Review your numbers to deal with financial challenges
If you’re wondering “what next” or “what now” for your business, looking at your current financial figures can help you plan next steps.
Knowing your numbers lets you compare different options. One way is to forecast where your costs and income will be in the future – for example, in six months or a year. A forecast is your educated guess based on what you know now.
If you’re confident reading financial statements and want to go further, you could try modelling. A financial model shows how much spare cash you’ll have to spend on other things, like investing in new equipment or subscribing to new software.
Weigh up funding options
If you need extra funds for a project or to see you through challenging times, you could consider getting funding – but you’ll need to have a sound plan first.
You could consider a few options, depending on things like:
- what stage your business is at (for example, start-up or expanding)
- what industry you’re in
- whether you think you can persuade funders to invest or lend you money.
Bootstrapping
Bootstrapping is using your own money to start a business. You’ll keep control of your business, but cash flow might be tricky at times.
Asset finance
If you need to borrow for something specific, like to fit out new premises, you can apply for asset finance. You won’t have to pay the whole amount upfront, but the interest might mean you end up paying more. Do your calculations carefully and make sure the terms of the loan are clear to you.
Crowdfunding
You could ask the public for money in return for rewards, using websites like Kickstarter or PledgeMe. The feedback might tell you if people are interested in your new products or services. Make sure you protect your intellectual property (like designs) in case someone copies your idea. Be aware that there’s no guarantee you’ll meet your target.
Peer-to-peer lending
Peer-to-peer lending (also called crowd-lending) can be more straightforward than applying for a bank loan. Websites like Zagga and Squirrel help set up these loans. Take time to read the terms and get them explained if they’re not clear.
Watch: Reducing stress at tax time
Transcript
Video transcript: Reducing stress during tax time
[Audio/ Visual: Upbeat music starts playing with blue introduction screen with white business.govt.nz logo. The word “presents” in smaller, thinner lettering is beneath the logo. These words disappear and are replaced with white text “Brave in business e-learning series”. These disappear. White text saying “Reducing stress during tax time” then appear in the centre of the screen.]
[Visual: The screen changes to an upper body shot of the presenter, sitting at a table, with a kitchen blurry in the background. In the bottom right is the business.govt.nz logo which remains there until the end of the video.]
Tax time doesn’t have to be stressful. With good planning and clear processes, you can make it easier on yourself.
Here are three tips for reducing stress at tax time.
[Visual: The screen changes to a scanning shot of a red notebook. White text saying “1. Don’t leave things to the last minute” appears in the centre of the screen. This screen remains for 5 seconds. The screen changes back to a profile shot of the presenter.]
Creating a routine to update your financial processes throughout the year will make your life much easier at tax time.
[Visual: The screen zooms out to an upper body shot of the presenter.]
Avoid leaving things to the last minute. Set reminders. Find a record-keeping system that works for you so you can keep everything neatly documented.
[Visual: The shot zooms back into a profile shot of the presenter.]
This way, when tax time comes around, you’ll know you’ve done the right things.
[Visual: The screen changes to a scanning, close up shot of a table with pens, a laptop and a calculator scattered on it. White text saying “2. Get everything in order” appears in the centre of the screen. This screen remains for 5 seconds. The screen changes back to an upper body shot of the presenter.]
Spend some time finding out what you need to do for your business, then create a year-end checklist. We’ve included five tasks to get you started.
[Visual: The screen zooms into a profile shot of the presenter slightly off centred to the right. On the left of the presenter, white text saying “Check who owes you money, and how you owe money to” appears as it is said. It disappears and the screen sweeps to re-centre the presenter.]
Check who owes you money, and who you owe money to. Review your list of customers who still owe you money at the end of the year, and any supplier bills you haven’t paid.
[Visual: The screen zooms out to an upper body shot of the presenter slightly off centred to the right. On the left of the presenter, white text saying “Review your business expenses” appears as it is said. It disappears and the screen sweeps to re-centre the presenter.]
