PwC New Zealand partner John Fisk, is passionate about helping businesses navigate through financial challenges to get realistic and pragmatic outcomes. Ahead, he tells you what not to do when running your own business as well as what you ought to do if you want your business to be around in many years’ time.

Don’t confuse profit with cash

Avoid confusing profit with cash - just because you’re recording great profits, doesn’t mean you can’t be in a liquidity crisis. You need to be on top of both profit and cash to run a successful business.

Understand the limitations in your skillset as the business owner, and have a plan for where to get help when other skills are needed. There’s a big difference between being an employee and running a business, when it comes to attributes and overall approach. It’s a mindset shift that needs to be understood and applied.

Look and think long term

Consider the long term - will your business be viable and able to sustain profit for years to come? Long-term thinking and planning will ensure the business can and will still be operating in the future. Succession planning is all part of this too - even when you’re just starting out on your company’s journey.

The ownership model - determine what’s best for you, whether it’s as sole trader, partnership or limited liability. Different business models come with pros and cons, what’s going to work best for your set of circumstances?

When we say be nimble, this may mean changing business models

Be flexible about changing business models if you come across challenges. If you procrastinate over this, it can make matters worse. Businesses that are agile and can flex and change to meet current conditions, will do better.

Understand the growth and demise curve for businesses. Most businesses travel up a growth curve when they start, but this can be difficult to maintain as the company goes through different stages of growth. Recognising where you are on the growth and demise curve is important, then you know how to respond and when to seek external advice.

Sometimes personal events can be damaging

As well as commercial issues, business owners should be aware that personal issues or problems can accelerate the demise of a business. This might be a relationship breakdown or an illness which can play a role or spiral a business downwards when its owners are under stress.

People need to be aware of the possible harm of these challenges and seek out the best support structures to help them navigate these stressful times.

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Physical vs Digital

Common mistakes business owners make according to PwC partner John Fisk