It’s been a struggle for businesses, but the pressure is easing, and attention is now turning to development, with technology promising to deliver even greater flexibility and mobility than ever before.
That’s the picture being painted of the year ahead for SMEs, whose mindset is shifting from survival to growth, according to one leading financial services provider – which itself is experiencing a significant surge.
Flexigroup (www.flexigroup.co.nz) provides vendor and retail point-of-sale finance and telecommunication services. A major part of its business is helping companies purchase technology. Sales in the last 12 months were up on the previous 12, and Flexigroup’s National Manager, Russell Webber, told Start-Up that customer feedback is encouraging.
"Customers feel, I think, a little bit more positive and their confidence levels are higher than they have been in the past,” he says.
Part of Flexigroup’s brief includes helping its customers through those rough patches – and there were plenty of those over 2009-2010. "We have seen an increase in businesses going into liquidation, but in the last six months generally we’ve seen an easing of pressure on businesses which does suggest to me that businesses are managing the situation quite effectively,” Webber says.
To help ease the pressure, and probably help more than a few businesses survive, Flexigroup’s payment protection insurance found plenty of takers. About 40% of its more than 30,000 customers have it, enabling them to take a ‘payment holiday’ for a short period. Webber says it’s in Flexigroup’s best interests to keep its customers afloat, and for businesses affected by the Canterbury earthquakes, that kind of relief was vital.
LEASE, DON’T BUY
For businesses with expansion in mind, Webber says leasing new IT equipment, rather than buying it, has to be considered. "The method of acquiring technology is quite sound, in that you’re not investing or spending a lot of valuable working capital on technology that is effectively going to be out of date very quickly,” he says.
Leasing can be paid out of operating expenses and is therefore tax-deductible. It also means you can use your cash funds instead to buy assets that will grow in value, Webber adds. Halfway through the financial year, applications for leases are up nine percent.
The recession has taught many businesses valuable lessons about managing cash flow, developing sales opportunities, and focusing on what they do best. But Webber adds another important factor: feedback from both customers and staff.
"Flexigroup surveys its customers regularly and produces a quarterly results package that we use to develop our sales and marketing programme,” he says. "When we first started surveying our customers we learned some valuable lessons about what was important to them. It does not pay to assume you know your customers!”
Flexigroup’s staff are also surveyed regularly, to measure job satisfaction and engagement, and to offer opportunities to develop their careers. As part of its growth strategy, the company is moving to new Auckland premises.
"We owe it to our staff,” Webber says.