Small Businesses Stay Calm and Carry On

Small Businesses Stay Calm and Carry On

Keeping calm and carrying on – that’s the current steady stance of small business owners despite the backdrop of rocketing Omicron cases, disruptive protests and ongoing uncertainty.

In The Alternative Board’s Summer Pulse Check, nearly two-thirds of business owners report their confidence is holding steady in the face of ongoing challenges.

For many, this confidence is lessened by government policy and economic conditions, although in contrast, a smaller number report that government policy and economic conditions improve their confidence.

Three-quarters of business owners report they are having to manage labour issues, including skills shortages, juggling staff absences or retention. The vaccination rollout has not had a huge impact on their workforces or businesses – a small number report staff losses but for the majority, it has been business as usual.

After last year’s lockdown stresses, when our Spring Pulse Check showed owners were at their lowest ebb since the start of the pandemic, the summer has seen business owners rally, finding ways to manage uncertainty and pandemic pressures. Chief among the stressors are rising input prices with lack of sales and supply chain issues not far behind.

To get through 2022, business owners are looking for more government or financial support however recent changes to lending conditions has not had an impact. Working capital and customer relationships are also holding steady and while the future isn’t bright, the current pulse is stronger than at the end of 2021.

You can download the full results here and access all the Pulse Checks here.

The Alternative Board supports small to medium sized businesses and their owners through advisory boards consisting of other local business owners, expert one-on-one coaching, a suite of business planning tools and business mentoring.

The Pulse Check is run as a regular monitor of the sector. The Summer edition went to 3520 of our members and associates between 18 – 24 February. Results have a confidence level of 90% and a 5% margin of error.

Challenging Realities Ahead For Small Business Sector

Challenging Realities Ahead For Small Business Sector

Falling confidence, fragile operating conditions and the shadow of inflation are just some of the economic challenges stacking up for small business owners in 2022.

This year’s Pulse Tracker from The Alternative Board tells the story of small business survival through the second year of the pandemic and, while the strong, steady beat of the small business pulse remained consistent through the first onslaught of COVID19, it has now quickened with anxiety as the realities of the pandemic’s midpoint move into view.

The Pulse Tracker charts the progress of small businesses and their owners through a year that has seen them grapple with employment issues, cash flow crises, supply chain breakdowns, port disruptions, rising costs and other problems.

Alfredo Puche, Managing Director of The Alternative Board said: “Confidence remained high until July, despite the many obstacles and uncertainties but the Delta outbreak cracked that confidence with many business owners who had resolutely worked their way through the highs and lows finding themselves exhausted – and some have reached breaking point.

“July also saw the first red flags with business owners warning their prices would have to rise in response to higher input costs. The prolonged lockdown in Auckland plus restrictions across the rest of the country eroded confidence even further, with many feeling it was time to sell up and move on”.

The latest phase of the pandemic is crunch time for many, taking some by surprise with its severity and cementing the view that doing business is likely to get tougher.

With the end of the year in sight, owners are analysing the potential scenarios 2022 might deliver and planning how they will cope. Inflation, rising interest rates, worsening supply chain issues, the implementation of vaccination policies plus the advent of a new variant have fuelled the uncertainty clouding the months ahead.

The Pulse Tracker tells this year’s small business story, as seen through our quarterly Pulse Check, which provides ongoing insights into how owners have managed during 2021, where they are now, and how they will tackle the challenging realities ahead.

The Alternative Board supports small to medium-sized businesses and their owners through advisory boards consisting of other local business owners, expert one-on-one coaching, a suite of business planning tools and business mentoring. The Pulse Check is a quarterly monitor of the sector and the Pulse Tracker aggregates and analyses the research results for the whole year. Each edition of the Pulse Check has a confidence level of 90% and a 5% margin of error.

You can download a copy of the tracker report here.

We will continue to check the pulse in 2022 with the next edition scheduled for mid February.

Each Pulse Check has had a confidence level of 90% and a 5% margin of error.

