Death of a thousand cuts

Nobody's business dies in a day.

New Zealand recorded 3,080 formal insolvency appointments in 2025. Liquidations, receiverships, voluntary administrations. The highest annual figure since 2010. The December quarter alone was the second worst since the turn of the millennium, surpassed only by the GFC.

People will read those numbers and think: tough economy, bad timing, external forces, luck.

Wasn't their fault. Nothing they could have done. Poor buggers.

Some of that's true. But most of those businesses didn't get ambushed. They were complicit. And after 25 years of watching it happen, I can tell you the path looks almost identical every time.

Here's how it usually goes:

There's a staff member. You hired them years ago and they were fine for a while, then they weren't. They started costing you more than they contributed. Not always in salary. In energy. In the standard they set. In what the rest of your team quietly noticed and quietly resented.

You knew, you could see it, you could hear it.

But the conversation felt hard. The timing was never right. There was always something more urgent. So you tolerated it. Adjusted around it. Wrote it off as "just how he is." Cut number one.

Then there's the price. You haven't raised it in three years. The market's moved. Your costs have moved. Everything has moved except your invoice. Your accountant's been saying something for eighteen months. But your best client is already a bit quiet, and you don't want to rock anything, so you absorb the margin hit and tell yourself you'll revisit it next quarter.

Next quarter arrives. Nothing changes. Cut number two.

The marketing. Referrals have always worked, so why spend money on something you can't measure? Because referrals are outside your control, that's why. Because you're one good client retiring away from a very bad year. But that feels too abstract to act on right now, so you do nothing and hope the phone keeps ringing.

Cut number three.

And then there's the tax. IRD's outstanding debt book has more than doubled since 2020, sitting at $9.3 billion by mid-2025. That's not a global shock. That's thousands of business owners who kept deferring, kept telling themselves they'd sort it next month, kept making the easier choice in the short term. In January 2025 alone, IRD filed 100 winding-up applications. Triple the number from January 2024.

A lot of that is people finding out that "later" eventually becomes "now."

There's a conversation you've been avoiding with your business partner. A supplier relationship that's gotten comfortable on their end and expensive on yours. A service line with margins so thin you'd be embarrassed to put them on a whiteboard. A lease you signed in optimism that now sits around your neck. A conversation on performance with your team.

Every single one of these was a choice. Not a catastrophe, a choice. Usually a quiet one. Usually made in the path of least resistance on a Tuesday afternoon when you had twelve other things going on.

"It's busy, I have a thousand things on my plate and that's not the thing I want to do."

That's the thing about a thousand cuts. Each one is easy to survive. Each one feels manageable in isolation. It's only when you lay them all out together that you see what's actually happening.

I had a client once. Good operator. Smart. Genuinely loved his business. By the time he came to me, he'd been in slow decline for four years and had managed to explain every single data point away individually. Sales are down but there was that thing with the economy. Margins are thin but input costs have been brutal. Good people keep leaving but it's a tough market for staff.

All true. None of it the actual problem.

The actual problem was that he'd been making accommodating little decisions for four years, each one logical in the moment, and the cumulative effect was a business that had lost its edge, its pricing confidence, and three of its best people.

We fixed it. But it took longer than it needed to because the hardest part wasn't the strategy. It was getting him to stop explaining the symptoms and start owning the pattern.

Most business owners aren't failing because they don't know what to do.

They're failing because the right thing to do is uncomfortable, and the wrong thing to do is easier, and they've been choosing easier for long enough that it's started to look like normal.

The death of a thousand cuts isn't bad luck or bad timing or a bad market. It's the accumulation of every conversation you didn't have, every price increase you didn't make, every underperformer you kept, every hard decision you deferred until it became an emergency.

The cut isn't the problem. The anesthetic is.

If you're reading this and nodding, that's useful information. The question isn't whether it's happening. The question is how many cuts deep you are, and whether you've still got time to do something about it.

Most people do. But not everyone.

Next week I'm going to flip this. Same logic, opposite direction. It's called Growth by a Thousand Bricks, and it's about how the businesses that compound quietly over time do it. Spoiler: it's the same small decisions, made differently.

A Growth Roadmap Session is a straight conversation about where your business actually stands. No sales pitch. Just an honest look at what's working, what isn't, and what to do first.

Flick me a message and I'll send you a link to my diary.