It’s been two weeks since we entered the much anticipated Alert Level 2, allowing the majority of us to open our doors (virtually or physically) again and trade as hard and fast as we possibly can to make up for lost time.
I hope many of you are enjoying the fruits of the pent-up demand that has resulted from stalled dealings and purchases over Alert Levels 3 and 4. For some of you, it will feel like Christmas – a great feeling that will come as a huge relief and will help to refill those confidence tanks. We really hope all of you are getting the custom you deserve as hard-working entrepreneurs.
But (you sensed there would be a ‘but’ right?!), I’m coming to you this week with a concerned word of warning; Now is not the time to be complacent. Yes, that income sheet should be looking a lot healthier, but please don’t fall into the trap of believing we are out of the COVID-19 woods. We’re not.
So, what’s the worst thing you can do in Alert Level 2? Be apathetic. By all means, make hay while the sun shines, but don’t forget….winter’s coming.
Apathy is your enemy
We celebrate alongside all of you cashing in on renewed spending, as well as productivity impacts borne from new ways of working crafted during lockdown. This much needed injection of cash flow into our economy is just what the doctor ordered.
Unfortunately, however, this surge in spending is lulling some kiwi SMEs into a false sense of security when it comes to the economic impact COVID-19 is yet to have. We don’t want to rain on your parade, but the reality is we haven’t seen the worst yet. We expect this uplift in spending to start to fade shortly and anticipate significant upward moves in unemployment over the coming months.
Don’t be the fool that rests on your Alert Level 2 laurels.
So, what should we expect and what can we do to protect ourselves?
In short, expect a recession worse than the Global Financial Crisis of 2007-2008. We detailed these predictions in our webinars and we stand by them. Unemployment levels and reduced spending power will hit small to medium businesses hard. But there are things we can do to soften the blow.
- Plan ahead with your accountant. Any accountant worth their salt will be well aware of the state of the economy and what this is likely to mean for your business and industry. Ask your accountant to work with you on a strategy to soften any future blows to cash flow.
- Take advantage of tax relief packages. In addition to subsidies for loss of income, the Government is offering tax relief packages, allowing you to hold on to tax payments for longer to help boost your cash flow. Again, your accountant should be discussing these options, as well as the merits of tax pooling, with you. If they aren’t, call us pronto. Sounds like you need a real growth accountant.
- Stay connected: In tough times we need to stay connected and, thanks to modern technology, that’s 100% possible. GROW NZ’s reason for being is to connect people and help kiwi businesses thrive, and we promise to keep those lines of communication open, through good times and bad. We’ve set up an online Facebook community for business experts and business owners to work together and share ideas and support. If you’re scratching your head over an issue, want an opinion on an idea, or just need to know you’re not struggling alone, these will be your people. Let’s rally together and support each other. Who knows what collaborative opportunities could arise?
- Let data be your guide. Don’t make any decisions without data. There’s no need to guess what could happen to your business during the impending recession. The answers are all there for the taking, you’ve just got to know how to access them. External data-led insights can help you identify exactly what your target consumers are looking for and how much they are willing to spend. You can even scope out what your competitors are up to at the same time. Grow Digi can help with all your data mining and data-led marketing questions.
Data insights at the click of a button.
We have just received an exciting new release from our technology partner, SEMrush which generates data insights across markets and industry competitors. Check out this graphic below to see the types of results you can generate using SEMrush systems, and connect with them if you’d like this done for your business.