The research shows some businesses were scaling back their operations to reduce costs, some were seeking professional advice, and others were still negotiating with clients to receive payments faster to maintain a steady cashflow. (file image) Photo: 123rf
Small business firms (SMEs) are less confident about the future than they are about their current conditions.
Research by Retail Finance Intelligence, commissioned by small business lender Prospa, indicates little change in short-term business confidence in the years since the 2020-peak, but fewer were confident about the outlook five to 10 years ahead.
Short-term business confidence for the next 12 months was steady at 53 percent, but the long-term outlook fell to 51 percent, with nearly half of all SMEs expecting a decrease in turnover in the next year.
Prospa New Zealand managing director Adrienne Begbie said businesses should seek professional advice to create strategies for longer-term resilience.
"These are indeed challenging times and businesses need to identify how they can reduce costs and maximise profits, as well as looking at what support may be available for them," she said.
The research shows some businesses were scaling back their operations to reduce costs (24 percent), some were seeking professional advice (22 percent) and others were still negotiating with clients to receive payments faster (20 percent) to maintain a steady cashflow.
More than two-thirds of businesses said supply chain costs (67 percent) and labour costs (63 percent) had been increasing, while the need for investment to generate cashflow affected more than half of businesses (57 percent).
Begbie said there was an increase (10 percent) in concerns about economic and regulatory factors, along with falling customer demand and cashflow.
Staffing was still a concern for 13 percent of small businesses, but well down from May 2023 (21 percent).