Small businesses need more support from governments, universities, and consumers.
In a recent article published by The Conversation, rising costs, slow demand, tariff tension, digital disruption, and inflation have significantly affected small business owners to the point of closure.
Some statistics to consider:
Australia’s CommBank shows nearly eight in ten Australian SMEs have struggled with cash flow issues over the past year.
Kiwibank found that 52 per cent of businesses reported stronger finances, and 43 per cent have seen higher customer spending, but these were mainly for larger firms
Why This Matters
Small businesses are crucial to the New Zealand economy, employing 31 per cent of Kiwis. A thriving SME sector uplifts the county’s economy and promotes the well-being of communities, innovation and competition.
Unfortunately, there is an uneven playing field for many small business owners. Larger firms have secured their financial position in a tough market, mostly at the expense of SMEs.
For example, larger businesses in Australia can now delay payments by up to 90 days, which threatens the cash flow for many small suppliers. This, coupled with the cost of compliance for government regulations, has put small businesses at a disadvantage.
What Can Be Done?
Supporting small businesses is a collective effort. Governments should increase their efforts in providing tailored advice to small businesses and help them connect with their surrounding ecosystems. Many entrepreneurs, particularly immigrant business owners, often lack access to markets, finance, and information.
For example, the UK and Singapore governments have released packages and grants to help small businesses improve access to finance.
Proactive public policy is only one piece of the puzzle. Higher education institutions should also collaborate with small businesses by supporting them with valuable research and upskilling. This helps create more opportunities for these businesses to stay competitive.
Lastly, the article calls for large businesses and customer support. Larger businesses can utilise the agility of startups in their ventures and give these businesses the recognition they deserve. Supporting small businesses through buying their products, however, remains one of the greatest ways to keep them afloat.
Key Takeaway
As SMEs navigate uncertainties, protection is one of the best forms of prevention. Business owners should consider proactive risk management measures and always work with a partner they can trust.
Bonded NZ helps business owners stay ahead of risk with comprehensive, tailored business insurance. If you’re looking to protect yourself and your business, we offer a range of products at different price points suitable for your needs.
For more information about our types of cover, contact our team today.
