{"id":20497,"date":"2025-02-05T02:17:18","date_gmt":"2025-02-05T02:17:18","guid":{"rendered":"https:\/\/nzsda.org.nz\/?p=20497"},"modified":"2025-09-23T03:09:36","modified_gmt":"2025-09-23T03:09:36","slug":"nz-small-businesses-struggling-key-insights-from-2024","status":"publish","type":"post","link":"https:\/\/nzsda.org.nz\/index.php\/2025\/02\/05\/nz-small-businesses-struggling-key-insights-from-2024\/","title":{"rendered":"NZ Small Businesses Struggling: Key Insights from 2024"},"content":{"rendered":"\t\t
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NZ Small Businesses Struggling: Key Insights from 2024<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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An annual Business Sentiment Survey, by Advantage Business, for 2024 highlights the increasingly tough landscape facing New Zealand\u2019s small businesses \u2013 grappling with inflation, fluctuating demand, tight cashflow, and tepid support from government and banking sectors. Thank you to the Advantage Business community for sharing these valuable insights \u2013 your input offers a snapshot of the challenges and a roadmap for necessary changes.<\/span><\/h4>\n
Market Challenges Intensify<\/h5>\n

Eighty-two percent of respondents reported that shifting market conditions, including volatile demand and high operational costs, are likely to impact their businesses over the coming year. For many, consumer demand is weakening as customers delay purchases and focus on price. This \u2018price-first\u2019 mindset has become more entrenched, with consumers less willing to spend on non-essential items. As one respondent put it, \u201cConsumer demand is weak and harder to predict,\u201d a sentiment that captures the difficulty of planning for the future in such an uncertain climate.<\/p>\n

The inconsistency in government-driven work pipelines adds another layer of complexity, with many SMEs hoping for a more stable flow of projects that could support long-term planning. Businesses expressed frustration over this stop-start environment, which makes resource allocation challenging and undermines operational efficiency.<\/p>\n

Cashflow and Investment Strains<\/h5>\n

Cashflow remains a critical concern, with 64% of respondents expecting it to worsen in the next year. This is an increase from previous years, highlighting the persistent financial pressures on SMEs as they contend with inflation and rising operational costs. Reduced cashflow limits a business\u2019s ability to act quickly, explore new growth opportunities, or even maintain current operations comfortably.<\/p>\n

Additionally, restricted cashflow makes securing working capital for investment challenging. Although slightly more optimistic than in previous years, 42% of small businesses are either unlikely or very unlikely to invest in new initiatives in 2024. For many, the burden of high interest rates and tighter economic conditions have made growth a secondary consideration\u2014survival remains the primary focus. While a cautious optimism is visible, businesses are acutely aware that any steps toward expansion must be taken carefully in a potentially unstable market.<\/p>\n

Workforce Management and Recruitment Struggles<\/h5>\n

The labour market shows some easing, with lower turnover and more applicants; however, finding skilled workers remains difficult. Forty-three percent of businesses noted challenges in recruiting the right talent, particularly for skilled roles. In certain sectors, including mechanics and trades, skilled workers are still hard to find, even with higher unemployment rates. Business owners report that while recruitment has become easier overall, finding employees with the necessary skills remains a stubborn issue.<\/p>\n

Retaining talent and maintaining morale are also significant challenges. Many businesses have had to implement cost-cutting measures, including reduced hours, which has impacted employee morale and job security. Younger managers, unfamiliar with the realities of a prolonged economic downturn, are finding it difficult to keep team spirits high as they face slowing demand and increased pressure to deliver with fewer resources. Nonetheless, some SMEs have taken proactive steps to strengthen team cohesion, using regular communication and team-building efforts to keep morale up amid economic uncertainty.<\/p>\n

Government and Banking Sector Support: Lukewarm at Best<\/h5>\n

Government support continues to be a point of contention among SMEs, with over half (55.6%) of respondents viewing it as inadequate, and only 11.1% feeling their businesses are adequately represented in policy discussions. The numbers, though slightly improved, reflect a sentiment that government engagement with small businesses remains minimal. Many feel that policies do not address the specific needs of the SME sector or respond quickly enough to changing economic conditions.<\/p>\n

The banking sector fares slightly better, though with mixed reviews. Around 40% of respondents rated banking support as \u201cadequate,\u201d but another 37.7% saw it as inadequate. Business owners voiced concerns over banks\u2019 cautious approach, which limits SMEs\u2019 access to vital financing for growth. While some perceive banking support as improving, others feel that financial institutions need to play a more proactive role in fostering growth for small businesses.<\/p>\n

Key Needs and Priorities for Survival and Growth<\/h5>\n

When asked to prioritise their needs, respondents identified sales, people management, and marketing as top areas for additional support. With pressure on revenue, optimising sales strategies has become crucial, while people management and morale-boosting efforts are necessary to maintain productivity and retain talent. Marketing support is also in high demand as businesses strive to remain visible and competitive in a market that\u2019s increasingly focused on value.<\/p>\n

Amid these difficult conditions, the resilience of New Zealand\u2019s small businesses is clear. Despite facing significant financial, operational, and staffing challenges, many SMEs are committed to adapting and finding new ways to operate effectively. However, it is evident that more consistent, targeted support from government and financial institutions could enable them to strengthen their position and contribute more robustly to the broader economy.<\/p>\n

Looking Ahead: A Call for Greater Support and Consistency<\/h5>\n

The 2024 Business Sentiment Survey paints a picture of resilience amid considerable economic strain. While inflation appears to be under control and interest rates may be levelling off, the journey ahead remains uncertain. Small businesses continue to face obstacles, especially around cashflow, customer demand, and staffing, which call for a more responsive approach from both government and financial institutions.<\/p>\n

Advantage Business stands committed to helping New Zealand\u2019s small businesses adapt to these challenges with tailored advice and practical solutions. For SMEs looking to build a sustainable future, strategic planning, team cohesion, and efficient operations will be essential tools on the path forward. As always, we are here to support New Zealand\u2019s businesses with the insights and guidance they need to navigate these tough times and find opportunities for growth.<\/p>\n

For more information on how we can help your business, or access to the full report, please get in touch<\/a>.<\/p>\n

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Article by Advantage Business<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Survey results from Advantage Business highlight the tough conditions New Zealand\u2019s small businesses faced in 2024, including inflation, fluctuating demand, and tight cashflow. The survey offers valuable insights into these challenges and the changes needed.<\/p>\n","protected":false},"author":2,"featured_media":20499,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-20497","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-updates"],"_links":{"self":[{"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/posts\/20497","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/comments?post=20497"}],"version-history":[{"count":7,"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/posts\/20497\/revisions"}],"predecessor-version":[{"id":20506,"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/posts\/20497\/revisions\/20506"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/media\/20499"}],"wp:attachment":[{"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/media?parent=20497"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/categories?post=20497"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nzsda.org.nz\/index.php\/wp-json\/wp\/v2\/tags?post=20497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}