After a long economic grind, signs of a turnaround are emerging. Here’s how business owners can position themselves to thrive in FY26.
Like New Year’s Eve, the start of each financial year arrives with that familiar “new year, new me” energy – before it quickly fades back into old habits.
In reality, the calendar flip is largely symbolic. Economic trends don’t change overnight. Many business owners are entering FY25 worn down by years of economic headwinds and recession. And it’s not just a feeling – New Zealand was widely reported as the worst-performing developed economy in 2024. The pressure is real, and you’re not imagining it.
Ride the Wave
The one upside to being at the hard end of the economic cycle? The eventual rebound.
Because New Zealand’s economy has underperformed more than others, we are seeing recovery stimulus arrive faster than our peers. Interest rates are dropping, with a 0.25% cut expected in both April and May. By the second half of the year, most borrowers will be refixing under 5%, and consumer spending is forecast to lift by around $45 million per week by December.
Even if it doesn’t feel like it yet, this is the time to think long-term. The smart businesses are already planning for the uplift expected later in the year. Expect tough headlines around redundancies and closures to stick around through mid-2025, but after that, the recovery momentum will build. Be ready to ride it.
Stay Focused
In difficult times, it’s easy to cut back on everything and go into survival mode. But let’s be clear: no remarkable business was ever built on cost-cutting alone.
While trimming fat is wise, your future success depends on what you’re still choosing to invest in. That might be research and development, a new product line, putting the foot down on marketing, or improving your delivery model. Don’t wait until the market recovers to make your move – position now.
Take Market Share
We all know the saying: “Be fearful when others are greedy, and greedy when others are fearful.” Few moments embody that better than now.
This is the time to take market share. If you have the capital – spend to grow your footprint. If you don’t have capital, then outwork your competitors to earn it.
Gaining share isn’t just about throwing money at traditional or digital media. It could be a sharp PR strategy, a consistent and clever organic social presence, picking up the phone, or doing something bold that cuts through the noise.
This is your window to shift the playing field and be in a stronger position when the economy rebounds.
Get on Top of the Financials
The new financial year is the perfect opportunity to recalibrate your numbers. Revisit your budget. Identify what’s no longer serving the business. Reallocate funds toward the initiatives that will drive growth.
If you’re running without a budget, you’re running blind. You need a clear line of sight into what’s available to invest, and what returns those decisions are delivering.
For product-based businesses, focus hard on inventory management and seasonal cash flow. For service-based operations, debtor control is critical – don’t let receivables stack up and silently choke your working capital.
Look After Yourself
Business is a long game. And your ability to play it well starts with you.
Now’s the time to reset personal habits and make sure you’re positioned to lead effectively. Good time management, looking after your health, staying sharp – these are not luxuries. They’re strategic priorities. Especially through the hard winter months, especially in this economy.
The businesses that perform best aren’t just well-resourced or lucky – they are well-led. Your team, your customers, and your future business all benefit when you are at your best.
History shows us plainly: businesses that invest during recessions outperform their competitors significantly over the following decade.
Now is the time to work hard, stay focused, and keep your eyes on the horizon. The economy will rebound, and the groundwork you lay now will determine how high you rise with it.
Toss Grumley is the Business Advisor at Grumley+Company and a Director at PH Digital and Emma Lewisham. He advises over 20 of the country’s most successful fashion and beauty brands, ranging from retail to design to PR and marketing.