NZTE - Business Development

Business Programmes

The problem we are addressing

Trend in income per person

(GDP per capita, OECD = 100)
130

120

110 Australia

100

90
New Zealand
80

70 Ireland
Gap of NZ$ 6,400 per person
60 (adjusted for cost of living)
1970 1974 1978 1982 1986 1990 1994 1998 2002
(1) Calculated using 1999 PPPs. 4

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 Small New Zealand has to think big

Major issue: increasing the

global focus and
connectedness (exports) of
our SMEs

NZ is characterised by a
majority of SMEs - only
2.5% of which are
exporting.

Overall, our exporting

community is a small
fragment of our business
community - just under 4%.

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Our Key Funds
Turnover Ceiling Guidance Main Intent of Fund

Facilitating
GSF Significant Growth
< 50 million (max 500K over 3 years)
International Market
EDG-MD Development –
< 20 million (max 100K pa, min 20K pa increasing our
over 5 years) participation in
global economy

< 5 million EDG-CB Building Capability

(max 20K pa)

Enterprise Development Grant (EDG) www.nzte.govt.nz

To assist individual entrepreneurs and companies to gain additional business

skills, obtain external expertise and assist in developing business projects

For Entrepreneurs, start-ups and individual businesses

• Less ≤ 20 FTEs or <$5M turnover

Up to $20K of up to 50% in a July-June financial year

For a range of capability development projects

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EDG-CB – range of projects www.nzte.govt.nz

Services of a business mentor

Advanced management or technology-based training

Specialised advice and expertise for projects or concepts that lead towards
enhanced capability, profitability and international competitiveness
(feasibility studies, e-business, strategic design advice, market research,
enhancement & uptake of new technologies, human resources, prototype
design and development, intellectual property, strategic planning,
environmental management, production management)

International market development activities related to investigating a new market

and/or participating at a trade fair

(Plus other GSF range of projects)

Eligibility Criteria www.nzte.govt.nz

Businesses Must:

• Be Resident in New Zealand For Tax Purposes

• Be Operating in a Commercial Environment
• Be GST Registered
• Be Financially Viable
• Have a Turnover of Less than $20 Million

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EDG-MD Expenditure Categories – Market Visits www.nzte.govt.nz

Market Visits

Covered:
Set Rate Travel costs for international flight as per NZTE Allowance
Set Rate per diem (Covers Food, Accommodation & incidentals)
Inwards visits by buyers or potential buyers

Not Covered:
Flights bought with Air points/Frequent Flyer Miles
Internal Flights
Rental Cars

EDG-MD Expenditure Categories – In Market Representation

www.nzte.govt.nz
In Market Representation
Salary/Contracting fees of staff implementing strategy in market

Covered:
Must be located in-market
Contractors & Consultants in-market
If a staff member, must be permanent & Fulltime
NZ Employees on Secondment

Not Covered:
Living Expenses
NZ Based Roles
Existing or Part-Time Roles
Flights or Per Diem Allowance

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EDG-MD Expenditure Categories – Advertising & Promotion

www.nzte.govt.nz
Advertising & Promotion

Covered:

Consultants related to marketing, brand, advertising & PR strategy & Placement

Consultants related to design & production
Placement Costs
Costs for Creation & Production of Material
Transportation Costs

EDG-MD Expenditure Categories – Marketing Collateral

www.nzte.govt.nz
Marketing Collateral

Covered:

Consultants related to marketing, brand, advertising & PR strategy & Placement

Consultants related to design & production
Placement Costs
Costs for Creation & Production of Material
Transportation Costs

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EDG-MD Expenditure Categories – Trade Fair & Events
www.nzte.govt.nz
Trade Fair & Events

Covered:

Trade Fair Entry Fees

Trade Fair Exhibition Costs
Conference Attendance Fees

Not Covered:

Expenditure related to activities sponsored by NZTE

EDG-MD Expenditure Categories – Market Research

www.nzte.govt.nz
Market Research expenditure will be supported when related to the
implementation of a market development strategy

Covered:

Market Structure
Competitive Issues
Customer Characteristics

Not Covered:

Research aimed at formulating a market development strategy

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Growth Services Fund (GSF) www.nzte.govt.nz

To enable hi-growth potential firms (or groups of firms) to purchase external

advice and expertise, marketing intelligence and development services.

