It's been tough for Kiwi businesses in recent years, and while it may ease, there are still small challenges to overcome for small business owners.
Kiwi businesses have faced a barrage of global challenges – pandemic lockdowns, global warming, wars, world supply chain disruptions, cyber-attacks, higher interest and the rising cost of living.
But it may improve in the New Year, with the International Monetary Fund predicting the New Zealand economy will grow 1.0% in 2024.
Yet there remains a lot of uncertainty and concern for small businesses.
A MYOB survey in 2023 showed nearly 70% of New Zealand businesses think the next 12 months will be tougher than the last 12 months.
How can you prepare for financial challenges?
Here are six tips to help you navigate your financial journey in 2024.
Be agile
One advantage small businesses have is their agility and the ability to adapt to change. The rush to go digital during the pandemic was an excellent example of how many businesses quickly and successfully moved their goalposts. Look at changes and challenges as opportunities and consider how they could help you.
Review your business plans regularly
Look to adjust your plans regularly before they start impacting your day-to-day operations. A plan should be a dynamic document rather than something you review once a year. By tweaking a lagging product or stretched budget, you could help to minimise issues down the track.
“A plan should be a dynamic document rather than something you review once a year”
Keep track of your finances
Capital and cash flow are a business' lifeline. In these tougher economic times, securing credit can be difficult. Owners need to keep their finances in order and have in-depth financial reports to show banks, lenders and investors.
Aim to look at cutting unnecessary spending, improve inventory management, and make changes to ensure you get paid as soon as possible (e.g., accept online payments).
Focus on your customers
The rising cost of living means times are tough for your customers too. People are more cost conscious, so make sure to listen to their feedback and take it on board to help attract and retain customers.
Costs are rising, and consumers, although weary of it, understand prices may go up.
Communication is key, so if you increase your costs, make sure your customers know why.
Speak with experts
It's worth speaking with the experts when it comes to your finances and insurance cover. Uncertainty and challenges mean it's not worth guessing.
Speak with your accountant and contact an insurance broker to make sure you have the right cover.
Prepare for rainy days
Unexpected issues and sudden expenses can derail a small business. Putting aside a dedicated rainy-day fund with three to six months' operating costs sitting in it can help to weather financial storms.
The New Year is also a great time to review your insurance packages, so speak with your insurance broker today to find the best cover for your budget and your needs.
To sum up
It's been a rollercoaster few years, but it won't last forever. With some careful planning and preparation, your small business can not only survive but flourish in the future.
Important note:
This article provides general information rather than financial advice. The content of this article has been prepared without taking into account your specific objectives, financial situation or needs.
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