The latest MYOB survey of more than 500 businesses across the country shows that a third (33%) of SME operators believe the economy will improve in the next 12 months, while a quarter (25%) expect it to stay the same. Nearly two-fifths (38%) of SME leaders polled expect it will decline.
When it comes to their own business performance, SME business owners are slightly more upbeat, with more than a third (34%) expecting their revenue will increase over the next 12 months, while 40% expect their revenue will be about the same. Just over a quarter (26%) believe their revenue will decline.
MYOB Chief Customer Officer - Dean Chadwick, explains that a number of factors are likely to be feeding into the restrained confidence from SMEs.
“Between ongoing global disruptions and the General Election coming up, we’d expect some lingering uncertainty to be shaping the economic and business outlook for local SMEs. On top of these macro factors, these businesses are also contending with rising overhead costs, softer customer demand and cashflow challenges.
“Despite these hurdles, the majority of businesses we polled are taking practical action to drive sales and position themselves for growth as conditions recover.”
Springing into action
More than half (54%) of local SME operators are making changes to improve sales over the next few months, with key tactics including offering more deals and discounts, increased advertising and promotional activity, and plans to expand product or service ranges.
Beyond a focus on direct efforts to grow revenue this season, a similar proportion (56%) of business owners surveyed are planning to invest in refreshing elements of their business over the coming months.
Staff training and development (25%) is currently the top area targeted for investment by those surveyed, closely followed by software and technology upgrades (24%). Other planned investments include new equipment or machinery (16%), renovations or premises upgrades (13%), and sustainability or energy efficiency improvements (11%).
“Rather than waiting for the ‘green shoots’ to appear in the recovery, many businesses are acting on the things they can influence to make growth happen. With businesses planning to spend and invest, while also generating sales through the products and services they offer, there is reason to feel positive about how spring is shaping up,” says Dean.
Business basics on the spring clean list
When it comes to the parts of the business most overdue for a ‘spring clean’, clearing out old inventory and tidying up physical space (32%) is top of the list for Kiwi SMEs, followed by updating processes and administration (23%), and digital tools and systems (22%).
Finance and accounting management also features on the list, with 18% identifying this as among the areas in need of attention. On average, SME operators last completed a full ‘financial spring clean’ such as reconciling accounts and chasing invoices, nearly five months ago - lining up with the typical end of the New Zealand tax year. Notably, nearly one-in-10 (9%) say they last did this more than a year ago and 7% can’t recall the last time they did a ‘spring clean’ of their finances.
“While many business owners monitor their position throughout the year, a financial spring clean can be a useful opportunity for local SME owners to make sure they’ve got an accurate picture of the business’s performance, as well as reassess pricing, supplier relationships and their pipeline forecasts,” explains Dean.
“Businesses with a clear view of their finances are better placed to act on opportunities as they arise, be more resilient to any curveballs and invest with confidence. With the busy summer trading period ahead, having that clarity can help business leaders make timely decisions, support their teams and finish the year strongly.”
ENDS