Helping you get through turbulent financial times

Adaptability is a necessary quality for any business owner, but especially to survive turbulent times. It is important for the decision makers within a business to routinely report up-to-date information so they can make relevant and timely decisions instead of waiting until tax returns are prepared to understand their profit margins and cashflow figures.

With an annual inflation rate of 5.9 per cent ending December 2021 (Consumer Price Index (CPI) and increasing interest rates due to the aftermath of Covid-19, it’s no wonder the cost of living has increased, and supplier issues have become more prevalent. Whether you sell goods or offer services, these increasing costs may have an impact on your business.

Understanding what fixed and variable costs are associated with your selling price or charge out rates can help you determine your profit margin by understanding how many goods you need to sell and/or how many hours you need to charge out.

It is important to notice any price increases from your suppliers in real time so that you can accommodate your pricing structure to absorb this change. For example, fuel prices in the last 10 weeks have skyrocketed, and are predicted to continue to increase. You may need to calculate new selling prices or charge out rates to minimise your risk of working for little profit and, in some cases, at a loss.

Although it’s not the most exciting part of running a business, up-to-date regular reporting and understanding the information in these reports is vital to helping your business survive turbulent times. This can be challenging if you’re running a business on your own or with a limited management team, not to mention if you have staff relying on you!

This is where a business adviser can help. Whether it be developing a business plan, understanding the market, or applying for government assistant, an adviser can help you with the financial aspect of your business, challenge you on your thinking and provide feedback. Making the investment in a good adviser can help your business now and in the future.

If you have any questions or would like some guidance with your business, visit findex.

co.nz or contact us on 06 858 5540 and a member of the local Findex team will be in touch.

The views and opinions expressed in this article are those of the author/s and do

not necessarily reflect the thought or position of Findex Advice Services NZ Limited.

Refer to our disclosure information on our website

https://www.findex.co.nz/ disclaimers/disclaimer-anddisclosure