Why EQ is more important than ever

Why EQ is more important than ever

Tight margins, decreased profitability, increased stress, labour shortages, and supply chain disruptions – these are just some of the issues that business owners have reported on in our latest Pulse Check. And while there’s no doubt that the dial on these has been turned up over the past eighteen months – these pressures are likely to exist after we get back to ‘normal’ (whatever that might look like). So how do you deal with them?

I feel like a lot of what we’ve been seeing over the past eighteen months have been reactive responses to these issues – but in order to enable long-term growth, businesses now need to start thinking about how to be more proactive about these issues moving forward. Those that take a step back and try to think differently about these issues, and are creating strategies to deal with them moving forward will be better positioned than those who don’t.

Easier said than done though! As business owners, we have the tendency to spend too much time working ‘in’’ the business – particularly during tough times like through COVID – rather than working ‘on’ the business.

And, without getting into the political side of things too much, here in Auckland there seems to be a growing consensus that not enough is being done to support our SME community – both from a financial and wellbeing perspective – despite restrictions continuing (if you feel differently though, I’d love to hear your thoughts!).

With all of this, it’s easy to understand why business owners are feeling stressed, anxious, and having sleepless nights.

Now, you might be wondering why I’ve titled this post “why EQ is more important than ever”, and what any of that has to do with what I’ve just spoken about above.

Recent research has shown that, despite trending upwards prior to 2020, there’s been a rather worrying downward trend in EQ over the past year – despite research suggesting that it is even more important than IQ for predicting business success, particularly during times of uncertainty (i.e. a pandemic).

It’s fair to say that EQ has a bit of a ‘soft’ reputation, that it is only about being nice and empathetic to other people – but while empathy certainly is a key component of EQ, it’s actually about being smart with our emotions.

While eight measurable and, importantly, learnable EQ capabilities have been defined, only one has increased over the past year – consequential thinking (i.e. the ability to evaluate the associated risks and benefits of our options).

And while this is typically a useful skill to have, it can also lead to increased risk aversion from business owners – which, consequently, makes it harder to be proactive about solving for some of the struggles they’re facing.

For SMEs, one of the most crucial EQ capabilities to focus on is optimism. Not the kind of optimism that sees us holding hands and dancing round in a circle – but the kind that shifts our thinking to be future-focused, “what are my options?” or “what is my best possible outcome?”.

Understandably, it’s been a struggle for many to tap into that optimistic mindset of late – but with things looking unlikely to change anytime soon, it’s vital that business owners adopt this mindset in order to drive their businesses forward.

There are significant opportunities to be had for those businesses who get ahead of the curve now and start thinking about solving for some of these challenges differently. Lifting up these pressures and planning for them strategically is imperative.

And it’s where optimism comes into play. By analysing and considering these challenges through the lens of “what are my options” and “what is my best possible outcome”, business owners can tap into these opportunities.

At The Alternative Board, a lot of our time is spent helping business owners strategically plan for their businesses – which means a lot of our time is spent adopting this optimistic mindset so we can try and determine the best path forward.

It means that even if you can’t tap into that mindset at the moment – which, believe me, is more than understandable – there’s a support network of peers behind you who can adopt it for you.

Confidence Plummets as Delta Blues Batter Business

Confidence Plummets as Delta Blues Batter Business

Delta blues have left our business owners battered and bowed, weighed down by months of lockdown and prolonged restrictions across the country.

The Spring Pulse Check shows a fifth of business owners are ready to give up and sell while those struggling on want greater clarity from Government, firm policies and more support.

Alfredo Puche said: “Results show we’ve reached a watershed moment. Confidence has plummeted, going from ‘great’ in our Winter Pulse Check to ‘grim’ this time around. Frustration and dissatisfaction have set in and business owners are full of trepidation over the future of the economy.

“There is a strong feeling that Government isn’t listening and this has compounded the very pessimistic outlook.”

Cash flow is under pressure and, with the sharp rise in input costs, most business owners intend to raise their prices. Good management is easing the ever-deteriorating supply chain issues for some but with more cash tied up in inventory, others are struggling as they fall further behind.

Problems caused by worker and skills shortages are on the rise and there’s a clear divide between businesses who have sorted out their vaccination policy and those who want guidance and support from Government on the issue.

