New Zealand business leaders and owners are encountering a variety of challenges in the current market, from economic pressures and financial concerns though to workload issues.
Unfortunately, business leaders are now feeling more negative than ever when it comes to their business performance – so what can they do to navigate the challenges facing them right now? The latest BDO Business Wellbeing Index shows just 53% of business leaders have felt positive about their business performance in the two weeks prior to the survey. This is the lowest level of business performance sentiment seen since BDO’s first biannual survey in May 2022.
And while the report is based on a nationwide survey of more than 600 business leaders, we know this sentiment is being felt strongly here in the Hawke’s Bay.
Business performance sentiment improves for agribusiness, falls for retail and tourism
The BDO Business Wellbeing Index shows us that economic and financial pressures are impacting some of New Zealand’s biggest business sectors, including tourism and retail.
This will be no surprise for many of Hawke’s Bay’s business leaders, with our region hit hard in recent years by COVID, Cyclone Gabrielle, and now ongoing cost of living pressures.
However, the index shows that agribusiness leaders are feeling more positive about their business performance than they were during the last survey period in October 2023, which suggests there is hope on the horizon for the sector.
However, the index shows wellbeing is declining for agribusiness leaders, providing a timely reminder on how important it is for business leaders to take time to focus not just on business performance, but on mental wellbeing too.
Tips for business leaders to navigate the current market challenges While market conditions are challenging many business leaders and owners, there are practical steps you can take to help navigate this landscape:
■ Cash flow management: Forecast your cash flow requirements and think about the ‘what ifs’ to ensure you understand your potential financial position under different scenarios, and plan what you would do to mitigate risk or maximise opportunities in each. Keep a close eye on debtors to ensure payments are made as expected, and regularly review your terms of trade to keep them fit for the current environment.
■ Stock management: Many businesses end up with dead stock on their balance sheets. They don’t want to sell it at a reduced price as it will hurt their margin and they could make a loss, but holding on to it affects cashflow. Consider storage and insurance fees too and it may be better to sell the stock and free up space and funds.
■ Strategic thinking: While understanding the current economic climate is the first step, it’s essential that businesses form or refresh their strategic plan to ensure they’re moving in the right direction. Consider what success looks like in the long-term and how you’ll get there – ensure that decisions are strategic, rather than reactive – and that they will move you in the right direction toward your goal.
For more help on navigating the current business challenges, view the BDO Business Wellbeing Index tips section here or contact the team at BDO Hawke’s Bay.
Article written by Glen Fan-Robertson – Agribusiness at BDO
