Riding The Bumps
What NZ SME Owners Should Know About the Slowing Recovery
If you run a small or medium-sized business in NZ, chances are you’ve been keeping a quiet eye on the economy lately. Maybe you’ve seen fewer customers walking through the door, or suppliers raising prices (again). You might have read last week’s headlines about a “slight recovery” in GDP and wondered - Really? Because it sure doesn’t feel like it.
You’re not imagining things. While the official stats showed a tiny bit of growth in the March quarter, most economists agree that momentum isn’t likely to last. And for those of us in the business trenches, the real story is what’s happening right now and how it might affect us in the months ahead.
So, let’s unpack what’s going on, what it means for your business and how we can respond in a way that’s smart, sustainable and maybe even a little hopeful.
The Recovery - with a Big Asterisk
Yes, the March quarter figures were marginally better than expected. But those numbers are already three months old. Since then, the world’s gotten messier. There’s war in the Middle East, oil prices have surged, the Kiwi dollar is wobbling and the U.S. is throwing tariffs around again. All of this filters down to us - whether through higher costs, disrupted supply chains, or just more general uncertainty that makes people hold back on spending.
Kiwibank economist Mary Jo Vergara summed it up well - we’re still crawling out of the economic hole we fell into last year and it looks like we’ll be crawling for a while yet.
The Real Impact on Small Business
Let’s be honest - big-picture economic stats often don’t reflect what’s happening in the day-to-day life of an SME. Right now, a lot of us are feeling the squeeze from all sides -
Customers are cautious. People are spending less, holding off on non-essentials, and watching their wallets.
Costs keep climbing. Fuel, freight, rent, raw materials. It all adds up.
Confidence is shaky. Even traditionally strong regions like Waikato and Taranaki (home to lots of dairying) are reporting low employment confidence.
And here’s the kicker. Unlike big corporates, most SMEs don’t have layers of reserves or a big finance department to fall back on. We feel changes quickly and deeply.
So What Can You Do About It?
The short answer? Stay alert, stay flexible and don’t try to go it alone.
Here’s a longer take - with some practical steps you can put into play now -
1. Rethink your costs - but not your core values
Start by trimming the fat, not the muscle. Are there subscriptions or overheads that no longer serve you? Can you negotiate with suppliers or explore alternatives? But whatever you do, don’t cut the things that define your business like your integrity, your people, or the quality your customers rely on.
Values matter more than ever in times like these. Customers will remember how you showed up.
2. Talk to your customers - and really listen
This isn’t the time for hard selling. It’s the time to understand what your customers are dealing with and how you can support them. Maybe that’s offering smaller packages, more flexible payment terms, or just being a reassuring voice in their inbox.
If you’re unsure what they need, ask. You’ll likely find loyalty in the asking alone.
3. Do some simple scenario planning
This doesn’t need to be overly complicated. What would a 10% drop in sales mean for your bottom line? How long could you operate if costs went up again? Mapping out a few basic “what ifs” now will help you respond faster if things shift suddenly.
And if you haven’t already, chat to your bank or accountant. Explore funding options before you need them. It’s always easier to get support when things are steady-ish.
4. Stay agile - and be open to small pivots
This might be the moment to try something new. Could your existing skills or assets serve a slightly different market? Is there a simpler or digital version of what you already offer?
Innovation doesn’t have to be flashy. Sometimes it’s just tweaking your delivery or repackaging your service in a way that fits the moment.
5. Connect with others - even your competitors
One of the silver linings of tough times is how often they bring people together. There’s strength in collaboration. You might find ways to cross-promote with nearby businesses, share resources, or simply swap ideas and encouragement.
Business can feel isolating, especially during economic slumps. Don’t underestimate the value of community, formal or informal.
Looking Ahead
There’s no sugar-coating it, the next few months may be bumpy. The June quarter isn’t looking strong, inflation could creep back up and global uncertainty is likely to keep markets on edge.
But here’s the good news. If you’ve made it this far, you already know how to adapt. You’ve weathered disruptions before and each challenge has likely sharpened your instincts, clarified your values and shown you who your real supporters are.
So keep going. Keep listening. Keep evolving and know that resilience isn’t just about survival. It’s about learning, responding and leading with heart.
This recovery might be slower and stranger than we hoped, but with the right mindset and community around us, we can shape something better on the other side.
In a nutshell -
Be smart with your costs, but don’t abandon what makes your business your business.
Stay close to your customers and open to their changing needs.
Prepare for different outcomes without panicking.
Pivot where it makes sense.
And most importantly, stay connected.
Hard times test us, but they can also transform us for the better.
If you’d like a confidential, free of charge, free of obligation conversation about your business, here’s how to get me.
📞 Phone +64 275 665 682
✉️ Email john.luxton@regenerationhq.co.nz
🌐 Contact Form www.regenerationhq.co.nz/contact
If you’d like to read more RegenerationHQ thinking on SME business and other things, go here – www.regenerationhq.co.nz/articlesoverview
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Supporting NZ SME Owners to Exit Well, Lead Better and Build Business Value.