It has been another year of uncertainty for many New Zealand business owners. While inflation has eased and interest rates have started to fall, businesses are still dealing with rising costs, cautious consumer spending and ongoing global uncertainty.

The latest ANZ Business Outlook Survey offers some encouraging news, with business confidence improving by 21 points in May to +10. While that’s a welcome recovery after the sharp decline seen in March and April, confidence remains well below the levels businesses enjoyed before recent global events disrupted markets.

The good news is that confidence doesn’t have to determine your success. The businesses that perform best during uncertain times are often those that focus on what they can control and make informed decisions based on reliable financial information rather than headlines.

Here are four practical ways to strengthen your business, regardless of the wider economic environment.

1. Protect your margins, not just your revenue

When costs continue to rise, increasing sales alone isn’t enough. It’s your profit margins that determine whether your business remains financially healthy.

Now is an excellent time to review your pricing, analyse the profitability of your products and services, and identify areas where unnecessary costs or inefficiencies are reducing your returns. Rather than cutting costs across the board, focus on reducing waste while continuing to invest in the parts of your business that generate the greatest value.

Automating repetitive administrative tasks, reviewing supplier contracts and improving business processes can all help protect your margins without compromising the quality of your customer experience.

2. Improve productivity by making better use of your resources

The survey also highlights that many businesses continue to experience challenges finding skilled staff. Instead of relying solely on recruitment, consider how you can get more from your existing team and systems.

Upskilling employees, introducing more efficient technology and aligning staffing levels with customer demand can improve productivity while helping to manage wage costs.

Artificial intelligence and cloud-based business software are also creating opportunities to streamline administration, reduce manual work and free up valuable time to focus on activities that generate revenue and improve customer service.

3. Focus on the customers and markets that offer the greatest opportunity

While some industries continue to face difficult trading conditions, others remain relatively resilient. Understanding where demand is strongest allows you to focus your marketing and sales efforts where they are most likely to deliver results.

Review your customer base to identify your most profitable clients and consider whether there are opportunities to expand into industries that continue to perform well. For some businesses, this may also be the right time to explore export opportunities or diversify the products and services they offer.

Economic conditions will always change, but businesses that remain flexible and responsive are generally better placed to adapt.

4. Strengthen your cashflow and plan ahead

Access to finance can become more difficult during periods of lower confidence, making cashflow management more important than ever.

Review your debtor management processes, invoice promptly and follow up overdue accounts early. Consider delaying non-essential capital expenditure if it will place unnecessary pressure on cash reserves.

Most importantly, prepare a rolling cashflow forecast covering the next three to twelve months. Knowing what your cash position is likely to look like gives you time to address potential funding gaps before they become major issues.

Scenario planning can also help you prepare for different outcomes. By modelling best-case, expected and worst-case scenarios, you’ll be in a much stronger position to make confident decisions, whatever the economy throws your way.

Keep measuring what matters

Economic headlines can influence confidence, but they shouldn’t dictate every business decision.

The most successful businesses regularly monitor the key performance indicators that drive their own success. Tracking measures such as revenue, gross profit margins, operating expenses, debtor days, cashflow and net profit provides far greater insight than relying on national confidence surveys alone.

Having accurate, up-to-date financial information allows you to identify opportunities earlier, respond to challenges more quickly and make decisions with confidence.

We’re here to help

Periods of uncertainty often create opportunities for businesses that are prepared.

If you’re unsure how your business is performing or would like greater confidence in your financial decisions, we’d love to help. We can work with you to review your profitability, strengthen your cashflow, prepare realistic forecasts, develop practical budgets and build a business plan that supports your long-term goals.

You don’t have to navigate changing economic conditions on your own. With the right financial information and a clear strategy, you can make informed decisions and move your business forward with confidence.