Review your business expenses. Review how you spent money in the year. You may be able to claim business expenses in your tax return. Use this opportunity to find savings and update your budget for the new financial year.
[Visual: The screen zooms into a profile shot of the presenter slightly off centred to the right. On the left of the presenter, white text saying “Review your inventory or services” appears as it is said. It disappears and the screen sweeps to re-centre the presenter.]
Review your inventory or services. Take a moment to review your stock and assets. Which of your products and services were most profitable? Which didn’t do as well? Use these insights to plan for the year ahead.
[Visual: The screen zooms in closer to the presenter with them to the right of the screen. On the left of the presenter, white text saying “Make sure you’re up to date with GST” appears as it is said. It disappears and the screen sweeps to re-centre the presenter.]
Make sure you’re up to date with GST. If your business is GST-registered you will need to file a GST return for every taxable period –
[Visual: The screen changes to an upper body shot of the presenter.]
Most businesses' financial year ends 31 March. If you owe GST after your end of financial year GST return has been filed, you must pay this on the same day as your GST return.
[Visual: The screen changes to a profile shot of the presenter.]
If your financial year ends on a different date, an accountant or bookkeeper can tell you when you’ll need to pay, and help you file your GST return.
[Visual: The screen zooms out to an upper body shot of the presenter slightly off centred to the right. On the left of the presenter, white text saying “Bring together your tax documents” appears as it is said. It disappears and the screen sweeps to re-centre the presenter.]
Bring together your tax documents. To file your tax return, you’ll need your income statements, business expense records, finalised payroll and other documents.
[Visual: The screen changes to a profile shot of the presenter.]
Visit the Inland Revenue website for information. If you need more support, consider using a financial adviser to help make this easier.
[Visual: The screen changes to a scanning shot of a red notebook. White text saying “3. Reset for the new financial year” appears in the centre of the screen. This screen remains for 5 seconds. The screen changes back to the shot of the presenter.]
Lastly, reset for the new financial year. Pause, reflect on your business. Think about what’s working, and plan for the year ahead.
[Visual: Screen changes to an upper body shot of the presenter.]
Put those good financial management habits into practice to keep things smooth throughout the year. Celebrate your achievements. Set clear, realistic goals for the year ahead.
[Visual: Screen zooms into a profile shot of the presenter.]
Remember, good planning and clear processes is key for making tax time as easy as possible.
[Visual: Screen changes to an upper body shot of the presenter and sweeps the perspective to the left, so the presenter is on the right of the screen. White lettering saying “business.govt.nz/tax-time-tips” appears on the left of the screen as it is said.]
For more tips visit business.govt.nz/tax-time-tips.
[Audio / Visual: Upbeat music plays while a blue outro screen appears with the business.govt.nz logo in the centre of the screen. This logo disappears and the Ministry of Business, Innovation, and Employment logo appears on the left-hand side and the Te Kāwanatanga o Aotearoa, New Zealand Government logo appears on the right-hand side.]
[Video ends]
Communicate with your team to reduce stress
Talking to your team about the challenges your business is facing isn’t always easy. But if the challenges will affect them, and possibly their finances and personal lives, they need to know. For example, challenges often mean change, which is stressful, especially if it’s sudden.
Communicate clearly and often. If there’s nothing new to say, say that. Tough times aren’t just about businesses.
People on your team could be dealing with personal challenges too. When this happens, do what you can to support them. Small acts of kindness and support can make a big difference. Start by asking and listening.
Ask what’s wrong and what the person needs – don’t assume. For example, they may need time off, or they may need you to be flexible with their hours.
Prioritise wellbeing for you and your business
Look after your wellbeing, especially in tough times. Being healthy and feeling good is good for business success, because you:
- cope better with stress
- solve problems more easily
- have a stronger sense of purpose and are more motivated
- master new skills and reach your potential more easily.
What's next
Starting a business
Growing your business
Maintaining your business
Selling, closing, or stepping away
Company
Partnership
Sole trader
Contractor
Social enterprise (doing business for good)
Other business structures