“Business confidence lifted 21 points in May, but at +10 it is still well down on levels prevailing before the Middle East conflict.”

ANZ Business Outlook survey, May 2026

The mid-2026 ANZ Business Outlook surveys show it’s been a volatile year for Kiwi enterprises. Following a sharp plunge in business confidence in March and April – mainly due to global trade disruptions – confidence has staged a modest recovery to +10 in May 2026.

But with confidence still low, what can your NZ small business do to reenergise your strategy and regain some of that entrepreneurial zest?

We’ve outlined four key ways to push forwards when business confidence is low.

1. Protect Your Margins Against High Costs

The ANZ survey highlights a significant gap between rising costs and weak profit expectations. To overcome this, you need your operations to be tight and efficient. Think about automating manual tasks and renegotiating vendor terms to preserve cashflow and protect profit margins.

2. Optimise Your Productivity

Data from the survey shows that it’s increasingly difficult to find the right staff. To offset this, try upskilling your existing staff and aligning your staffing rosters directly with demand. This helps to control your wage bills without losing your ability to react to the market.

3. Move Towards More Resilient Customer Segments

While results for the domestic retail and construction sectors drag down general confidence levels, sectors like manufacturing and agriculture show greater resilience. Shift your marketing or B2B focus toward these steadier industries, or explore international export options to bypass the slowdown in domestic consumer spending.

4. Find New Ways to Fund and Extend Your Cash Runway

Getting access to credit can be a challenge. To overcome this and improve your liquid cashflow, think about tightening your receivables process, pausing non-essential capital investments and looking for other ways to fund and finance the next stage of your growth.

Need Help Strengthening Your Business Strategy?

If you’re struggling with low business confidence and a strategy that’s no longer fit for purpose, come and talk to our team.

We’ll work with you to refine your strategy and overcome the current challenges.

Starting your own ‘side hustle’ can be an exciting project and a great way to see if your new business idea has legs in the current market.

But could your side hustle actually turn a profit? And is there a demand for the product or service you’re offering?

Five Important Questions to Ask Yourself Before Launching Your Side Project

1. Is there a demand in the market?

For your business to function, you need paying customers. Start off by researching whether your target customer audience exists and if this demographic is willing to pay for your solution. Go beyond polite feedback from friends; look for hard evidence like pre-orders, competitor engagement or active search traffic for your product or service.

2. Is the business financially viable?

Work on the numbers to make sure the finances add up. This means checking that your pricing strategy comfortably covers things like direct expenses, software subscriptions and any future tax obligations. A side hustle must generate enough revenue to turn a true profit after accounting for all recurring operational costs.

3. How much will it cost to acquire customers?

People need to know your business exists, so marketing is essential. Think about a realistic budget and the potential time required for marketing, advertising and organic content creation. You need to know exactly how much it costs to acquire a single customer to ensure your promotional costs won’t instantly drain your startup capital.

4. What’s a realistic profit target?

To make your side-hustle efforts worthwhile, you’ll want to know that your side project can actually turn a profit. Set a realistic net profit goal based on running the business as lean as possible to begin with. Aim to clear your initial baseline operational costs within the first six to twelve months, and set yourself a clear profit milestone to hit in the longer term.

5. How much time will your side hustle take up?

Starting a side project while still working another job can be a major time commitment. Look at your existing weekly schedule to confirm you can realistically commit 10 to 15 hours for operations, customer service and admin. It’s also vital to check that this extra workload can be sustained without causing burnout or compromising your primary employed role.

Let’s Make Your Side Hustle a Business Reality

If you’ve got an idea for a side project or second business, come and talk to our team.

We’ll help you work out the financial viability of the business and build a business plan that factors in your marketing, customer acquisition and revenue generation factors.

Why Your Small Business Needs an Evolving Strategy

Every business owner wants to see their company grow, adapt, and succeed. But achieving long-term success doesn’t happen by chance—it starts with having a clear business strategy.

The challenge is that many businesses create a strategy once and never revisit it. In today’s fast-changing business environment, that’s no longer enough.

Why Does Your Business Strategy Need to Evolve?

Your business strategy isn’t a static document that gets filed away after it’s written. Instead, it should be a living roadmap that evolves alongside your business, your customers, and the wider market.

An effective strategy is flexible, agile, and responsive to change. As new opportunities emerge and challenges arise, your strategy should help guide your decisions—not hold you back.

Five Reasons Why an Agile Business Strategy Is Essential

1. Navigate Market Uncertainty with Confidence

Economic conditions are constantly changing, and unexpected challenges can arise at any time. An agile strategy allows your business to respond quickly, helping you adapt operations, minimise risks, and stay on course even during uncertain times.

