What can businesses be doing to avoid failure?

Author: Michael Sergel,
Publish Date: Mon, 15 Jun 2026, 5:00am

The head of a financial advisory firm says there are things businesses can do to avoid failure as they deal with rising costs and an ongoing economic slowdown, including raising prices.

Credit reporting agency Centrix has reported almost twice as many liquidations in the past 12 months as it did during same period three years ago.

By industry, liquidations were 169% higher in transport, 146% higher in hospitality, 128% higher in manufacturing and 124% higher in construction.

Lighthouse Financial managing director Matthew Harris said businesses that were struggling needed to get a clear picture of their cash flow and financial obligations, and review their costs, non-essential spending, prices, profit margins and any tax they owed.

While NZIER’s latest Quarterly Survey of Business Opinion found 43% of firms intended to raise prices this quarter, many were absorbing their rising costs.

Harris said businesses often fell down because they hadn’t set their prices and profit margins correctly or they weren’t raising the prices as costs rose.

“There does come a point where business owners have an obligation to pass some of that cost on if absorbing that cost is going to have a detrimental effect on the future of that business.”

Recent polling by fintech firm Prospa finding more than one in six surveyed businesses were operating on less than a month of cash reserves.

Harris said he was seeing a lot of businesses that had good sales on paper but weren’t paying enough attention to cash flow.

“Focusing on getting your receivables in the door as soon as possible always helps businesses in any economy, but especially in an economy like we are right now where it’s harder than it’s been for a very long time.”

Centrix chief operating officer Monika Lacey said the recent spike in liquidations in hospitality reflected cost pressures and reduced discretionary spending.

“Small business owners are exposed, particularly those relying on home equity, reinforcing the close link between household and business financial health.”

Prime Minister Chris Luxon said businesses around the world were facing similar issues due the ongoing fuel crisis.

“We know it’s a difficult time. We expect the banks to stand by those businesses as they go through that transition and we as Government are making sure we aren’t making things worse.”

Michael Sergel is Newstalk ZB’s business reporter. He’s been covering business, politics, local government and consumer affairs for more than a decade.