The October BDO Business Wellbeing Index shows that financial challenges and economic hurdles continue to trouble New Zealand business leaders, who are now feeling more negative about their business performance and finances than ever. So how can our business owners and leaders in Hawke’s Bay face into the current challenges – and make the most of any opportunities?
Financial pressures remain the chief concern for business leaders The sixth BDO Business Wellbeing Index report was based on a nationwide survey of more than 530 business leaders in September 2024. It shows that just 51% of business leaders are feeling positive about their overall business performance – the lowest score since our first survey measure in May 2022.
Similarly, only 35%have been feeling positive about their business financial performance, which is also a record low. While these results are concerning, they most likely won’t be a surprise for many businesses in Hawke’s Bay. Like the rest of the country, we have been impacted by New Zealand’s slow economy and adverse weather events – especially Cyclone Gabrielle – in recent years. However, there are some green shoots and signs of positivity.
The recent cuts to the Official Cash Rate and return of inflation to within the Government’s target band will be positive news for many businesses. Closer to home, the return of Napier’s Art Deco Festival and the Land Rover Horse of the Year signalled optimism and bought prosperity to Hawke’s Bay, and the Christmas and summer spending seasons are welcomed by local retailers and tourism providers. Most importantly, we know our local business leaders are resilient and resourceful. Many of the challenges they’re facing right now are not new, and there are some things they can do to help navigate them.
Our tips for Hawke’s Bay business leaders:
■ Prioritize Maintaining a Healthy Cash Flow. Keeping a close eye on cash flow ensures that you have enough liquidity to cover operational costs and other financial obligations.
■ Budget for the next quarter. Budgeting is essential as it allows you to plan and allocate resources effectively, helping you anticipate potential challenges and prepare for them in advance.
■ Monitor Employer Deductions and GST Payments. Staying on top of employer deductions and GST payments ensuring they are filed accurately and on time, is vital for avoiding any penalties or legal issues.
■ Optimize Business Results through Provisional Tax Payment Review. Provisional tax should be reviewed ahead of each payment; if business results are down, consider reviewing tax payments down.
■ Conduct a pre-summer stocktake. It’s easy to end up with dead stock on your balance sheet – you may not want to sell it at a reduced price as it will hurt your margin, but how long should you hold on to stock without cash coming in? What is it costing you in storage and insurance to hold the stock? It may be better to take the hit in the short term to utilise these funds more effectively – and bring in new products to attract customers in the Christmas retail rush.
■ Monitor staffing levels and rosters. The outlook and workload for many hospitality, retail, and tourism businesses have changed in recent years. Make sure your staffing levels and rostering system are fit for purpose and respond to the current market dynamics. As part of this, you could consider introducing more variability into rostered hours to add more flexibility to your workforce and fill shifts – particularly as you approach the busier summer season.
■ Reach out. Seek guidance from professional advisers such as accountants, lawyers, and banks to gain valuable insights for navigating challenges successfully. Look beyond your business for support and advice. Tap into the various groups and resources of the Hawke’s Bay Chamber of Commerce.
For more help in navigating the current business challenges, view the BDO Business Wellbeing Index tips section here or contact the team at BDO Hawke’s Bay.
Author: Lisa is an Advisory Partner at BDO Hawke’s Bay. She has more than 25 years’ experience advising small and medium sized businesses on a range of issues. Lisa’s clients span the motor vehicle, construction, retail, medical and pharmaceutical industries. She has extensive experience with business structuring as well as preparing budgets and business plans. Lisa has recently been conferred to Fellowship FCA Designation by CA ANZ.
