Lately, many New Zealand businesses have experienced tough trading conditions. But the tide may be turning, suggesting that now may be a good time to consider investing in business growth.
New research from 2degrees found that levels of optimism are starting to tick upwards, with a growing number of businesses indicating that they aren’t just surviving. They are beginning to thrive.
While many are still hurting from rising operational costs, they say they want to move forward instead of sitting still. So, what options do businesses have to fuel growth?
1. Investing in digital skills
Many are eyeing the digital space. The 2degrees research shows that 63% of New Zealand businesses plan to invest in better use of technology over the next year, with 23% admitting they don’t possess the digital skills needed to help their businesses. Their major motivations were to automate their processes to boost productivity, followed by digital upskilling and artificial intelligence.
2. Curbing late payments
Late payments are also likely to be on the agenda, given that research by Xero indicates that these are among the biggest contributors to a business’s cash flow troubles. Here, Xero believes there are plenty of opportunities for improvement.
It recommends investing in digital tools that help forecast periods when cash flow typically dips into the red. Also useful are tools that enable businesses to invoice customers as soon as an order has been completed and to organise automatic follow-ups when payments are missed. Plus, the technology often includes features like “pay now” on all invoices providing customers with more ways to pay instantly.
Technology aside, there are other ways to expedite payments. These include charging interest on late payments and incentivising on-time payments. To take the sting out of late payments, businesses could also consider invoice finance. It helps businesses turn their outstanding customer invoices into a source of readily available funding to help their businesses grow.
3. Improve productivity
New data from Xero shows that labour productivity in New Zealand remains below pre-COVID levels, putting additional pressure on business’s bottom lines and making it harder to lift wages and keep prices low.
Xero believes businesses need to be working smarter, not harder or longer. One way to improve productivity is to digitalise. As an example, the New Zealand Institute of Economic Research says a 20% jump in the number of businesses adopting cloud-based business tools in the future could add up to $7.8 billion to Aotearoa’s annual GDP through improved productivity.
And a 2021 Xero study revealed that small businesses which readily adopted new technology reported enjoying 106% higher productivity than those that repeatedly failed to do so.
4. Invest in marketing
A 2024 study by online marketing company, Constant Contact, shows that businesses in New Zealand know they need to do more marketing to survive economic headwinds. It also indicates that they are more likely to spend more time and money on marketing and to increase their number of marketing channels this year than their counterparts in Canada, the UK and the US.
The researchers noted that business owners often lack the knowledge and time needed to market their businesses. In addition, marketing is often the first place they look to when they need to conserve cash in tough times even though investing in marketing can increase loyalty and attract new customers when it is most needed.
Many businesses use email marketing as their primary marketing channel, followed closely by social media. But Constant Contact says these channels work best when used together with other marketing efforts, such as SMS and events.
Finding a growth funding solution to suit your business
Looking for a funding solution to suit your unique business needs can be challenging. For a business owner, the three most important things to consider are speed, flexibility and the product’s fees, terms and conditions. Do your research and choose carefully to ensure you’re making the right decision for your business.
Grow your business with ScotPac
ScotPac has been helping New Zealand businesses grow and thrive with fast, flexible funding solutions for three decades. Our unique market knowledge and industry leading financial products and services are designed to help businesses bridge cash flow gaps, minimise late payments and capitalise on their biggest asset: their balance sheet.
To find out more about our Invoice Finance, Trade Finance, or Business Loan solutions or to discuss your goals for your business, get in touch with ScotPac’s lending specialists today.
