Cautious optimism, confidence driving business owners
Liz Wotherspoon delivers a unique perspective on New Zealand’s SMB sector. As we leap into 2023, The Icehouse team is building on the results of our November 2022 Pulse Check Survey, which gathered insights and reflections on the past two and a half years from more than 300 New Zealand SMBs. The narrative surprised a […]
Liz Wotherspoon delivers a unique perspective on New Zealand’s SMB sector.
As we leap into 2023, The Icehouse team is building on the results of our November 2022 Pulse Check Survey, which gathered insights and reflections on the past two and a half years from more than 300 New Zealand SMBs.
The narrative surprised a few, brought optimism to many, but most importantly sets a momentum to be cautiously optimistic about what businesses need and want for the next 12 months.
Given the challenges and opportunities they have faced over the last couple of years, the story is heartening – 58 percent of survey respondents saw their annual revenue increase since Covid and, for 32 percent of those, the increase was quite significant.
However, 35 percent of surveyed businesses had financial losses in the past two years, and 65 percent of respondents are concerned, or very concerned, about what the next 12 months holds.
Recruitment, supply chain, and issues around wellbeing rank high, and there are immediate and pressing financial concerns around increases in supply costs, managing cashflow, price increases for customers and exchange rate fluctuation.
Leaning into the next 18 months, our network is communicating that financial worries will carry over into 2023 and beyond. ‘Money’ concerns concern us all. It is becoming increasingly challenging for owners as they face into some fairly strong headwinds related to inflation, interest rates, cost of living and the impact of global events.
Despite the headwinds being strong, at The Icehouse we’re picking up a sense that our alumni are displaying characteristic grit and resilience, are seemingly more confident, or maybe more cautiously optimistic and better equipped to respond to the current circumstances, because of some of what they’ve experienced in their journey with us.
Their awareness is high, and there’s more discipline around the kind of scenario planning that we’ve been talking to them about. In short, they are looking at what the worst-case scenario might look like and the different scenarios that might play out while at the same time staying focused on their goals and remaining confident they will achieve them.
Using a sporting analogy, they are focused on taking all the right defensive action but using the challenge and uncertainty to incite action around the opportunities. This is helping them adapt to the crosswinds – 51 percent of respondents plan to focus even more on growth in the coming year but are aware of the financial considerations and structural constraints that can hinder that growth. So, they’re playing both defence and offense.
Due to the events of the past two years, we expect capital raising to become more of an issue for the owners who are looking to consolidate. Entrepreneurs and owners should not be afraid to seek the money and investment they need. This comes with a caveat – as always, any financial decisions must be underpinned by the best professional financial advice available.
Small and medium enterprises have been our reason for being for more than 21 years. We are committed to continuing our place in the SME business ecosystem by giving a voice to our alumni.
Here are three perspectives to carry through 2023:
- We’re seeing a very satisfying and greater willingness by our owner manager customers to ask for help and advice when they need it. In our experience, once they’re on a journey with us they are more willing to pick up the phone or send an email to seek assistance through coaching, training and upskilling.
- There’s energy going into attracting enough good people, keeping the great people businesses already have, becoming more digitally savvy, investing in tech, and making themselves more efficient and more attractive to clients.
- Building financial acumen and fixing their finance function also sits somewhere on their to-do list. I encourage owners and their teams to seek financial acumen training to enable better decisions and smarter and more effective long-term financial planning and outcomes, which will also undoubtedly benefit the short and long-term financial performance of the business.
As we’ve seen from the more than 4,000 Kiwi business owner managers and leaders who’ve experienced The Icehouse since 2001, owners are determined. They have grit, they’re street smart, they’re resourceful and they’re resilient – but they shouldn’t have to do it all themselves. It’s okay to ask for help because you don’t know what you don’t know.
And that’s a great starting point for a discussion.
Liz Wotherspoon (pictured) is CEO of The Icehouse, which provides capability development solutions and business experts for Kiwi businesses. www.theicehouse.co.nz