Target clients are SMEs with high growth potential and commitment
• Turnover 20% p.a. or >$5M over 5 years
• Less ≤ 100 FTEs or <$50M turnover

Up to $100K* co-funding of up to 50% over 3 years

• Up to $500K* for projects leading to significant growth

For a range of capability development projects

* - including GST

GSF – range of projects www.nzte.govt.nz

Strategic planning • Market research

(not NZTE)
Feasibility studies
• Human resources
Intellectual property (IP) protection
• Quality systems certification
e-Commerce strategy (e.g. ISO9002)

Production reorganisation • Quality assurance

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Guide to Eligible and Ineligible Projects for GSF Co-funding:

Eligible www.nzte.govt.nz

• Preparation of documentation to obtain finance for business development

(consideration should also be given to whether utilising NZTE’s Escalator
service)
• Feasibility studies
• Development of prototype design and testing
• Development of business, strategic or marketing plans, including market
research
• Electronic commerce strategy
• Advice and assistance for human resource development
• Assessment and implementation of total quality management, quality
assurance, and business excellence programmes (e.g. ISO certification)

Guide to Eligible and Ineligible Projects for GSF Co-funding Cont:

www.nzte.govt.nz

• Development of intellectual property protection and commercialisation

• Financial planning and development of improved financial systems as part of a
development project
• Advice on legal, tax or other issues relating to a new business structure
underpinning a new business initiative
• Assistance to fund external, professional mentors or project managers to assist
with the implementation of a growth initiative for up to 12 months
• International business exchanges
• Market research and export development assistance from a service provider
other than NZTE

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 www.nzte.govt.nz

Ineligible

“business as usual”. Care must be taken to draw a line between strategic and
business as usual work. Work up to the point of proof of concept would be
considered as eligible activity whilst the implementation of the concept would
fall into business as usual. If skill shortages are a barrier to the growth of a
company, developing a strategy to address these could form part of a growth
related project, but the actual recruitment costs would not, as they are part of
business as usual.

items of capital expenditure

activities provided by other government programmes. For example, Technology

NZ currently funds R&D and technology development. To manage this
potential overlap, NZTE will only fund the development of prototype design
and testing where this falls outside the scope of projects typically funded by
the TBG and GPRSD schemes.

www.nzte.govt.nz

Ineligible cont:

purchase of services from NZTE (e.g. market research), as these services

already contain a government subsidy. Clients have two choices if requiring
market research or export development services that are part of NZTE’s service
range:

• they can access the services provided by NZTE’s offshore network and
pay the normal fees themselves; or

• they can source the services from an alternative service provider (if
available) and have the activity co-funded (up to 50%) through the
GSF. Both options are equally acceptable.

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Frequently Asked Questions www.nzte.govt.nz

Q. How do the $100K & $500K Limits apply to GSF & EDG?
A.
$100K Project Year Limit
An applicant cannot receive more than $100K per project year (12 Calender Months from
Retrospective Date)

$100K NZTE Financial Year Limit

An applicant cannot receive more than $100K per NZTE financial year from EDG-MD &
EDG-CB

$500K Lifetime Limit

An applicant cannot receive more than $500K from EDG-MD,CB & GSF for any Market
Development Activity received from these funds since the inception of NZTE

