How is your business really tracking? 6 questions worth asking.
Business health · Practical check-in
Being busy does not necessarily mean the business is performing well. These six questions help you stop, look at the numbers that matter, and decide what deserves attention next.
Ask most business owners how things are going and the first answer is often something like “busy”.
Busy can be good. But it does not tell you whether profit is improving, cash is building, customers are paying on time or enough money is being put aside for tax.
The aim is not to get six perfect answers. The aim is to know where to look next.
Is your profit up, down or about the same?
Start with your year-to-date result and compare it with the same period last year where that comparison makes sense. If profit is up, understand what caused it and whether it is likely to continue. If it is down, check sales, margins and overheads before assuming the answer is simply “more revenue”.
How does cash feel right now?
A profitable business can still have a tight bank account. Ask whether you can comfortably cover normal bills, wages, suppliers, upcoming tax and any larger payments over the next few weeks.
Is money getting tied up in the business?
Look at overdue debtors, stock and work that has been completed but not yet billed. None of these is automatically a problem, but growing balances can quietly absorb a lot of cash.
Has something significant changed?
New staff, pricing changes, finance, large asset purchases, a new service or a major contract can all change profit, cash and tax. The useful question is not only what changed, but what that change means financially.
Do you have enough set aside for tax?
Consider GST, PAYE, provisional tax, terminal tax and FBT where relevant. A healthy bank balance can be misleading if part of it is already committed to Inland Revenue.
Do your provisional tax payments still make sense?
If profit has materially changed, it may be worth reviewing whether your upcoming provisional tax payments still fit your circumstances. Do not reduce a payment based only on how busy or quiet the business feels.
Green, amber or red?
You do not need to turn this into a 40-page management report. A simple traffic-light view is enough to identify priorities.
Green: nothing obvious needs immediate attention.
Amber: something has changed, is uncertain or deserves a conversation.
Red: there is an immediate cash or payment issue that needs prompt attention.
What should you do with the answers?
Pick the one or two areas that would make the biggest difference and turn them into an action. That might mean reviewing pricing, following up debtors, updating your forecast, checking a tax payment or simply getting current management accounts in front of you.
Try the six-question check-in
It is built into The HW Edit and takes only a few minutes. Your answers stay on the page unless you choose to email them to us.
Take the business check-in →General information only. It is a discussion guide, not a financial assessment or tax calculation. Advice depends on your circumstances.