Matt Cowley: Building business capability the next step

Tauranga Chamber of Commerce chief executive Matt Cowley. Photo / File

COMMENT

The Government has made a couple of good decisions recently.

Now we're at alert level 1, life is almost back to normal as the remaining restrictions focus on New Zealand's borders.

Tauranga is recognised as a national events destination and I am sure we are all looking forward to a busy summer season full of Kiwi tourists.

The Government has also widened the eligibility for the next phase of staff wage subsidy from July 1 onwards. It now includes businesses that have experienced 40 per cent revenue reduction from this time last year - up from the originally proposed 50 per cent reduction.

There was genuine concern with many businesses wondering how they would operate under level 2 restrictions without further staff subsidies. I gauge this concern by the number of businesses asking the chamber for restructuring and cashflow support.

New Zealand's taxpayers cannot afford to continually subsidise businesses forever. But the next phase of staff wage subsidies will give many more employers another eight weeks to revise their business plans, while still keeping their staff employed.

It is expensive for employers to let staff go, only to recruit and train new staff once the economy picks up again.

I have no doubt that the Government's decisions saved many local jobs.

While the Government was not clear at the start of lockdown on who was allowed to operate under level 4, the Government's guidance to businesses since then has actually been pretty good.

The free information and tools on the Government's website, www.business.govt.nz, continue to be an excellent resource for any business or not-for-profit entity. All organisations should use this website as the first port of call if they need any business help.

Building business capability is the next step.

One on-going issue that Covid-19 has brought to the forefront is the need for business owners to continually upskill.

For many years, the chamber has seen a number of business owners who are amazing at their trade but struggle to put together key planning documents, such as a business cash flow forecast.

As the business environment will be uncertain over the next few years, business owners will need to be flexible and use their business planning skills to navigate their best path forward.

The trouble is that many small businesses are running on thin margins and have little capacity to re-invest into the business. Small business owners often wear the hats of chief executive, HR department, marketing manager and shop floor manager all at the same time.

It is an on-going challenge for small business owners to keep the business running while also finding time to upskill themselves.

I hope the lessons learnt for business owners during Covid-19 will not be forgotten. The importance of cash flow forecasts, good communication with staff and customers, and managing suppliers are key fundamentals.

There needs to be a focus on creating more resilient businesses. This will require investment from Government, training and tertiary educators, and business owners.

It's not just small businesses either. Many international chief executives are re-strategising their supply chains from having a maximum efficiency 'just-in-time' goal, to adopting a more robust 'just-in-case' goal.

This would provide those businesses with backup options during this period of high volatility, but it will be more expensive.

The human species has succeeded because of our ability to adapt to new situations. It will be the businesses who can adapt the fastest that will best survive this period of uncertainty.

Matt Cowley is the chief executive of the Tauranga Chamber of Commerce.