A recent survey found that three quarters (76%) of small business owners and entrepreneurs forego holidays in order to keep their business running smoothly (The Guardian). We’re pretty big on holidays here so we wanted to put together a few tips to ensure you get the break you so greatly need this summer.
1. Review your sales forecasts to ensure you have enough cash coming in.
Jan & Feb deliver excellent sunshine but often cashflow is not so sunny so we need to make sure you have a handle on cashflow. If you don’t have a sales forecast then look at receivables and see what people are likely to pay in Jan/Feb. Key date is 15th Jan – knackers most businesses – so much cash going out to the IRD. Think about the deposits you may get between 20th Dec- 14th Jan and check that’s going to be enough to cover costs (provisional tax, gst, etc). If not, make a plan, it’s always best to be upfront about these cashflow issues before the fact, the outcome is always better if you take this approach.
2. Review your staffing to ensure you can deliver on your sales forecasts.
When people take time off remember you are still paying wages, cashflow forecast sussed to ensure it covers all staffing outgoings. Planning out how you are going to still have human contact with your customers is also key, have you got the staff you need to keep it going?
3. Put in place a cashflow forecast to work through the December January downturn to make sure you can pay all your bills and taxes (Provisional tax, GST, PAYE etc) when they fall due. The great thing is – the IRD are generally good to work with and there are two things we can do to help. Firstly, look at tax traders or secondly, simply contact IRD and tell them your situation, they can come up with a plan with you to pay off over the next 3-6months. Know what you’re entitled to – if you’re impacted by Covid the IRD will remit all interest and penalties – which is great!
4. Talk to your bank early rather than at the last minute.
The ideal scenario is that in Oct/Nov you have these discussions with your bank such as – here’s our cashflow, we might need some help in Jan – forewarning them. The bank then has weeks to figure it out how to support and you’re ahead of the ball game.
5. Delay any expenditure you can until February/March.
No new coffee machines in January! Signing up for a new lease on car? Plan to do it in Feb/March. Hiring someone? Do that in February. If you have a big supplier, see if you can pay off the invoice over a couple of months. Again, it’s about planning and knowing what’s coming so you can pre-empt the pain – and hopefully, avoid it!
6. Have a cleanout.
At the risk of sounding like your mother, make the time to have a clear-out at your workplace, put files into storage, sell things you no longer need and generally make it a pleasant place to be. Trust me, coming back after the holiday period to an organised space will make all the difference.
So throw on your jandals, slip, slop slap and enjoy the good life. We’ll be here to hear all about it and help you crack into 2022 in the best possible position. Book your consultation with our team today!