Navigating the tough financial climate

The New Zealand economy is officially in recession and we know many of our members are doing it tough, particularly small to medium businesses. Here are our top seven tips for navigating the current financial climate.

Double down on your long-term strategy

During tough times, we're so busy focused on the short-term priorities that we often we neglect the future or long-term strategy for the business. Research indicates businesses that can master the delicate balance between cutting costs to survive the current financial crisis and investing to grow their business for the future do well after a recession.

Cut costs

Assess your expenses and identify areas where you can reduce costs. Exploring alternatives to expensive software or renegotiating with vendors for better rates can be a good starting point.

Focus on cash flow

Cash is king during a recession, and you should keep a close eye on your cash flow. Consider implementing a more stringent invoicing process to cope with delayed payments, reducing inventory, or even seeking external funding to help manage cash flow. Look at adjusting to inflation and try to keep your staff if possible given skilled employees have been so hard to find in recent years.


Have you considered diversifying your products, services, or markets to reduce reliance on a single source of revenue? This can help tap into new customer segments or markets, which can help weather the storm of a recession.

Be adaptable

In a recession, SMEs need to be agile and adaptable to changing market conditions. Consider new business models, explore new technologies or even pivot your existing products or services to better align with the needs of the market.

Invest in marketing

Many businesses cut back on marketing budgets in a recession, which can be a mistake. SMEs should consider investing in marketing to reach new customers, increase your visibility, and build brand awareness. Explore cost-effective marketing strategies such as social media or content marketing to reach your target audience.

Overall, the key to surviving a tough financial climate as an SME is to be proactive, flexible, and resourceful. 

Read more