Small and medium-sized businesses play an outsized role in New Zealand’s economy, and account for about 90 per cent of Transporting New Zealand’s membership. When these businesses come under pressure, the ripple effects continue to spread through the wider community.
New research by Xero has revealed small businesses are facing “significant signs” of financial stress, according to a report in Stuff last week.
“Cash flow challenges remain a headache for SMEs, with the emotional and physical impacts of cash flow management taking a toll on many,” the report found.
About 80 per cent of surveyed business owners reported feeling stressed. Almost half the small business owners surveyed by Xero, and 60 per cent of sole traders, were not paying themselves, so they could keep their businesses running.
“Cash flow is one of the biggest challenges small businesses are facing,” said Xero NZ country manager Bridget Snelling. “When you add in inflation, climbing interest rates and reduced spend from consumers, small business owners are walking a tightrope every day.
“When small business owners experience cash flow issues one of the first things to go is their own pay, followed by an inability to pay suppliers which has a ripple effect throughout the economy.
“It’s a systemic and volatile cycle, which sees business owners dipping into their own personal savings, working unattainable hours, and ultimately sacrificing their emotional and physical wellbeing to stay afloat.”
Transporting New Zealand is well aware that financial pressure is a big concern for transport operators, which is why we developed our new Cost Model tool this year. The Cost Model, which is free to members, helps businesses understand their costs and their income so they can remain sustainable and profitable.
The model uses the data from a business’s actual costs so that operators gain the most complete view of the financial performance of the road transport part of their business.
We believe that building your financial knowledge and capability will pay off in the long run. Remember, our Regional and Sector Team is just a phone call or email away and can help guide you in how to get the model up and running.
The cost of living crisis and inflationary pressure are just some of the stresses impacting on transport businesses. The poor quality of our roading network is also a major concern. As the election draws closer, I am pleased that political parties seem to be heeding Transporting New Zealand’s call to make roading a priority.
Food, medicine, fuel, livestock, building materials – in fact, almost anything you can think of – relies heavily on road transport, so a quality, reliable network that enables that to happen in a safe and efficient way is critical to our success.
We’ve seen the terrible disruption to people’s lives created by recent natural disasters such as the flooding in Northland and Cyclone Gabrielle, and climate experts are predicting this will only get worse. We’ve also seen a deterioration in road surface quality across our network.
Things aren’t working and we simply won’t survive if we can’t reliably move people and freight. Given the importance of this it would be irresponsible for any government not to be seriously committing to make positive changes.
I acknowledge our recent history with road construction hasn’t been great in keeping to cost and delivering on time but those problems can be fixed and they certainly aren’t a good reason for not progressing a better road network being built.
However, we are still waiting for the release of the Government Policy Statement on Land Transport, which is now not expected before the end of August – a month overdue. It is vital that roading receive adequate funding. For those concerned about that large spend, I’d ask them to think about the risk to people’s lives and our future generations if we don’t allocate and spend that money well.
Find out more about the Cost Model on our website here. And you can find more information on our 2023 Election Platform here.
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