Grassroots support initiatives for Kiwi small businesses adapt to NZ’s ongoing pandemic struggles

As small businesses faced the possibility of weeks with little to no income during the first Covid-19 lockdown, a number of Kiwis stepped in voluntarily to ‘support local’ with bespoke solutions. 

Months — and another upping of Alert Levels — later, these initiatives are changing their models as small businesses continue to adapt to the challenges of the pandemic’s economic downturn.

One of these schemes is not-for-profit SOS Business. The initiative, which was founded by David Downs in March, allows people to purchase vouchers from businesses in advance to redeem once lockdown restrictions were lifted. A measure which was intended to assist firms maintain cash flow.

Now, Texas-based restaurant financing and marketing company inKind is taking over its day-to-day operations, and they’ve committed at least $5 million to invest in Kiwi businesses. 

The fintech company lends firms upfront capital in exchange for vouchers. InKind would then assist with the marketing of vouchers to on-sell to customers, which it sold at a discount to encourage long-term loyalty.

Mr Downs said he and his team were running SOS Business voluntarily through lockdown, and continued doing so on the side after they returned to their day jobs when Alert Levels dropped. 

He said he’d also received a number of offers during the first lockdown from similar initiatives based overseas and in New Zealand, but, he felt inKind’s existing operations fit best with SOS Business’. 

“InKind has similar operations in America, Canada and Australia.

“That’s what I think these guys will bring us — that specialisation and probably deeper pockets than potentially we have in New Zealand.”

Mr Downs said what mattered was local businesses would benefit, rather than who owned SOS Business. To date, SOS Business has raised $2 million for an estimated 2400 small businesses. 

He said he didn't make any money with the transfer of SOS Business’ operations, and that the local businesses he’d spoken to who used his platform were happy with the shift in ownership.

As for the $5 million figure, Mr Downs said: “We just kept negotiating with them. They’re really nice guys, and I think there’s a huge cultural alignment.”

Part of the “alignment” came with Mr Downs insisting the fintech firm continued to use the SOS brand and its existing not-for-profit voucher system. 

He said inKind’s financing model on top of SOS Business’ existing initiative would be a “huge benefit” for hospitality businesses in particular.

“We also found that a lot of small businesses really need some help with setting up websites and marketing their businesses, and they’ll be able to help them do that.”

It was those principles Johann Moonesinghe, co-founder and CEO of inKind, told 1 NEWS he was committed to keeping.

“For it to be sustainable for us, we do need to generate income from it to cover the costs at some point. But, for now, I think it's definitely not the time for anybody to be making money,” he said.

“We’re continuing to give 100 per cent of the voucher sales to the restaurants and we’re doing free marketing for the restaurants that we would normally charge for.”

Mr Moonesinghe, a former hospitality business owner himself, said while there were longer-term plans to make back their investment and earn money through inKind’s financing model, they would keep “a lot” of SOS Business’ initiatives non-profit. 

He assured his company was “no loan shark”, either, because inKind was deliberate about who it gave funding to and helped businesses with its marketing efforts to sell vouchers. 

“We look at a variety of factors when we do our financing that traditional lenders don’t look at.

“For example, we look at TripAdvisor ratings, newspaper reviews of a restaurant, we look at Instagram and as much as we can we try to send someone into the restaurant to make sure it’s a good product.”

Mr Moonesinghe said his company “really worked with the restaurant to help them”, even ring-fencing businesses’ rent payments so “they’re never going to get evicted”. 

The company’s loss rates were at about 1.5 per cent, and most of inKind’s clients had worked with them on numerous occasions, he said.

Mr Moonesinghe said he was willing to invest $5 million — and potentially more — in New Zealand businesses as the country’s handling of the pandemic meant life had largely returned to normal, bar a few hiccups.

“New Zealand is kind of the envy of the world right now.”

He said he was in the process of discussions with other hospitality organisations in New Zealand to help inKind’s support systems adapt to the local market. Mr Downs is also set to stay on in an advisory role.

Financing would be offered once the country returns to Alert Level 1, while SOS Business’ old voucher system would continue until then, Mr Moonesinghe said.

Fixing ‘the gap in New Zealand's digital ecosystem’ 

Sarah Colcord created the now-famous 536,000-strong Facebook group New Zealand Made Products during the first lockdown.

Sarah Colcord, founder of the New Zealand Made Products Facebook group.

The group has since helped many small business owners promote their products and maintain some income through the pandemic.

After partnering with Manaaki small business support forum, the group rebranded into Chooice three weeks ago. It now also features an online Amazon-like marketplace of about 1100 small business owners, as well as a “down-to-earth” Facebook Live-turned-Shopping Channel.

“It’s the vision coming into fruition. … My life has been completely flipped upside down, and there's nothing else I’d rather be doing right now,” the 24-year-old former Manurewa Local Board member said.

“As soon as Covid-19 hit, a lot of brick and mortar businesses realised they did not have a digital presence, or if they did have one, it wasn’t a very good one.

“Covid-19 highlighted the gap in New Zealand's digital ecosystem, and essentially that Facebook group brought that to the surface.”

Ms Colcord said she noticed an influx of “side hustles” on the Facebook group over the past few months, many from women as they were disproportionately affected by job losses caused by the pandemic .

But it’s the Facebook community attached to Chooice that made it unique, she said.

“You can have all the people in the world selling on the platform, but if nobody’s going in buying, it’s not serving its purpose.”

Ms Colcord said she was getting daily offers from people who wanted to partner with her as her Facebook group grew. 

But, she said Pat MacFie and Monty Betham, two of the co-founders of Manaaki, “stood out as being authentic people who weren’t after anything”.

She said she felt she had common ground with the values of Manaaki’s founders.

“He tāngata, he tāngata, he tāngata … not just business owners, but their people: their staff, their whakapapa, and their whānau — where they’ve come from and where they’re going.” 

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