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How short-lived successes could be sugar-coating the underlying problems in your business

Paul Martin • Mar 30, 2016

Sugarcoating Is your business staying financially viable in the long-term or are you sugar-coating underlying problems in your business with short-lived successes?

First, what are short-lived business successes? They may have different meanings depending on who is involved. Short-lived business success may refer to a new business project, a completed goal, or maybe it is just the feeling of triumph over adversity.  

 

You might be feeling good having implemented a new project or overcoming a big issue. But problems with cashflow, creditors and debtors and other issues beyond the metrics prevail and won't go away, stopping you from maximising your business' potential. If this situation is familiar to you, then your short-lived successes may be sabotaging your business viability by sugar-coating underlying problems.

 

Like a house, your business needs more than just a nicely painted wall. All aspects need to be solid from the foundations up. It has to survive a competitive market and be ready for change and challenges.

To be sure your business is in good shape, first take an honest look at your business and learn, learn and learn more about it. Regularly conduct a business health check with the help of someone you trust like a Chartered Accountant. Follow the three R's to thoroughly evaluate your business.  

 

Review. Ask basic questions first: How is your business currently doing? Are you achieving your KPIs? How are your business finances? You can use a business health check guide to ensure you review all relevant aspects of your business. It is also useful to get assistance from a Chartered Accountant to help you understand the meaning behind the numbers in your business financials.

 

Research. After evaluating your business, conduct research on areas that need improvement. Knowing where you are having problems is not enough. You need workable solutions. Perhaps there is a missing link between your marketing efforts and sales conversions. Research how you could bridge the gap between these two aspects and learn why your prospect customers are dropping off before they even reach the checkout.

There are many possible solutions to the different problems in your business operations. The only way to resolve them is to conduct research and find the best possible solution.

Remedy. Finally, work on the problems. This is essential to improve your business and create a solid foundation towards long-term prosperity. Cure the root causes of the problems to minimise future risks in your business. Create measurable action plans, strategise and monitor your progress.

It is important that you understand your business, in particular its financial ins and outs. You should not dismiss underlying problems just because you have achieved your goals for the month. A truly viable and future-proofed business can withstand scrutiny and unexpected problems.

For more information on how you can maximise your business' potential call us on (09) 576 4166 or request an online appointment. We'd love to hear from you!

How the new Government and coalition agreements might affect owners of residential rental properties

By Paul Martin • 04 Dec, 2023
There were some key takeouts of interest to many of our clients from the recently signed coalition agreements between National, ACT and New Zealand First and the formation of the new Government. In particular there are a number of policies which will likely benefit landlord clients who own residential rentals. I have summarised some of these below. 1. Return of Interest deductibility for residential rental properties Interest deductibility for residential rental property owners will return. It will be phased back in over three tax years: • 2023/24 tax year: 60% of interest cost will be deductible. • 2024/25 tax year: 80% of interest cost will be deductible. • 2025/26 tax year: 100% of interest cost will be deductible. 2. Reduction in bright-line period National signalled in their pre-election campaign that the bright-line period for residential rental property sales would reduce from 10-years to 2-years. While the exact implementation of this policy is not yet known, it is good news on the horizon for residential property investors. 3. Reinstatement of 90-day no-cause termination notices The new government will reinstate 90-day no-cause tenancy termination notices. This will avoid many unnecessary disputes in the Tenancy Tribunal and gives landlords more confidence in letting to possibly “marginal tenants". Many landlords have avoided what they considered to be risky tenants because eviction for anti-social behaviour was so difficult. With this reinstatement, landlords might be more inclined to give a marginal tenant a chance because they know that if the tenant misbehaves, they won’t be stuck with them. If you would like more information on how these changes might affect your personal circumstances, please feel free to contact us to discuss further.

How does provisional tax work, especially in an economic downturn?

By Paul Martin • 18 Jul, 2023
If you had to pay tax of more than $5,000 in your last income tax return, you may have to pay provisional tax for the following year. Provisional tax is like making progress payments on next year's income tax.

How to handle inflation as a sole trader

By Paul Martin • 18 Jul, 2023
Sole traders have had an especially difficult few years as inflation surges. We have got three tips to help lighten the load for your sole trader business. 
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