The Road to Failure


Saturday 20 September 2003



I don’t want to burst the bubble of local confidence but I’ve found out the survival rate for small businesses in New Zealand is about the same as for a kakapo chick in a cattery. According to Statistics New Zealand 70% of businesses employing less than five people fail in the first three years.

The failure rates decrease with the size of the firm. Businesses with 100 employees or more hardly ever fail.

As soon as I saw these figures I knew there’d be trouble. They should have come with a Surgeon General’s Warning: “Caution! These figures do not mean you are assured of success simply by employing 100 people”.

If you run a mower repair business from your garage do not, DO NOT, go out and recruit 99 other guys. They will not give you immunity from business failure. In fact, they will increase the chances of failure. They’ll drink your tea, clutter your ashtrays and undermine your carefully crafted business plan.

The road to entrepreneurial failure is obviously paved with the corpses of small businesses. Many are called to the corporate trough, but few survive long enough to get fat.

As I’ve thought about this over the past few days, all my musings have led me back to one man - Shrewdy Henderson.

‘Shrewdy’ (real name unknown) was a colossus of my boyhood, and taught me most of what I know about success in business. Shrewdy ran an electrical appliance shop in Tuatapere in the 1960s. Actually, to say he ran it is probably talking the business up a bit too much. Let’s say he stumbled into the shop one day, picked up a screwdriver and sat with it in his hand for 25 years.

Business advisors will tell you success is built upon strong cash flow and impeccable service. Shrewdy would disagree. Shrewdy’s cash flow was as lively as a Central Otago streambed in a February drought, and he served like a one-armed tennis player.

His shop was a cast-off from Gunsmoke: weatherboard façade with corrugated iron verandah and a couple of dusty plate-glass windows displaying Goblin Ace vacuum cleaners and half a dozen 45rpm records, with titles that were antiquated even by the standards of 1960s Western Southland: Green Door, Yellow Bird, My Boomerang Won’t Come Back.

In appearance Shrewdy’s shop was not out of place on Main Street, Tuatapere. Most businesses were of the low-wattage-lighting and fly spot variety, with aging proprietors seated in Dickensian finality behind plain wooden counters. Some stayed that way throughout my entire boyhood. For years I thought the word prop. painted on the shopfront referred to a support for building or owner.

What set Shrewdy’s apart was the man himself. Through my child’s eyes he was a big old man, burly and ponderous. His skin was brown and shone with sweat or grease. His bald head sported a massive crater, about the size of a serving spoon, where the skull had collapsed or been removed. In a sawmilling town like Tuatapere this sort of sight was less uncommon than in most other places. I took it for granted he’d been a bushman who, through an accident, had slipped down the employment ranks to shopkeeper.

Shrewdy was like one of those prisoners they put on home detention. He never moved outside of his shop. Actually he never moved beyond the tiny repair room at the back of the shop. This room, the size of an average ensuite, was lined from floor to ceiling with drawers and shelves from which electrical cables, fittings and spare parts sagged, streamed and tumbled. The floor sloped towards a single grimy sash window. The workbench had one tiny clear space, no bigger than a computer keyboard, lit by an anglepoise lamp. Shrewdy sat at this workspace almost completely immobile.

How did his business survive? I think it was because of television. Shrewdy rode the wave of early television, when receivers were unreliable, reception was ghostly, and we were forever adjusting the vertical hold.

Shrewdy wrecked havoc in our district with his peculiar form of customer service. When our TV set broke down Dad took it to Shrewdy, who gave him another so we’d have something to watch while ours was repaired. Months went by, and Dad’s visits to the shop to retrieve our set were met with mumbled apologies about ‘getting a part out from Invercargill.’

We eventually found our TV set in a neighbour’s house. Shrewdy had given it to them while he repaired their faulty set. In my memory half the town’s TV sets were in the wrong lounges. I don’t know how the situation was resolved. I’d like to think we all got on the phones and organised a swap-meet at the Domain.

My mum tells me Shrewdy died a rich man. I’m glad of that, because he certainly lived like a poor one. Perhaps that’s how he came to be called Shrewdy. Whether rich or poor, he is an icon of small businessmen, forever defying Statistics New Zealand’s gloomy forecasts of early failure.