New Zealand small businesses are less confident about their prospects than they were a year ago, with 28% of Kiwi firms expecting the economy to slow down in 2013. However, despite this 68% are hopeful that there will be some growth in their own businesses.
To help get through the year, there are a few basic steps businesses can take to survive the ups and downs of this volatile economy.
If a business is not expected to grow in 2013, reducing the reliance on debt may be appropriate. Businesses should focus on increasing their productivity using existing assets and staff and improving cash flow. Improving cash flow will also fund necessary purchases or investments without the need to resort to external financing.
If a business cannot bring costs under control or pass these on to customers, this will have serious implications on cash flow and future viability of the business.
It is good practice for business owners to review their business strategy as the market forces change. It is better being prepared for a sudden change in circumstances than to be caught off guard and suffer the financial consequences.