If recession looms, where’s room for growth? SMEs prepare for a tough year

Small to medium businesses are preparing for a tough new year. Photo / Rebecca Zehpyr Thomas

New tricks, harder work and more ad spending might be needed if small to medium-sized enterprises want to outwit some new challenges this summer.

That’s among findings from MYOB’s SME Snapshot, conducted in the shadow of a looming recession predicted for 2023.

The snapshot found the main changes businesses plan include adding new products, increasing advertising, extending opening hours, taking on extra staff and using online retail.

The survey found more than 40 per cent of SMEs are trying different tactics, including broadening product ranges and extending opening hours this year to prepare for a slow year ahead.

“Some of that planning they are putting in now to help prepare for the season could help deliver a late Christmas present to the sector,” MYOB’s Jo Tozer said.

A recession forecast for next year and consistent falling consumer confidence could pose specific challenges, she added.

“Businesses may find they are needing to work harder to convince Kiwis to spend with them over the coming weeks.”

MYOB enterprise head of customer service Jo Tozer. Photo / Supplied

Tozer said the summer holiday period accounts for 20 to 30 per cent of annual revenue for more than 10 per cent of SMEs.

She said almost a quarter of small businesses earned 10 to 20 per cent of their annual revenue just in the summer holidays.

“New Zealand’s business owners are working hard to maximise the impact of such an important trading time.”

Priorities have shifted from last year, when small businesses were focused on Covid-19 restrictions, Tozer said.

Other big concerns last summer were securing adequate stock. But MYOB said businesses could now shift focus to capitalising on demand and growing sales.

MYOB’s Consumer Snapshot this year showed many Kiwis planned to travel domestically these holidays, which Tozer said may be good news for small and medium-sized companies nationwide.

“Hopefully we can expect to see a boost in spending shared around the country with Auckland, Bay of Plenty, Canterbury and Queenstown the key holiday hotspots.”

MYOB worked with American data firm Dynata to survey 515 SME business owners and decision makers across New Zealand.

The data was based on Stats NZ business demographics for gender, region and industry sector.

Industries sampled included the professional and propert sectors, finance and insurance, construction and trades, transport and warehousing, retail, hospitality, manufacturing, tourism, and agriculture.