If you want to make 2025 your best and most profitable year yet, financial planning needs to be the top priority. As a business coach, I have worked with a number of New Zealand business owners who are concerned about cash flow, pricing strategies, and long-term profitability. The good news? With the right approach, you can create a business that thrives, regardless of economic uncertainty.
In this article, I’ll share five essential financial strategies that will help you increase profitability, improve cash flow, and create a sustainable business model in 2025.
1. Know Your Numbers
How can you change something if you don't measure it? Regular evaluation of financial performance is so often overlooked or neglected by business owners. Start each month by going over these important metrics:
Cash Flow: Do your incomings exceed your expenses?
Profit Margins: Do your expenses and prices work together to maximise profits?
Costs: Where might you be able to cut unnecessary costs?
Tracking your finances means you can make well-informed decisions rather than reacting to surprises.
2. Price for Profitability
Inflation, growing prices, and industry developments can all influence your pricing strategy. If you haven't reviewed your pricing in the last 12 months, you could be missing out on money.
How to Price Effectively:
Know your costs: Add in labour, materials, overheads, and inflation.
Know Your Value: Charge according to the value you deliver, not just what your competitors charge.
Test and Adjust: Even small price increases can have a major impact on profit margins.
3. Improve your cash flow handling
Even when things appear to be going well on paper, cash flow struggles can impact any business. To make sure money is going in the right direction, follow these steps:
Invoice immediately: Don’t wait until the end of the month.
Offer early payment discounts: Even small benefits will prompt clients to pay in a timely fashion.
Negotiate better terms with suppliers: Extend the due dates for payments if possible.
A strong cash flow allows you to invest in further expansion opportunities, rather than constantly playing a game of catch-up.
4. Cut Down on Needless Spending
Being profitable involves more than just increasing revenue; it also involves careful spending. Examine your spending and consider the following:
Does this expense support the expansion and growth of my business?
Is there a more economical way to do this?
Where can I save money and time by using automation?
Your bottom line can be greatly increased by making small adjustments like renegotiating contracts and outsourcing work.
5. Make Economic Uncertainty a Plan
Economic conditions can change dramatically, as the past few years have shown. Planning and preparation can help reduce the tension you feel when things get a little unclear, as well as protecting the business from unnecessary difficulty. Get ready by:
Creating an emergency reserve to pay for unforeseen expenses.
Increasing the variety of your sources of income to lower risk.
Keeping up with market developments and modifying plans as necessary.
A solid financial plan will help you stay resilient, adapt to challenges, and seize new opportunities in 2025.
Take the Next Step Towards Financial Success
If you’re serious about making 2025 your most profitable year yet, Join us at our workshop, Navigating the Economic Landscape of 2025 and Beyond, in Auckland. This exclusive workshop will feature Brad Olsen, one of New Zealand’s leading economists, who will provide expert insights on market trends, financial planning, and business strategy.
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