“It is slightly depressing as a journalist to constantly be talking about liquidations and companies going under,” he says.
“The wider impact of it is the families behind them. These are mainly family-run businesses with staff who also have their own families. There is a massive domino effect.”
Raynel says the reports he sees tell two stories.
Some owners are cautious, see the problems building and get out early, with debts of less than $50,000.
Others leave him asking how they let it go so long: sometimes owing millions, particularly to the IRD.
In some cases this was down to Covid-era small business loans coming back to bite them, he says.
The pressures are the same for almost everyone: fuel, freight and shipping, Raynel says.
For owners who manufacture offshore and ship product here, freight costs have doubled, he says.
Raynel says he always asks the business owners he interviews what advice they’d give others.
That advice has flipped from a growth focus to a defensive focus.
“A few years ago, it used to be a lot of, ‘Just do it. Like, if someone’s got an idea, absolutely go for it’,” he says.
“Now it’s more check your market out, check your books out, make sure you’re financially stable beforehand. It’s interesting … I’ve seen that shift in real time over the last few years.”
The businesses that can use New Zealand ingredients or New Zealand manufacturers are typically doing better, he says.
“That cuts down a lot of the costs for them.”
“But those ones where they are relying on overseas [suppliers], there’s no other way to do it other than pass the cost on.”
“They’re the ones who are really struggling at the moment to sort of go, ‘Okay, do I need to go into liquidation? Do I need to take on a loan?’”
As we head into the election, the confidence of the small business sector becomes highly relevant, Dann says.
According to the Ministry of Business, Innovation and Employment (MBIE), 97.2% of New Zealand enterprises are small businesses.
On the podcast this week, the pair compare the small business policies of the two major parties.
They also take a deep dive into the structural issues facing retailers – and in particular hospitality businesses.
Listen to the full episode for the complete conversation.
The Economy of Everything is available on the iHeart app or wherever you get your podcasts.
The series is hosted by Liam Dann, business editor-at-large and Tamsyn Parker, business editor for the NZ Herald. Thanks to CMC Markets.