Alfredo added: “Well publicised supply constraints and increasing freight costs are hitting business owners in the pocket, with most intending to pass on those increased costs through price rises of their own. The road ahead seems destined for some tough economic times with inflationary pressures combining with rising interest rates, a difficult labour-supply situation, and inevitable business failures following prolonged lockdowns.

“We are really concerned about those business owners who are feeling more isolated as they deal with ever-increasing pressures and would urge them – along with any of their contacts or colleagues – to get in touch so we can provide help and support in the difficult times ahead.”

You can download the full results here and access all the Pulse Checks here.

The Pulse Check is run as a regular monitor of the sector. The Spring edition surveyed 727 of our members and associates between 27 October – 1 November with a confidence level of 90% and a 5% margin of error.

Great, Grumpy or Grim – it’s time to tell us how you feel about your business

Great, Grumpy or Grim – it’s time to tell us how you feel about your business

In all the uncertainty, one thing that is certain is many business owners are doing it tough. Our Spring Pulse Check – Spring Pulse 21 – which gives business owners a direct line to Government is ready and waiting for you to tell us whether you’re getting on great, finding things grim or if everything is just ghastly.

Businesses throughout the country are having to cope with the triple whammy of a long lockdown, supply chain woes and rising inflation and we want to know how owners and leaders are managing getting through – or not.

Our quarterly Pulse Check tracks the progress of small to medium businesses and their owners with the results reported directly to Government, informing both policy and understanding.

Hon. Stuart Nash, Minister for Small Business said: “I find them invaluable. My thanks go to members for participating. It informs a lot of what we are doing and gives us insights we wouldn’t otherwise have”.

Your insights also ensure we continue to have the right resources to help you and, by listening to and understanding your perspectives, we can better support your needs.

As we emerge from a bleak winter, it is your chance to let us – and the Government – know how things are. Does the new season bring signs of hope or is there cold comfort in the air?

You’ll find the Spring Pulse Check here –  SpringPulse21  – please let us know how you are doing, the challenges and opportunities you face and what would help you and your business in the months ahead.

The survey will be live until 1 November 2021 with the results available soon after.

If you would like to watch Stuart Nash talking about the Pulse Check you can do that here – Pulse Check findings inform government policy – – and you can also review earlier results here.

Lockdown wellbeing and trusting your team

Lockdown wellbeing and trusting your team

Employee wellbeing was top of my mind when I started to write this post earlier in the week – then suddenly lockdown was announced and our working patterns were upended once again.

There’s lots of messaging around ‘we’ve done it before and we can do it again’ swirling through the networks and media and, yes, we have and we can – but that doesn’t make it an easy task for anyone.

Each lockdown brings different stresses and pressures for business owners who have to switch into crisis mode to keep their enterprise alive and balance the wellbeing and needs of their teams. Unless you are on the list of essential services, it is inevitable that activity will slow or stop and, as the daily list of locations of interest grows, the probability of your team members spending their day waiting for a test rather than working is considerable.

As we stare at the possibility of a longer lockdown and a significant outbreak what’s the best course of action? Our Winter Pulse Check told us that while owners were confident about the future of their business there was no room for lockdowns. Yet here we are.

Hard as it might be to hear, my first suggestion would be relax. Go for a walk – locally of course – and give yourself a chance to breathe. When you come back, look at the various scenarios that might result from the current situation. Many business owners will have contingency and continuity plans in place drawn from experience after our previous periods of restriction but others won’t. If it all feels overwhelming, ask for help. The challenges will be common to everyone and, as the old saying goes, a problem shared is a problem halved, so talk to others – and talk to your team. Let them lead, provide suggestions and solutions. It may be your business but you don’t have a monopoly on good ideas. Involvement, collaboration, inclusion and managed change are all positive outcomes for businesses in these trying times.

When you think of your own – and your employees’ wellbeing in the coming weeks – remember your values and work to them. Sharing your concerns, open communication, empowering others to speak up and trusting people to do their jobs in the most difficult of circumstances will ease the stress, address the challenges and strengthen your business bonds for the future.

Pulse Check