A new study reveals that 70% of New Zealand’s small and medium enterprises (SMEs) are reporting high levels of stress and burnout. This statistic is particularly concerning given that SMEs account for 97% of all businesses in the country.
The latest RFI Global research, commissioned by Prospa, paints an alarming picture of the current state of New Zealand’s business landscape. Most SME owners who considered themselves stressed or burned out cited economic challenges (29%), cash flow issues (27%), and the pressure of being a business owner (19%) as their top three reasons. Around 1 in 2 SMEs have had to reduce their personal spending due to economic difficulties, with smaller SMEs being more inclined to take this measure.
Business confidence has also been on a decreasing trend, with only 48% of SMEs feeling optimistic about their company’s future in the next 12 months. This represents a notable decline from the 53% confidence level recorded in November 2023.
Despite this, there is a hint of long-term optimism. 49% express confidence in their business prospects over the next 10 years. This mixed perspective mirrors the present economic landscape; although consumers are becoming more frugal, businesses are hopeful for a future recovery.
The research also reveals that certain sectors are bearing the brunt of today’s economy. Retailers are among the hardest hit, with 85% of them reporting feeling stressed and burnt out. 75% of SMEs in the hospitality industry are struggling with the strain, and 35% of all SMEs have had to work longer hours to cope with the recent economic challenges.
Adrienne Begbie, managing director of Prospa New Zealand, indicates that the link between economic difficulties and the wellbeing of business owners is expected.
“What we’re seeing are the effects of inflation and the cost of living, and the impact this has on business owners’ overall wellbeing. These figures are certainly confronting. But it isn’t the first time our country has faced a recession, and it won’t be the last. What this tells us is that we always bounce back.”
“Business owners should never be forced to choose between their wellbeing, personal lives, and the success of their business,” Begbie added.
“Business owners should not hesitate to seek external support—see what government grants and rebates are available, check out industry insights on how other like-minded businesses are dealing with current economic conditions, and seek professional advice from a financial advisor.”