2. Gain a Competitive Advantage

Businesses that react faster than their competitors are often the ones that succeed. By building flexibility into your strategy, you’re better positioned to seize new opportunities, respond to industry changes, and stay one step ahead.

3. Lead Your Business Responsibly

As a business owner or CEO, one of your key responsibilities is ensuring the long-term success of your organisation. Regularly reviewing and refining your strategy helps you make informed decisions, invest wisely, and keep your business aligned with changing market conditions.

4. Stay Focused on Your Growth Goals

Your strategy acts as a roadmap for achieving your business objectives. By continually reviewing your goals and adjusting your direction where needed, you can scale your business more effectively and maintain momentum toward sustainable growth.

5. Keep Your Business Relevant

Customer expectations, technology, and market trends never stand still. Treating your strategy as an evolving plan ensures your business remains relevant, innovative, and ready to respond to both local and global changes.

Is It Time to Review Your Business Strategy?

If your business strategy is sitting in a desk drawer or buried in an old PowerPoint presentation, now could be the perfect time to revisit it.

Refreshing your strategy doesn’t mean starting from scratch—it means ensuring it reflects where your business is today and where you want it to go tomorrow.

Let’s Build a Strategy That Grows With Your Business

Our team can help you review, refine, and strengthen your business strategy, ensuring it has the flexibility needed to adapt to change while keeping you focused on your long-term goals.

Whether you’re planning your next stage of growth or simply want to ensure your business stays competitive, we’re here to help.

Get in touch today to book a business strategy review and discover how an evolving strategy can position your business for long-term success.

Healthy sales revenue numbers don’t always mean your small business is profitable.

It’s easy to mistake rising sales and income for profitability. But unless you understand your operational costs, profit margins and net profit, you won’t truly know whether the business is making long-term, sustainable profit.

What is sales revenue?

Sales revenue is the total amount of money your business brings in from selling products or services over a specific period. Crucially, though, revenue is calculated before you subtract any operational expenses, taxes or deductions.

Revenue tells you how much money came in, but it doesn’t tell you how much you have left!

What is net profit?

Net profit is your ‘bottom line’. It’s the actual take-home money left over from your company’s total sales revenue after every single operating expense, tax, interest payment and cost is paid.

This net profit figure reflects how much will be left in the pot, once you make all the unavoidable deductions that are part and parcel of running and operating the business.

What’s the best way to track your profitability?

So, if you’re looking to truly grasp the profitability of your business, relying on a cursory glance at your sales revenue figures is not the best approach.

As we’ve seen, revenue is the total cash your business pulls in from sales. But net profit is what you actually get to keep – it’s the money remaining to pay your directors’ dividends, for reinvesting in the business and for increasing your cash reserves.

Helping your business drive the very best profits

When you’re trading as a business, there are unavoidable expenses, costs, deductions and taxes to pay. So it’s vital to factor these deductions into your financial overview.

Come and talk to our team about tracking your net profit number and adding this all-important metric to your dashboards and regular financial reporting.

“At a time when many New Zealand families and businesses are still under pressure from higher living costs and global uncertainty, this Budget takes careful steps to support New Zealanders now while strengthening the economy for the years ahead”

Hon. Nicola Willis, Finance Minister, Budget 2026

On 28 May 2026, the Finance Minister, Nicola Willis, stood to deliver Budget 2026 to the House of Representatives.

The Budget was heralded as ‘a responsible Budget to secure NZ’s future’. But it’s also a Budget delivered at a point when the New Zealand economy, the Middle East crisis, fuel shortages and widespread unemployment are making it challenging to balance the books.

Let’s look at the economic outlook, the main announcements and where any measures have been introduced that could affect your small business.

The Main Economic Outlook

The big takeaway was the Government’s forecast that New Zealand will return to surplus in 2028/29, removing the current debt and providing greater funds to invest in key infrastructure projects and the future prosperity of the country.

The key economic forecasts:

• New Zealand economy to grow by an average of 2.7 per cent over the next four years.
• Unemployment forecast to fall from 5.5 to 4.3 per cent.
• Wages to continue to rise faster than inflation.
• The Government’s books are forecast to return to surplus in 2028/29, a year earlier than previously forecast.
• Debt is expected to begin falling sooner as a share of the economy.

The Main Budget 2026 Announcements

The key focus of the Budget was to ‘boost funding for essential services and invest in the infrastructure New Zealand needs for the future’. As such, many of the main announcements are focused on infrastructure projects and additional capital for the country’s key services.

