Business School

Limitations on meeting business objectives

Areas highlighted by the survey which help explain constraints on business growth - finance, rate of expansion, availability of resources and other factors such as the local economy.


Just how much availability of finance acts as a constraint on growth has been the subject of debate in many countries. Respondents to the GNZB Survey rated it as only a moderate limitation on their ability to meet their business objectives over the past three years, behind market factors such as overall growth of market demand in principal product markets and increasing competition, as well as input constraints such as availability of skilled labour, marketing and sales skills.


However, faster growers rated availability of finance for expansion a significant or crucial limitation than moderate or non-growers (26%, 14%, 19%). 32% of those wishing to grow substantially rated finance a very significant or crucial limitation, second only to demand levels in principal markets, and significantly higher than the other growth aspiration groups (see Figure 10). Those wishing to grow substantially also rated the availability of overdraft finance a much greater limitation than the other groups. Finance availability thus appears to be a real constraint on growth for those wishing to grow substantially.

Figure 10: Limitations by growth aspirations

Note: 1 = Insignificant; 2 = Slightly significant; 3 = Moderately significant; 4 = Very significant; 5 = Crucial. Differences between means: *** differences significant at .001; ** differences significant at .01; * differences significant at .05.


Fast growers

Fast growers were also more likely than other growth groups to rate availability of skilled labour, marketing and sales skills a significant or crucial constraint. And for substantial growth aspirants, marketing/sales skills, skilled labour, and managerial skill availability constituted the third significant set of limitations, after demand in principal markets and finance. Overall, would-be and actual fast growers saw availability of skilled personnel and finance, as well as demand in principal markets, as serious limitations on meeting their business objectives.


Non-growers and those desiring no growth, on the other hand, rated availability of skilled personnel and finance somewhat less highly (except for availability of manual labour), and lack of demand and increased competition more highly, as well as "other" factors, for which there were frequent references to recession or economic downturn, and exchange rates, changing government policies, compliance costs, and size of the market.


Exporters were more likely to seek additional finance than non-exporters. The higher the percentage of exports, the more cost and availability of finance was felt to be a significant or crucial limitation.