Business advisory group criticised

Press, 24 May 1980, Page 11

Business advisory group criticised

Wellington correspondent

An advisory group which offers it services to small businesses and which plans to establish an office in Christchurch, has come under fire from groups within: the New Zealand Chambers of Commerce and the Govern m e n t-funded Small Business Agency.-

The group is the New Zealand Business Federation. Its critics hold That it is really a financial consultancy purporting to be an independent membership organisation offering free advice. Its statement Of aims is similar to the state objects of the Small Business Agency. The critics sav that its diploma is not officially recognised by any professional groups and its newsletter has listed in its acknowledgements the names of people and organisations who say they do not. support the group.

The federations coFounder and. co-ordinator Mr A. C. van Rooyen, has denied that the group has dubious aims- or methods. Some commercial observers say the criticism boils down to petty' jealousies, that nothing in private enterprise stops a financial consultancy from getting business through a membership' arm, and that the federation should be given a chance to prove itself. The federation has been criticised in the April issue of “Retail News.”The journal says that Mr van Rooyen, a qualified accountant is not bound by the ethics of the Society of Accountants because he will not join..

A -senior spokesman for the Small Business Agency, Mr M. R. Smith, says: “as a matter of principle, people who are trying to establish themselves in a professional practice need to be very careful how they obtain business.” The federation has a membership of 200 and a budget of $89,200 for the year to October 31. A drive for 1250 new members at $45 a subscription is expected to raise 556.200 and self-improve-ment courses, at $l6O each, are expected to raise $32,000. The courses each run for four weeks.

Mr van Rooyen said it was never intended that the financial consultancy should provide for a fee. that “expert” advice offered by the federation. He and Mr -E. Holsheimer, the federation’s founding chairman, were principals in a consultancy which put up the federation’s founding capital. Mr van Rooyen said he and Mr Holsheimer had set up the consultancy but then “had the idea of a federation to help small businesses.” The consultancy had been set up in October, 1979, but “never really functioned” because it had been overtaken by the federation. It had been dissolved in April, 1980, five months after the federation had been set up. The consultancy had provided some accountancy help for small businesses at an early stage, bqt its fee had been only $l5 an hour, said Mr van Rooyen. Accountant’s private fees were $3O an hour.

Mr van Rooyen said that he now “did a bit of side work as an accountant for people who privately asked for his services.” About 5 per cent of the federation’s referrals also came to him at the client’s request. He did not solicit work through the federation. The federation’s cofounder and co-ordinator growing group of financial consultants, accountants, lawyers, and bank managers who charged a fee.

It was understood that people coming to the federation for advice would “at some time” become members, said Mr van Rooyen, but no pressure was applied. Mr van Rooyen said he was not a member of the Society of Accountants because its rules prevented him from setting up a financial consultancy with a person ’ who was not a qualified accountant. Although Mr Holsheimer was not a qualified accountant he was qualified by experience in helping small businesses

to avoid the pitfalls, said Mr van Rooyen. Of the diploma awarded by the federation, Mr van Rooyen said it was not meant to be officially recognised, although in time it might be.

“It is not meant to be shoved at the boss to justify a pay increase, or to be cross-credited to certificates issued by the Society of Accountants or Institute of Management,” he said.

Asked why the federation’s statement of aims were so close to those of the Small Business Agency, Mr van Rooyen said that the groups had similar aims. Small businesses made up 90 per cent of all commercial enterprises in New Zealand: There was room for a lot of advice. Of the newsletter’s acknowledgements, Mr van Rooyen said the acknowledgements were not intended as a list of patrons but as a gesture of thanks to people and organisations who had given time and advice to the group. “We set up the only way we knew how,” said the federation’s executive director, Mrs M. Lock, “by seeing everyone we thought we had to, telling them who we were and what we were doing and asking for- advice.”

Of the federation’s credentials, Mr van Rooyen said he was a qualified accountant with several years experience in smallbusiness management. Mrs Lock was the founder and executive director of the Electrical Contractors’ Federation for seven years. A management committee of members made the federation’s financial decisions.

A growing number of professional consultants were giving advice. About 30 accountants had befederatibn members in the last month.

The federation pain professionals in their fields to lecture at its courses, which covered cash flow, business law, marketing, advertising, accounting, and personnel training. Since its inception it had run three courses for a maximum of 20 people and had had sustained attendances. Criticism of the course was invited in a questionnaire at the end of the course, and adjustments were made.

Mr van Rooyen said that Mr Holsheimer had resigned his position as chairman of the federation and was now a member. No reason was given for this. •

Mr van Rooyen said the federation had been set up to help “the guy who has $2OO in his pocket and a beat-up old Humber 80.”