Reducing the uncertainty: Embracing the new reality

Is Your NZ Business Built for What’s Coming Next?

There are some real challenges to running a business in New Zealand in 2025, especially if you’re a long-standing, established SME trying to keep pace with a changing landscape. Whether you’re preparing for growth, succession, or simply staying afloat, optimising your NZ business for 2025 is more important than ever.

As a seasoned business owner, you’ve got experience, resilience, and hard-won knowledge on your side. But you’re now facing a wave of new challenges: rising operating costs, workforce shortages, the growing role of artificial intelligence (AI), extreme weather events, and global economic uncertainty.

So what does this mean for Kiwi business owners?

Let’s take a closer look at the changing landscape and how your business can stay ahead.

The Business World Has Changed. Have You?

Back when you first opened your doors, things were different. Cashflow was king, technology was a tool, not a threat, and there was enough margin to absorb a few bumps along the way.

Now, the game has changed.

Technology is advancing fast. AI and automation are redefining productivity and reshaping client expectations.

Climate events are disrupting operations. Just ask the Hawke’s Bay growers or Auckland retailers hit by floods last year.

The labour market is tight. Many SMEs are struggling to attract and retain skilled staff.

Succession planning is getting harder. Whether you want to sell, pass the business to family, or simply step back, many owners are finding it tough to exit on their own terms.

Key Challenges Facing NZ Businesses in 2025

• Staying Competitive and Efficient

A recent Salesforce study found that 82% of New Zealand SMEs are already using AI, and of those, 95% reported revenue growth thanks to automation in areas like marketing, customer service, and operations.

One standout example is Urban Rest, a boutique accommodation provider that implemented AI-driven guest support and property management tools. As a result, they achieved a 1,400% revenue increase over three years.

However, many established businesses still lag behind in adopting cloud systems and digital tools. Falling behind on technology can put your business at serious risk of losing its competitive edge.

• Building Resilience Against Disruption

Climate-related risks are no longer distant threats. They are here and impacting businesses directly. Global insurance firm Marsh has flagged a rise in weather-related insurance claims from Kiwi SMEs, with increasing premiums, damage-related downtime, and broken supply chains among the major concerns.

Real examples of this impact include the 2024 Otago floods, which caused $33.8 million in private insurance claims and over $1.5 million in infrastructure damage. 

Similarly, the 2023 Auckland Anniversary floods inflicted over $2.2 billion in damage. Supermarkets, museums, the zoo, and countless small shops and cafés were forced to close — highlighting how urgent and costly unpreparedness can be.

• Planning for the Future

Cyclone Gabrielle in early 2023 devastated parts of the North Island, particularly Hawke’s Bay. Towns like Wairoa and Port Waikato were completely cut off, and recovery costs are expected to exceed $5 billion.

For many business owners, events like these are a wake-up call to build resilience into their long-term strategy. From reviewing succession plans to reassessing exit options, these disruptions have prompted mature business owners to rethink what the future of their business looks like.

How to Optimise Your Kiwi Business for 2025

There’s no silver bullet, but here are three practical ways Kiwi businesses can stay agile and set themselves up for success.

1. Embrace Digital Tools but Do It Smart: AI and automation are here to stay. The key is to implement systems that actually support your team, improve customer experience, and boost margins. Start small, but start now.
2. Invest in People: Technology can streamline, but people drive vision, culture, and relationships. Prioritise leadership development, upskilling, and the wellbeing of your team. In a people-short market, this is your competitive edge.
3. Balance Tech with Oversight: Use AI to power operations but make sure humans are still making the decisions. Balance efficiency with judgement, and let your unique human touch shine through.

Let’s Talk About What Comes Next

If you’re feeling overwhelmed by the changing landscape, you’re not alone. At SME Financial, we work with hundreds of New Zealand businesses navigating the same questions.

• Is now the time to invest in new systems?
• Can I afford to take a step back from the day-to-day?
• What do I need to do now to future-proof the business?

Whether you’re preparing for growth, looking to sell, or just trying to survive through some of these current challenges, our team is here to help.

Let’s have a conversation about how to optimise your NZ business for 2025 and secure your future.

Together we can achieve more.