New Zealand has 617,330 businesses. Around 74% of them employ nobody but the owner.
That is not a weakness in the economy. It is the shape of it. About 97% of our businesses have fewer than 20 people, which means most of the work in this country happens in organisations small enough to fit in a room, run by people carrying the risk personally.
Which is why whether new businesses survive is not only a private matter for the founder. It is an economic one.
The folklore, and the evidence
The familiar claim is that small businesses create the jobs. When Haltiwanger, Jarmin and Miranda tested that against the entire US business register, the size effect disappeared once they controlled for age. It is not small firms that create net new jobs. It is young ones. Startups and the firms that make it through their early years do the heavy lifting; the rest of the distribution roughly cancels out.
So a country that wants employment growth needs new firms, and it needs a decent share of them to survive. In New Zealand, 46% of the businesses that started in 2019 were still trading five years later.
That gap is where the argument lives.
The part you can actually change
Nobody can make more people start businesses by wishing it. But the proportion that make it through is not fixed. It responds to whether the idea was tested before it was funded, whether the numbers were worked through or guessed, and whether anyone honest looked at the plan before the money went in.
An idea that fails in week six of testing costs a few weeks. The same idea funded, staffed and built on a market that was never there costs a house.
Every business that closes takes its jobs, its supplier relationships and its owner's savings with it. Some of those closures were unavoidable. A meaningful share were decided long before the doors opened.
Over the coming pieces we will write about what actually moves those odds: validating the idea, building a budget you run the business from, pricing, governance, buying and selling, and the parts nobody enjoys. Evidence where it exists, and the limits of that evidence stated plainly.
A note on the evidence
The job-creation finding above is from United States data (the Longitudinal Business Database), and the "firm age, not firm size" result has held up well internationally, but nobody has replicated it on New Zealand's business register that we are aware of. Treat it as a strong prior, not a local measurement. The business counts and the survival figure are New Zealand data from Stats NZ; "survival" means still on the register, so sales, retirements and quiet wind-downs all count as exits alongside failures.
Sources: Stats NZ, Business Demography Statistics (February 2025); Haltiwanger, Jarmin and Miranda, "Who Creates Jobs? Small versus Large versus Young", Review of Economics and Statistics (2013).