABC Business Sales Managing Director Chris Small says most of those are businesses structured to make a loss, like trusts and property companies. 

He told Mike Hosking the situation he's seeing is far more positive. 

Small says 90% of businesses that are coming to see him are making a profit, with others making a paper loss. 

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
More insight into the economy you darted from ird shows
twenty percent of businesses operating at a loss. This is
in twenty twenty three, one hundred and seven thousand of
them out of the four hundred and seventy five thousand
companies we have by last year, similar to tread another
one hundred and seven thousand companies still reporting losses, more
than forty percent of those businesses, by the way, in
accommodation and food. Chris Small, CEO at ABC Business Sales,

(00:37):
is back. Well this Chris, very good morning to you.

Speaker 3 (00:39):
Okay, right, key, doing very well.

Speaker 2 (00:40):
Indeed, how many businesses run at a loss, will always
run at a loss, are a bit useless and that's
just life.

Speaker 3 (00:46):
Yeah, great point. So within those numbers is actually a
high proportion they actually have no staff, and they actually
include things like trusts and property owning companies. So i'd
say rejected to what there's a fair proportion as you
look at previous years ninety nine thousand that I've actually
structured in a certain way which will always for text
efficiency reasons show a loss. So I think you spot.

Speaker 2 (01:07):
On there variation and sectors. I mean I highlighted accommodation
and food. Will some always struggle because of the number
of people in that sector.

Speaker 3 (01:17):
Not necessarily, I mean it's at the moment you exactly right, Retail, accommodation,
and hospitality, which all have a reliant on customer demand
or consistion of spending. As we all know, we're in
a cost of living cristis, so consumers are spending less.
So in particular, those those are the sectors that getting
hit the hardest. But no, there's no reason why those
sectors can't make money. Well, I would say is certain

(01:39):
sectors have tax efficiency structures, so when they come and
see us, for example, it's often that certain sectors are
showing a loss from a tax perspective, but when you
beck out certain private costs or other costs that are
in there, they actually are showing a profit. So there's
a few complexities within.

Speaker 2 (01:54):
Those those losing money. How does that dovetail into sales
and demand for sales of businesses?

Speaker 3 (02:01):
Yeah, good question. So I did a bit of analysis
before before I came on. So at the moment, still
ninety percent of people who are coming to see us
and making a profit. So it's approximately one in ten
for showing a paper loss. It's the sort of ratio
we're seeing it the right which which is a good sign.
So we've still got what we're seeing. Ninety percent of
small to medium sized enterprises in New Zealand are still

(02:21):
making a profit when they come and see us and
want to put their business on the market.

Speaker 2 (02:25):
Good, good, on time. As always, Chris appreciated ABC Business
Sales Boss.

Speaker 1 (02:29):
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