Enterprise Culture Skills Activities (ECSA)

www.nzte.govt.nz

To promote attitudes, values and skills that support entrepreneurial activity and business
success in NZ
Focus is on seed funding and piloting new and innovative approaches
ECSA is a contestable fund
Benefits:
• A climate that recognises and reinforces business success amongst existing and
potential businesses
• A social culture that positively supports entrepreneurial activity and business
success
• A culture in education where business is seen as a positive contributor to society
and a worthwhile career aspiration in students
• Students developing enterprising attitudes and behaviours and business-relevant
skills

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 Incubators www.nzte.govt.nz

A Business Incubator is a facility designed to assist businesses to become

established and profitable during their start up phase

An Incubator provides:
• shared premises
• business advice
• business services
• networking
• mentoring
• a full time manager

The incubation period for an individual business is normally one to three years

Escalator Service www.nzte.govt.nz

Designed to fuel business growth by providing skills and assistance to

access investment opportunities.

There is a lack of access to, and understanding of, equity, venture capital
and strategic partnerships.

Eligible participants will gain investment-readiness.

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 Process
NZTE, Tech NZ, EDA, private sector

Initial assessment for potential

Initial Assessment
Workshop 2

Evaluation the business opportunity

Current Position Analysis

• Pre-due
Current
Business diligence
Position
Needs
Understanding thereview
Analysis
Assessment
business needs
Business Needs • Alliance / Partner identification
and deal requirements
Assessment •Company
•Stage
• Deal of Company
needs analysis
Structuring
• •IP
Competitive
IPstrategy
review &theadvantage
position / mapping
Workshop 3

Consider deal opportunities

Deal Broker Panel ••Competitor
Cash position
Director appointment
information
Governance
• •Alliances
Legal review / mgmt required
/ synergies
Broker the deal Prepare and Broker the deal
• •Preliminary
Past performance
Investor ID valuation
and negotiation
• •Deal
Market alternatives
Financialopportunities
and Valuation
Technical
• •Changes review to optimise deal
Offer Document
required
••High
Termlevel
outcome sheetIP structure
review and negotiation
• •Technical strategy
Due Diligence & position
management
Investment Deals

Escalator

Who Delivers Escalator

Economic Development Association of New Zealand (‘EDANZ’)

Deloitte

I Grow New Zealand Ltd

Ignition Partner Ltd

Realize Technology Ltd

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Foundation for Research Science and Technology

www.frst.govt.nz/business
What is FRST?
• FRST invests in research, science and technology on behalf of the
New Zealand Government to enhance the wealth and well being of
New Zealanders.

How do they achieve this?

• By investing nearly $400 million annually

• By stimulating both research providers and the users of research

• By working closely with other Government agencies such as NZTE

Technology New Zealand www.technz.co.nz

SmartStart

The SmartStart scheme focuses on building awareness associated with

technical innovation.

• Assists with overcoming the cost barriers for small to medium sized
businesses wanting technology appraisal services

• Access the new technology and/or access to sources of guidance and

assistance for technology-based projects

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Technology New Zealand www.technz.co.nz

GPSRD
Grants for Private Sector Research and Development

Contribute to firm growth and build research and development

management skills

• Objective is to increase the level of private sector investment in

research & development

• Aimed at SME’s with a base level of technology awareness

• Provides grants values from $10,000 up to $100,000 for SME’s

embarking on new research and development

Technology New Zealand www.technz.co.nz

TBG
Technology for Business Growth

Supports’ leading edge projects by funding the challenging research and

development stage and is targeted towards projects that move
companies towards high added value, high-margin, technology-based
products, processes or services.

• Provides up to 50% of the project costs

• Funding normally ranges from $50,000 to $2 million

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What TechNZ looks for

Project Company
• Project Plan • Business Plan
- Events and milestones, ‘kill’ - People, technology, fit, future
events growth
- Technology gap - Market channels
- Knowns vs unknowns - 3 yr finances
- People and skills\Detailed - Benefit of project, including $
costs; hrs, $, invoices, gantt - Meetings and integrations of
chart project
- IP agreement
• Cash from company

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