Based on the Finance Minister’s announcements, Budget 2026:

• Secures New Zealand’s future by getting back to surplus and reducing debt as a share of GDP.
• Invests to drive better results in health, education, and law and order.
• Delivers jobs-rich infrastructure projects including hospitals, schools, courthouses, police stations, rail upgrades and a new Road of National Significance.
• Provides temporary, timely and targeted support for households and public services facing fuel price pressures.
• Drives forward reforms to increase energy security, boost housing growth and replace the RMA.
• Continues to rebuild the capacity of the Defence Force so it can protect New Zealand’s interests.
• Improves the fairness of housing support and supports the delivery of up to 2,250 more social houses.
• Ends final-year Fees Free while doubling the number of Trades Academy places for Years 11–13 students and funding 1,000 more Youth Guarantee places for school leavers.

Main Announcements for Kiwi Business Owners

On the whole, there were very few major announcements for the Kiwi business community. Continued investment in infrastructure projects will mean more opportunities for the construction and engineering sectors, but measures to help support Kiwi small businesses through their current economic challenges were thin on the ground.

Announcements that may impact business owners include:

Research & Development (R&D)

• Changes to the Research and Development Tax Incentive (RDTI): Rather than making businesses wait until the end of the tax year, the RDTI is being changed to introduce in-year payments. This will help businesses get the tax credit sooner, supporting ongoing research activities by removing a key cashflow barrier.
• Changes to the rules for claiming internal software expenditure: The cap on non-administrative internal software for R&D is being reduced from $25 million to $3 million. This balances the trade-offs between encouraging R&D activities and ensuring the tax credit is well targeted.
• Other R&D changes: The Government is increasing flexibility around RDTI return deadlines by allowing the Commissioner of Inland Revenue discretion to accept and amend late filings. The range of R&D expenditure mining businesses can claim under the RDTI is also being expanded.

Foreign Investment Fund

• Changes to the Foreign Investment Fund (FIF): Budget 2025 introduced a new method to calculate a recent migrant’s FIF tax on unlisted shares. Budget 2026 extends this method to all New Zealand taxpayers, ensuring tax is paid only on realised gains and actual dividends.
• Increase to the FIF de minimis threshold: The threshold for overseas investments is increasing from $50,000 to $100,000, reducing the number of small investors required to apply the FIF rules.

Fringe Benefits Tax

• Changes to Fringe Benefits Tax (FBT) for motor vehicles: Budget 2026 simplifies FBT rules for private motor vehicle use by removing the requirement for detailed logbooks and replacing it with a more practical approach to recording vehicle usage.

The Tax System

• Outstanding loans for liquidated companies to be taxed as income: Six months after a company has been liquidated or removed from the Companies Register, any outstanding shareholder loans will be treated as taxable income.
• Changes to thin capitalisation settings: Thin capitalisation settings for foreign-owned New Zealand banking groups will be updated to align with prudential requirements.
• More funding for Inland Revenue compliance: Budget 2026 allocates an additional $15 million per year to Inland Revenue debt compliance activities.

Banking and Finance

• New prudential levy for banks: A new levy on banks and other financial institutions will help cover the cost of regulation and supervision by the Reserve Bank.

Charities and Non-Profit Organisations

The Government is improving tax rules for the charitable and not-for-profit sector to ensure fairness and resilience.

Key changes include:

• Increasing the amount of net income a not-for-profit organisation can earn without paying tax from $1,000 to $10,000.
• Ensuring the donation tax credit scheme remains financially sustainable by capping eligible donations at $100,000 per year and reducing tax planning risks.
• Allowing donors to receive donation tax credit refunds throughout the year in certain circumstances instead of waiting until year-end.
• Allowing donors to gift their donation tax credit to a charity.
• Ensuring membership subscriptions and levies received by not-for-profit organisations remain non-taxable.

Need Advice on How Budget 2026 Affects Your Business?

If there are any announcements from Budget 2026 that you believe could impact your small business, please come and have a chat with our team.

We’ll be happy to run you through the implications for your business type and industry and offer advice on how to maximise the opportunities and minimise any potential challenges arising from these announcements.

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76% of SMEs have limited or no cash reserves, with 15% having no reserves at all, leaving businesses vulnerable to unexpected disruptions or economic downturns.

‘Seven critical business risks New Zealand SME owners face’, Acclime New Zealand

News from the latest Acclime research reveals that 76% of small and medium-sized enterprises (SMEs) have limited or no cash reserves. That’s a concerning stat, especially when many Kiwi small businesses are facing such turbulent economic conditions.

