Over the last few weeks, we have been delving into Nexia NZ’s 4 Steps to a Successful Business; Business Planning, Budgeting, Cashflow Planning and Management Reporting.
We believe these steps are essential to any business, and if used well they can help you save time and achieve stronger results.
We sat down with Murray Smith, owner of the Tai Tapu Hotel, to discuss his experiences working with Nexia NZ and how he introduced these 4 steps into his business.
How has Nexia New Zealand assisted your business?
Nexia helped us through a change in shareholding, and since then has played a big part in our success. Christine and her team have been there every step of the way, right from the planning session, which focused on how my business was going to grow, to my day to day needs of cashflow and general business advice.
How did your business planning session help you?
The most beneficial part of the business planning session was being pushed out of my comfort zone. I found myself considering and answering the questions no one else was willing to ask me. I’ve now developed a plan and have Nexia holding me accountable. The goals we set are challenging, but realistic, and I continue to work with Nexia to review them.
What have been the benefits of having a budget in place?
My budget keeps me focused on the business plan and the goals that we set. It provides clarity on what the business is doing, including where I need to monitor margins or cut costs.
It’s also been really useful to distinguish between essential costs and unnecessary spending. If it’s not in the budget I don’t spend it without considering the impact on my business, both positive and negative.
How is your cashflow plan working for you?
Cashflow is critical as the business is seasonal, so I need to plan my outgoings and monitor them closely. Now that I can clearly see the highs and lows of my cashflow, I find it much easier to manage the downtimes. I can also make informed decisions about whether to purchase big ticket items outright, or finance them. This takes the stress out of these decisions and ensures that I’m making the right choice.
How do you use management reporting to track how your business is going?
The costs of purchases and wages can kill a business like mine. I can now monitor how they are tracking as a percentage of sales, and this is critical.
It also helps my management team with rostering in advance, based on budgeted turnover and average hourly rates. This provides a level of certainty for my staff and takes the pain out of producing rosters. The monthly profit and loss report that compares actuals to budget is also vital, as it allows me to keep an eye on overhead expenditure.
I have spent time with Nexia learning to understand these reports, and the information I am getting. The team at Nexia have specific industry knowledge, which has meant the reports are tailored to show what’s important to my business and are not a ‘one size fits all solution’. They know what costs drive my business and have designed easy to understand reports accordingly.
Any final comments about our 4 Steps to a Successful Business series?
I would highly recommend Nexia’s services to anyone. Every business owner needs to work through this process. It has given me the clarity I need to drive my business forward and Nexia are always there to help and support me whenever I need it.
Please do not hesitate to contact us at Nexia NZ if you have any questions about the 4 Steps to a Successful Business, or wish to talk to someone about your business growth and improvement plan for 2020.