As we continue to live with the impacts of the global pandemic, small businesses across different regions and industries in New Zealand have fared differently. Through Xero’s Small Business Insights (SBI), we’re able to see trends in revenue and employment, and paint an accurate picture of the New Zealand small business economy using real data.
Revenue largely steady nationwide
The latest Xero SBI data for August shows New Zealand small business revenue continued to grow (up 4%), despite the second lockdown in Auckland. This marks the third consecutive month of positive revenue growth for the small business sector.
In Auckland, the second lockdown had an impact though, causing small business revenue to drop to -4.4% year-on-year. Queenstown also remains heavily impacted by border closures, resulting in revenue down -10.8%. However, it was encouraging that all other regions saw their revenue increase year-on-year.
Many industries also saw an increase in revenue in August compared to the same time last year, including rental and real estate (up 11%), manufacturing (up 11%) and construction (up 9%).
The hospitality industry continues to be hit hard, with August revenue dropping 9% year-on-year.
The number of Kiwis employed by small businesses was down 1.4% in August. Small business jobs are now 2.9% lower than they were at the start of the crisis in March. This can, in some part, be attributed to the second lockdown in Auckland which saw food and beverage businesses forced to switch to takeaway and delivery only.
Bucking the national trend, small business jobs in Canterbury are 2.3% above pre-crisis levels, with Wellington at the same level of employment as pre-crisis.
Payment times decrease
The time it takes for small businesses to be paid improved in August. Payment times decreased 0.8 days to 25.1 days – lower than pre-COVID times. This follows a sharp rise in payment times in the early months of the crisis to a peak of 30.8 days. This suggests Kiwis are recognising the importance of paying invoices on time, a positive step towards supporting small businesses in their communities.
What this means for your business
Make getting paid easy
With payment times decreasing, it’s important to capitalise on this. Consider how your clients pay you – are you making it easy for them?
If you’re not already using an online payment service, be aware that there are proven benefits to using one. Small businesses in New Zealand can get paid up to 11 days faster with online invoice payments. Add a ‘pay now’ button to your online invoices to make it even easier for your customers to pay their bills.
Another important way to help you get paid faster is to provide your customers with options to pay. For example, you could offer the option to pay by direct debit, credit card, Apple Pay, or a payment provider such as Stripe or GoCardless. Don’t be put off by the fees involved in providing these services – by getting paid faster it reduces pressure on your working capital, saves admin time on chasing up debts, and frees up cash to pay your suppliers or staff.
The brain gain
Because of COVID-19, more than 50,000 Kiwis have returned home from overseas since March. The pool of available talent is getting a refresh of experiences and skills that we haven’t had for a few years. It’s a massive opportunity for New Zealand to improve our innovation through new creation of ideas as people move between jobs, across sectors and now with an international lens.
So, if you’re one of the lucky businesses in the position for growth, be aware that good talent is available right now. Take a look at what your business might need and make use of this growing talent pool.
Talk to your advisor
Building a support network, starting with an advisor or business coach, can make a huge difference to the success of your business.
Your accountant or bookkeeper should always be your first port of call for advice on your specific circumstances. They know your business finances in and out and will be able to offer you rich advice on areas of improvement.
If you don’t have an accountant or bookkeeper, you can find one that’s right for you in the Xero advisor directory.