Let’s take a look at what cash reserves are and why they’re an essential financial buffer.

1. What are cash reserves?

Cash reserves are the funds you set aside to cover your organisation’s cash runway. Think of it as the piggy bank you break open when cash is thin on the ground.

Usually, your cash reserves will be held in bank accounts or short-term deposits that are accessible instantly. In other words, this is money you can access when extra funds are needed to cover unexpected costs and emergency situations.

2. The necessity of having a financial buffer in tough times

In the current unstable conditions, a solid reserve covering three to six months of expenses is vital for absorbing margin-squeezing inflation spikes and rising operational costs.

Having this money in the bank allows you to withstand supply-chain disruptions and revenue dips without the need to take on high-interest emergency debt to keep the lights on.

Helping you build reserves when cash is tight

When your finances are already feeling the squeeze, finding enough disposable revenue to funnel into cash reserves can be a challenge. The trick is to focus on small, disciplined structural changes, allowing you to gradually build up these reserves of cash.

Four simple ways to start adding to your reserves

• Get organised with chasing customer payments: Getting paid on time helps you drive the cashflow that’s needed to start moving funds into your reserves. Switch to 14-day payment terms, use automated reminders in software like Xero or MYOB, and offer enhanced payment options to encourage faster payment.
• Create a regular transfer into your reserve account: Set up an automatic daily or weekly transfer of just 1% to 2% of your daily sales into a reserve account. This amount is small enough not to disrupt operations, but large enough to gradually start building up your reserves over time — giving you accessible funds as and when needed.
• Audit your non-essential expenses and subscriptions: Review your operational spending and software subscriptions to check for any non-essential costs that could be cut back. Cutting $200 a month in unnecessary spending gives you $2,400 a year to pay straight into your cash reserve safety buffer.
• Ring-fence your tax funds immediately: Treat your tax obligations as a non-negotiable expense. Use a separate tax account to ring-fence your GST and company tax funds the moment you receive the sales revenue, so you’re not borrowing from operational funds to pay these bills. This leaves enough cash available to build up your reserves.

Treating your cash reserve as a strategic asset rather than leftover profit is a solid move.

If you currently have limited or non-existent cash reserves in your organisation, come and talk to our team about setting up regular transfers into a separate cash reserve account.

With operational costs escalating and the market still sensitive to price rises, you’ll have seen the term ‘margin compression’ being thrown around in many small business forecasts.

But what exactly is margin compression? And how does this financial phenomenon impact your sales revenues and overall profitability as a business?

Here’s how to identify and tackle the financial challenge of margin compression.

1. What is margin compression?

Margin compression occurs when your operating costs increase at a faster rate than your sales revenue. You might be moving the same volume of products or services, but each sale yields less net profit. In essence, your gross profit margin — the percentage of revenue exceeding the cost of goods sold — is being squeezed from both ends.

2. The key drivers of margin compression

Margin compression is caused by rises in operational and production costs, where your sales revenue fails to keep pace with these increases. The primary drivers of margin compression can include increased inflation, rising energy costs, soaring insurance premiums and the need to increase wages to source specialised talent.

Cautious consumer spending is also preventing businesses from raising prices enough to offset these rising overheads, leading to a thinner bottom line.

3. Taking steps to protect your profitability

To reduce the impact of margin compression, it’s important to focus on operational efficiency and making the value of your product or service stand out in a crowded marketplace.

First, conduct an audit of your supply chain with the aim of negotiating better terms or finding more local (and cheaper) alternatives.

Second, use software automation tools and AI-based solutions to lower your most labour-intensive tasks and the associated admin and people costs.

Finally, instead of competing on price, bundle services or enhance your customer experience to justify a premium price point that can reduce the squeeze on revenues.

4. Managing sales revenue and cashflow

If margin compression is truly biting and affecting your profitability, it’s vital to shift from chasing high-volume sales to focusing on high-margin products.

Go through your recent sales data to find the 20% of your products or services that are generating 80% of your profit. By pivoting your marketing efforts toward these high-performing products and cutting the ones that are delivering low margins, you can maintain healthy cashflow — even when market conditions remain pressurised and challenging.

Helping you preserve your margins and drive profitability

Ultimately, overcoming margin compression is about monitoring your margins and remaining agile. Our team can help you track and review your operational costs, margins and sales revenues, while helping you spot the opportunities to increase margins and profits.

We’re experiencing an ‘AI revolution’ that’s changing the way we do business.

AI agents and AI tools are everywhere, helping us to expand our capabilities, make our processes more efficient and drive a more data-driven, automated operational approach.

