Better Quality Kiwi SMEs Coming To Market Post-Pandemic

New Zealand’s largest business brokerage reports that small and medium businesses coming to market this year are of better quality than those pre-pandemic, having proven their resilience through COVID, the recession, and supply chain crises.

Steven Matthews, NZ Development Manager at LINK, says the pandemic and other economic crises were a blessing in disguise.

“The team here at LINK is seeing profitable businesses come to market this year across New Zealand because SMEs had to cut expenses to survive. These survival tactics have made them better businesses in the long run.”

Confronting one challenge after another, Kiwi business owners scrutinised every line of their profit and loss statements, asking themselves what they could do better.

“They adopted technology and IT solutions to run more smoothly and efficiently. Decisions made to survive have made them more profitable in a post-pandemic environment,” says Matthews. “SMEs eliminated unnecessary expenses, renegotiated with suppliers, and scrutinised every line of their profit and loss statements for savings.”

Another action, particularly in hospitality, is to adapt to consumers opting for simpler, more affordable options like a five-dollar coffee and a sticky bun instead of a high-end restaurant dinner.

This shift in consumer behaviour has prompted businesses to adapt their offerings to meet changing demands. Business models have become streamlined, with lean efficiency leading to more profit and lower costs.

Matthews offers three actionable strategies for businesses to be more marketable:

1. Cut Operating Expenses:

Cutting expenses include reducing rent, printing, stationery, and motor vehicle expenses.

“Identify all communications costs, including telephone and mobile contracts, and speak to every supplier to get the best deals.”

Businesses can significantly reduce their overheads and improve their bottom line.

2. Strategic Acquisitions:

Growth through acquisition remains a viable strategy. For example, an automotive shop might buy a battery or tyre business.

“Owner-driver transport runs, courier, delivery, and chauffeur businesses are popular in the transport sector. Despite predictions of their demise, service stations are still being funded,” says Matthews.

These acquisitions can help businesses diversify their offerings and tap into new revenue streams, making them more resilient to market fluctuations.

3. Improve Operational Efficiency:

Business owners are advised to streamline their operations to improve efficiency and reduce costs.

“Invest in technology and automation to handle routine tasks, allowing staff to focus on more strategic activities,” says Matthews.

This can include implementing software for inventory management, customer relationship management (CRM), and financial reporting. Better operational efficiencies help increase productivity and profitability.

Matthews says sometimes all it comes down to asking suppliers for a better deal.

“We have seen businesses that never reviewed expenses or cost of goods. By reviewing these factors, they can achieve a 5- 10 per cent increase in profit.”

Matthews says the pandemic and subsequent economic challenges made businesses more resilient. “Businesses now have contingency plans for natural disasters and other crises, ensuring they do not lose equity.”

These plans include investing in infrastructure to protect assets, such as warehouse racking systems to prevent water damage during floods.

“The lessons learned during the pandemic have equipped SMEs with the tools to navigate future uncertainties. By focusing on efficiency, strategic growth, and risk mitigation, businesses are better positioned to thrive in a post-pandemic world,” says Matthews.

ABOUT

Link Group International, founded more than 27 years ago, specialises in connecting business owners with buyers globally. With 23 offices across New Zealand, Australia, and the USA, its extensive network includes over 200 specialist Business Brokers. The company maintains a robust database of over 250,000 active buyers, ensuring it meets diverse client needs effectively and efficiently.

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