Strategic finance overview

Many small business owners follow their instincts when making decisions. A working knowledge of financial strategies means you don’t need to leave your business’s future to chance. When money’s involved, the most successful businesses are able to check their gut feeling with informed insights.

Our quick self-assessment will shed light on your strengths and the areas you should focus on. By the end, you will have practical steps and expert advice to help you master money matters.

Check out the topics and the interactive tools available in this section. Use the links or the navigation pane to browse through the pages and tools.

Mastering business finances

Strategic finance is more than shares or interest rates. It means you can be more deliberate in your business’s approach to spending, saving, borrowing, and raising money from investors. It helps you spot opportunities, and decide which to take.

Being strategic about finances sets you up to steer your business with certainty, and apply advice from an accountant or advisor in the best way.

Our strategic finance section delves into key concepts and outlines how and when to use business finance tools to achieve your goals.

Back to basics

Our self-assessment is a good way to test your knowledge of the concepts and terms you’ll find throughout this section.

If you’re new to balance sheets and tracking the way cash flows in and out of your business, check out our tax and accounting section for tips and advice on business finance basics.

To use your money well, it helps to speak the language of business finance — and confidently read and interpret your financial figures. Whether you’re experienced or just learning the ropes, take this assessment to find out where you need to focus.

At the end of this assessment, you will get:

  • a better idea of your financial strengths and weaknesses
  • practical tips and tools
  • links to expert advice.

5-10 minutes

Self assessment: Business finance

Cash flow

Tool woman with paper

Did you know…

It’s a misconception that profits should always match your bank balances. Cash flow statements do a good job at showing the differences between your profits and bank balance  — Dan Hellyer, New Zealand Business Performance Panel.

I check my business bank accounts:

Cash flow

people at desk

Did you know...

According to a report in the Harvard Business Review, informal agreements are the source of a lot of payment problems. A handshake isn’t enough — get it in writing.

When a customer or client misses a payment deadline, I send reminders.

Using financial statements

Tool man with paper

Did you know...

A study by Casey and Bartczak found cash flow alone did not predict bankruptcy. A number of financial figures, eg debt level, access to funding, and value of assets that can be sold, may be more reliable.

I check that my business is financially on track.

Using financial statements

Tool man at desk

Did you know…

To improve profits, businesses often find it easier to cut costs rather than increase their income — Dan Hellyer, New Zealand Business Performance Panel.

I check how much it costs to run my business, eg rent, cost of raw materials.

Analysing financial figures

people at desk

Did you know…

Contribution margin is different to gross profit. It shows what’s left to help pay fixed costs. If you can’t cover fixed costs, you’ll end up in the red — Dan Hellyer, New Zealand Business Performance Panel.

I calculate my gross profit margin to see if I earn enough to cover costs and make money.


workers with digger

Did you know…

Will your current run of losses be compensated by the eventual profits to come? Calculating your net present value (NPV) gives you the answer
— Anindya Sen, New Zealand Business Performance Panel.

If my business is in the red — operating at a loss — it’s planned.

Raising funds

builder and businessman

Did you know…

When lenders or investors give you money, they are buying risk. They need to feel comfortable that you can earn enough money to provide a return on their risk — Alex Wong, New Zealand small business expert.

I compare options if I need to raise funds for my business, eg loan types, loan vs investor.

Analysing financial figures

woman business planning

Did you know…

If you don’t understand your numbers, you don’t know your cost drivers or if your product is priced correctly — Alex Wong, New Zealand small business expert.

My business planning includes key numbers, eg revenue and net profit (the bottom line).


Tool lady reading

Did you know…

Perfectly predicting the future is impossible, but the alternative isn’t ‘pure guesswork’. Business planning is about achieving a happy medium between the two — Anindya Sen, New Zealand Business Performance Panel.

I work out my future costs and/or income.

Raising funds

Tool workers talking

Did you know…

Consider getting an investor on board with experience in your industry. Their money will be useful, their expertise and contacts will be invaluable — Alex Wong, New Zealand small business expert.

I talk to someone before making financial decisions about my business.

Tell us about your business

Just one last step before your self-assessment results. So we can shape future tools and services around your needs, please tell us about your business size, location, age and industry.

How to read financial statements

Your balance sheet, income statement and cash flow statement are vital tools to check the health of your business.

Master these documents, line item by line item so you know your assets from your elbow. Check out definitions and examples for each part of these three key statements.

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