What’s the Best Way to Use AI Effectively in Your Small Business?

We’ve highlighted five dos and don’ts for the tech-savvy business owner.

1. Do Explore Agentic AI

Go beyond using simple AI chatbots.

Agentic AI uses bespoke AI agents to autonomously execute multi-step workflows. This could include managing email sequences or inventory, giving your human team more time to focus on high-level strategy and valuable one-to-one client interactions.

2. Don’t Forget to Set Clear Goals for Your AI Usage

Avoid ‘tech for tech’s sake’. Make sure there’s a clear issue to solve with your AI tools.

Define specific metrics — like reducing customer service response times or lowering your operational overheads. Ensure your AI investments are solving real business issues, rather than creating digital clutter or distracting your staff.

3. Do Use AI to Boost Your Research and Analytics Capabilities

AI excels at processing vast datasets almost instantly. Make full use of this capability.

Use AI analysis tools to identify market trends and drill down into customer needs. This gives your team valuable insights to make faster, data-driven decisions that support business growth.

4. Don’t Assume That AI Is Always Right

AI is extremely powerful, but it’s not infallible.

AI can ‘hallucinate’ or provide biased outputs. Always treat AI results as a first draft. Human oversight is essential to verify facts, maintain brand voice, and ensure ethical standards are met.

5. Don’t Put All Your AI Eggs in One Basket

Relying on one software vendor is a risk.

Avoid vendor lock-in by using a mix of AI tools from different providers. Depending on a single vendor can create operational risks if pricing changes or services become unavailable.

If you’re looking to embrace the AI revolution but don’t know where to start, come and talk to our team. We’ll help identify where AI can improve efficiency and build a strategy that maximises benefits while managing risks.

Small businesses are particularly vulnerable in tough economic times.

When sales are slow, there are still overheads and salaries that need to be sorted. Pre-planning and being proactive can help you weather tighter economic periods and allow you to continue to thrive.

Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for.

If there’s even a possibility that there could be a shortfall, it’s essential to meet this head-on. Whether this means talking to your supplier or creditors to figure out an arrangement, or compromising on other business outgoings, you must make a plan to ensure that the business, or your staff, won’t suffer.

Minimise the Stress of Cash Flow

• Invoice early: Send any invoices that you can, and in advance if possible. Consider whether you have any regular clients or customers that you could offer a retainer or similar deal to if they book services or make a purchase from you in advance.
• Chase payment: Use this opportunity to follow up on any outstanding payments. Strong communication and relationships matter — talk to clients and actively chase invoices.
• Talk to suppliers: A little honesty can go a long way. They may be able to extend a line of credit for your payments. In most cases, a good supplier would rather offer flexibility to maintain an ongoing business relationship.
• Review inventory: Can you find a cheaper supplier locally to avoid shipping costs, or discuss alternative products that allow you to reduce expenses?
• Review your costs: Business costs can creep up, so it’s a good idea to regularly review your expenses. Check all regular payments, subscriptions, and upcoming costs. There may be travel, functions, or purchases where you can take a more cost-effective approach.
• Talk to the bank or tax department: If cash flow is tight, start these conversations early so you have the right support in place.

We can help you implement strategies to protect your business for the long term and alleviate cash flow worries.

It’s hard to believe, but the end of the financial year (EOFY) is just days away.

With only one week until the 31 March deadline, there are a few tactical moves we can make to optimise your tax position.

Bank & Loan Statements

Please ensure these are kept for EOFY, as we will request them alongside the End of Year Questionnaire.

Accounts Receivable

Review your outstanding invoices and write off any bad debts (invoices not expected to be paid). Ensure your report is accurate and up to date.

Accounts Payable

Prepare a list of any bills your business owes that are dated 31 March or earlier. If you use Xero, make sure the report is correct. Some bills may not be received until a few weeks later but can still be included.

Stocktake

If you hold inventory, schedule a stocktake for the close of business on 31 March. If you use an inventory system, remember to print the inventory report as at 31 March—especially if you operate a perpetual system.

Work in Progress

If you have work in progress as at 31 March, please provide the details so we can account for any unfinished work.

Fixed Assets

Review last year’s depreciation schedule and let us know if any assets need to be scrapped.

If you’ve bought or sold fixed assets during the year, please provide the relevant invoices. If these were financed, include the loan or finance documents as well.

Prepayments

If you have prepaid any expenses (such as insurance, rent, or professional subscriptions) before 31 March, please provide the details.

Getting these items sorted now will help ensure a smoother preparation of your financial results for the year. If you have any questions, feel free to get in touch.