New Zealand businesses are doing it tough.
With the buffeting of the higher cost of living, higher interest rates and customer-buying resistance, New Zealand business confidence for the future is at an all-time low.
According to the New Zealand Institute of Economic Research's latest report, 35% of businesses surveyed expected conditions to worsen, compared with 25% in the previous quarter.
It notes that the high interest rate environment and increased uncertainty about the economic outlook have made businesses cautious about hiring and investment.
But small businesses can survive such tough times and even thrive
Here are ten survival tips that may help your business weather the storms
1. Review your business
What may have made your business profitable and sustainable in the past may not work now. Closely examine your cash flow and monitor your expenses and revenue. Review your operations and see where you can streamline processes and reduce costs
2. Pivoting
Small businesses have the flexibility to pivot rapidly and adapt to changing market and economic conditions. Be open-minded to adapting, whether that's using new technology to streamline costs or changing your business focus
3. Find new revenue streams
Seeking different revenue streams can help you financially protect your business and reduce risks. In fact, it may even grow your business in these uncertain times
4. Get closer to your customers
It's a given that existing customers are less expensive than seeking new customers. Communicate with your customer base. Try to understand ways you can make their lives easier for them through your offerings. The better you understand their needs the better you can manoeuvre your products and services to be more attractive to them
5. Seek advice
Advice from external experts not only provides you with an independent, impartial view it can also give you some mental relief. Seek ideas and guidance from people you trust and respect – sometimes, a fresh pair of eyes can make all the difference.
6. Look after your staff
With the rise in job vacancies and the demand for more skilled workers, business owners need to find ways to encourage staff to stay rather than shop around for a better position. Honest communication can help you discuss ways that make your business a place that staff don't want to leave
7. Be wary with debt
In the good times using debt to help grow your business can be a good strategy. But in these tough economic times it can be fatal. It's often important to look at ways to reduce or even eliminate debt while times are tough. It keeps your cash flow healthier and supports your survival
8. Have a backup plan
It's tempting to stick to a business plan you made a year ago, but when the going gets tough, it's important to revisit your plans and adapt to the circumstances if needed.
9. Get paid on time
With the cost of living on the rise, you may find your clients are slower to pay bills. This can not only impact your cash flow, but it is also time-consuming chasing unpaid debts. There are several ways to encourage clients to pay, rather than bringing in debt collectors, ranging from simplifying your payment methods to making sure your invoices are clear and easily understood.
10. Keep calm, don't panic
It's understandable for business owners to be troubled about their futures. But you must be objective about how you survive and possibly prosper in these times, constantly reviewing changes in the market, economy and customer activity. Be pragmatic and clinically review your business to see if it is suited to the changed environment. Is your business in its present form sustainable or do you have to re-thinks aspects?
These times can sometimes deliver opportunities for growth and sustainability, or even to start a new business. The trick is to be methodical in dealing with issues and looking at where you can take your business in 2025 and beyond.
Important notice
This article provides information rather than financial advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, and seek appropriate financial advice before you act on any information.
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