💬 The Cost of Doing Business in 2025: What’s Really Happening for Small Businesses (and What You Can Do About It)
Now that another round of GST returns are complete here in New Zealand, I’ve been reflecting on the number of small businesses struggling to keep their cash flow positive.
The last time I saw this level of stress among business owners was during Covid — and it’s concerning to see similar patterns returning.
💼 The reality of running a small business
Being a small business owner isn’t for the faint-hearted.
You’re the leader, the salesperson, the marketer, the strategist, the decision-maker, and the credit controller — sometimes all before lunchtime.
Most of us start with a dream — a vision of creating something meaningful. Whether it’s a service, a product, or an innovation, the goal is usually to make life better for others.
But passion alone doesn’t pay the bills. It takes skill, structure, and wisdom to keep a business afloat — and that wisdom often comes from hard-earned lessons over time.
📉 The current landscape: Teetering between solvency and insolvency
Right now, many small businesses are see-sawing between just enough coming in and too much going out.
Sales revenue often only covers immediate payables, overheads (like rent, phones, and internet), and direct costs such as materials and wages. The margin between income and outgoings is paper-thin — and that’s before tax is due.
According to a recent RNZ report (13 October 2025):
“Inland Revenue has made 25% more planned bank deductions since mid-June than in the whole of last year.”
That tells us something important — businesses are under pressure. Not because they’re mismanaged, but because the cost of living and cost of doing business have both outpaced revenue growth.
🌤️ The Kiwi summer shutdown is coming — plan now
We’re heading into the annual Kiwi summer shutdown, when much of the country pauses between Christmas and New Year.
It’s a wonderful time to recharge, but from a business perspective, it can be challenging:
💸 Less income – clients are closed or slowing down
🏠 Same overheads – rent, insurance, subscriptions continue
🧾 More payroll liabilities – annual leave, stat holidays, bonuses
If you haven’t already, now’s the time to prepare — not mid-December when cash is tight.
🧭 How to stabilise and strengthen your cashflow
1️⃣ Create a budget and forecast
If you’re a Xero user, start with the Budget Manager. It’s a great way to project income and expenses over 3, 6, or 12 months, helping you see where things might get tight.
2️⃣ Use your data to your advantage embrace analytics powered by Syft
Depending on your Xero plan, you may also have access to:
💰 Cashflow Manager
📊 Customisable dashboards and graphs
📈 Advanced KPI analysis
These tools help you see trends, track progress, and spot red flags before they become crises. Knowledge really is power here.
3️⃣ Talk to your bookkeeper or accountant
Don’t carry the financial pressure alone. Your bookkeeper or accountant can help you interpret what the numbers are really saying and guide you toward practical steps — before small issues become major stress points.
A quick check-in now could prevent a much harder conversation later.
💡 A final thought
Running a small business in 2025 takes courage — and clarity.
We can’t control the economy, but we can control how we plan and respond.
There is hope for the future, and it starts with knowing your numbers, using the tools available, and having the right people in your corner.
I’ve been diving deeper into Syft Analytics lately and can see the real value in understanding the story behind your numbers — not just the surface figures.
If you’d like to know more, I’m always happy to chat one-on-one — or keep an eye out for my upcoming webinars on cashflow, forecasting, and strategy designed to help both business owners and advisors.
💜 Mel