Small business research from Xero shows how slower sales, wage growth and other factors have impacted the performance of small businesses. The Xero New Zealand Small Business Index, a single measure that shows changes in the performance of small businesses from month to month, dropped by 38 points between November 2022 and January 2023, and the time to be paid rose to 24.5 days, the longest since September 2021.

But businesses experiencing hardship are not alone in finding a way forward; here are five tools, techniques and resources to get back on the track to growth.

1. Access online resources

The New Zealand Government’s business.govt.nz website contains a wealth of information that can support small businesses going through hard times. The website covers topics such as creating a business plan, hiring and managing staff, cash flow forecasting and extreme weather advice. The portal provides advice to handle insolvency and involuntary closure, should it come to that.

The Prospa blog contains, among other resources:

Tips from accountants and business advisers about how to manage a late tax return or choose a lending product

Anecdotes from small business owners about how they’ve stopped their businesses losing money, started using generative AI tools, planned for disasters and hired the staff they need

To reach a wider audience, drive sales and boost cash flow in the long-term, Jason Moore, owner of cafe and coffee roastery Vanguard Coffee, has taught himself about SEO, Google Analytics and Google Business Profile.

“If you want to be more than just a local business, having a great understanding of the online world is key,” he says. “I have done courses and watched YouTube tutorials to better understand where people are coming from, what they’re after and how they’re finding us.”

2. Seek an expert’s opinion

If you’re concerned about the long-term health of your business, consider hiring a small business consultant or financial adviser.

A consultant can help identify areas for improvement, formulate long-term growth strategies and teach you the necessary skills to help you implement changes.

Consider a consultant with the right subject matter experience, and ideally with expertise in your industry and with businesses of similar size. Even better if you can find one with a proven track record of helping small businesses grow.

3. Manage unpaid invoices

If late payments from customers or clients have contributed to uncertainty around your financial situation, consider ways to get invoices paid faster.

You can consider making a claim at the Disputes Tribunal in response to a disagreement about goods, services or invoicing. A more costly option is going to the District Court to get someone to pay their debt.

In extreme cases, a debt collector may chase overdue bills on your behalf. They will issue a letter of demand, which if ignored entitles them to pursue legal action against the debtor.

Becky Erwood’s tip for getting paid faster is to streamline the process.

“Use an automated invoicing system to send automatic reminders when payments are due or overdue,” suggests Becky, who is co-director of FED.

Meanwhile, Craig Gardiner of Small Business Accounting says to get onto it straight away.

“We invoice as soon as the job is finished,” he says. “Don’t wait until the end of the month.”

4. Consider insolvency options

It’s worth considering all your options before giving up on your business completely, but if your business’s debts become unavoidable, bankruptcy may be an option to help you recover.

The New Zealand Insolvency and Trustee Service provides information about and support with insolvency for small businesses, including determining your debt, comparing insolvency options depending on your business structure – because your options may vary if you’re a sole trader versus a limited company – and the effect of liquidation on employees and business partners.

Before proceeding with insolvency, you could also seek help from your accountant to see if you can get some more time from creditors. The next step is going into voluntary administration, in which an administrator will be put in charge of your business, or a receivership, where a secured creditor appoints a receiver to ensure repayment of debt.

The final step is liquidation, in which the business is wound up and assets are sold to repay debts.

Awhina Kingi has first-hand experience of turning around negative cash flow for her specialty seeds and giftware business Aunts Garden.

“I was losing money; the website fees cost more than I was earning,” she says. “It was a shock, and I went into panic mode by offering free shipping, discounts and giveaways to encourage sales. This resulted in a short uptick in sales but, in the long run, caused more harm than good as we lost money on shipping.

“I reached the point where I had to decide if this was a sustainable business or if I needed to shut it down.”

To turn things around, Awhina reviewed costs and tested new advertising strategies on Facebook, the source of most of her customers. She also studied her sales reports and customer cart activity.

5. Contact Prospa

You can submit an enquiry or call 0800 005 797 during business hours to discuss your options with one of our business lending specialists.

If you’ve missed a payment on your Prospa Small Business Loan or Business Line of Credit because of reduced cash flow, make up the payment by logging into Prospa Online.

After logging in, you will see a notification to make up for a missed repayment. Simply follow the prompts to complete the payment. Missed payment penalties and late fees may apply.