A new report shows SME business satisfaction has stalled and despite the perceived momentum of a shift to digital, from 2021 to 2023 the digital gap in the small business community has only closed by 1 percentage point.
But small Kiwi tourism, accommodation and hospitality operators appear to be bucking an increasingly sobering economic trend with the report showing this industry rated their business performance satisfaction an average of almost seven out of ten.
This is a spectacular rebound from just 4.9 out of 10 from the same sector when the survey - conducted by multi-channel marketing agency Yellow - was last held in 2021.
The vastly improved satisfaction of tourism operators is even more significant when compared with the average across all industries of 6.2, a rate unchanged from the 2021 survey.
Yellow CEO, Tracey Taylor, says this an important finding and believes it’s no coincidence the tourism, accommodation and hospitality industries have shown this bounce back, capitalising on times of forced closing.
“They turned to the digital infrastructure available during 2021 to 2023 and made a shift to digital with 87 per cent decision makers now saying they have an online presence, making them the most online industry in Aotearoa,” she says.
This compares to almost a third (33 per cent) of all New Zealand SMEs (small-to-medium enterprises) which have no online presence at all.
SMEs also identified their top business goals - getting more customers (48 per cent), managing existing customers (41 per cent) and freeing up time (21 per cent).
Taylor says what this shows is that there’s no time more important than now to change the way we’re thinking, lean into growth, embrace digital transformation and stay seen.
She says the government and larger Kiwi enterprises need to change the way small businesses are supported and work together to turn the tide on business digitisation: “Let’s invest in digital transformation and marketing and move the needle on overall (business) satisfaction”
Over 1200 SMEs (with less than 50 employees) took part in the survey - New Zealand’s Small Business Nation 2023 - conducted in February by Dynata on behalf of Yellow and in partnership with NZME. There are about 587,000 small businesses in Aotearoa representing 99 per cent of all firms and accounting for 43 per cent of employment.
Taylor says the research shows how important it is for businesses to remain seen, particularly in the digital sphere. “In tough economic times we sometimes see a snap reaction as businesses jump to reduce costs with marketing budgets often in the firing line. However what we see with our customers is when they bring digital business transformation and marketing into the mix it saves time on the bottom line and allows faster growth. "
The survey revealed a number of other issues facing SMEs over the next 12 months including rising costs which was identified by 65 per cent, followed by the state of the economy 56 per cent.
SMEs are also mindful of fluctuating spending by customers (51 per cent), while mental well-being is a future concern of 28 per cent of businesses.
Taylor says this is a significant shift: “It’s clear that Kiwi businesses are facing ongoing challenges and need our support.”
“While SMEs are facing cost pressures on every line of the balance sheet and appear, on the surface, to be more vulnerable to economic change, they can also be much more agile, move faster and leverage in areas like product innovation and pricing,” she says.
“But it’s not easy. Funding and access to capital are key, not to mention the regulatory and policy environments. These are areas the government and financial institutions can step into to relieve pressures and we join the SME community in calling on them to rise to this challenge.”
But Taylor says adversity is a catalyst for new ways to do business better.
“Small Kiwi businesses are colourful, creative, hard-working people and what they have in common is their entrepreneurial spirit, their scale and their pivotal role on Aotearoa New Zealand’s economic front line.”
For more information on the report click here.