Coasties, as 2025 unfolds, small businesses on the Hibiscus Coast and beyond face mounting challenges, with economic pressures weighing heavily on the sector.

However, experts suggest there are effective strategies to improve resilience and profitability, even in these uncertain times.

Economic indicators reveal that gross domestic product per capita continues to decline in both New Zealand and Australia.

Company liquidations have reached a ten-year high locally, while consumer confidence, despite a slight rise, remains below the long-term average.

Senior lecturers Antje Fielder and Benjamin Fath of the University of Auckland, alongside University of Queensland Professor Martie-Louise Verreynne, highlight four key areas small businesses can focus on to navigate these challenges effectively: customers, competition, digitalisation, and management.

Prioritising Profitable Customers

Businesses are encouraged to examine their customer base closely, focusing on retaining profitable clients rather than acquiring new ones at any cost.

Research shows that increasing customer retention by just 5% can boost profits by over 25%.

Conversely, "bad customers"—those who fail to pay on time, demand excessive resources, or display disloyalty—can drain profitability.

Understanding what valued customers want and tailoring offerings to attract similar clients can yield significant returns.

Shrinking operations to eliminate unprofitable segments may be necessary for long-term growth.

Collaborating Over Competing

Another strategy involves exploring partnerships with competitors to share costs or take on larger projects.

Such collaboration, particularly during economic downturns, can bolster survival rates and lead to unexpected opportunities.

In cases where competitors are winding down, small businesses may also find valuable assets, employees, or customers available at reduced costs.

University of Auckland Business School senior lecturers (management and international business) Antje Fielder and Benjamin Fath

Embracing Digitalisation

Technology, particularly artificial intelligence (AI), offers significant potential for cost savings and efficiency gains.

While many small businesses in New Zealand have hesitated to adopt AI, experts suggest it could bridge resource gaps and open new sales channels.

Social media platforms such as TikTok and Facebook can also provide alternative avenues to connect with customers and expand market reach.

Additionally, businesses that embrace remote work models could attract skilled talent seeking flexible opportunities.

Strong Leadership Matters

Lastly, good management plays a critical role in weathering tough times.

Clear goal-setting, regular progress monitoring, and encouraging team performance are essential practices for leaders.

Reflecting on personal and professional goals can also provide clarity and renewed focus during crises.

As businesses on the Hibiscus Coast adapt to changing conditions, these insights can serve as a roadmap for navigating 2025 successfully.

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