How to budget and make your dollar go further

Your budget comprises your income, expenses, and any money remaining, which could be placed into a savings account or used to pay off a debt. Whether you're bootstrapping a start-up or conscious of how much money you're spending, a few minor improvements can help you budget and save while keeping your business operating in the green.


Identify problems with your spending and income levels, and solve them.

To plug the leaks, you first need to find the holes. Track downfalls in your systems and processes that could be putting the crunch on your cashflow. For example:

  • You may have a significant customer who doesn't get their bills paid on time. Could stricter credit control and debt collection procedures help with hold-ups?
  • Rising costs in production can affect your budget and erode profit margins. Spending less money on materials and supplies may help, or is it time to plan a price increase? Keep a close eye on gross profit margins to catch slippage before it causes too much damage.
  • Business overheads can creep up, and before you know it, you're spending more than your original budget. What specific expenses have increased, and how are you going to reduce them? By regularly monitoring your net profit margins, you'll be in a better position to spot any out-of-proportion increases and take timely action.
  • Business growth is excellent, but rapid expansion can bring with it additional expenses, too. So if your working capital is feeling the pinch from the sudden change, it could mean slowing down spending for a period to allow your revenue to catch up.
  • We can't always predict what's ahead, but you still need to be able to afford to pay the rent or mortgage. So if sales have been slower than expected, you might have to work towards a new strategy, go-to-market plan, or even a complete review of business viability.
  • From time to time, events beyond our control can ruin the best-laid plans. For example, COVID-19, losing a significant contract or having to invest in key assets can put pressure on your company's financial situation. Therefore, diversification of customer base and careful cashflow forecasting is critical in budgeting.

Free up cash where you can

Before you seek financial support from external sources, budgeting begins with a focus on freeing up money from within your business. You may be surprised at the difference these small shifts in spending can make to your budget:

  • Sell underused assets. You'll be saving money by renting the equipment instead, as and when required.
  • Downgrade or sell vehicles and consider lease options instead.
  • Reduce the money you spend out of the business account until revenues improve.
  • Track your expenses. Slash and burn non-essential spending.
  • Save more by tightly managing your inventory, aiming to hold just enough to service your customers.
  • Consider refinancing to lower your payment amount.

Collect your money faster

Invoice immediately or provide online and mobile payment options. When negotiating new contracts with customers, be aware of setting payment terms that help your cashflow, such as deposits or progress payments. 


  • For contracts that take a long time to complete, negotiate accounts to be paid in stages. 
  • Include a regular weekly or monthly timetable for the customer to pay their bill as part of any agreement.
  • Agree on clear milestones for the work to be completed to minimise the chance of the customer disputing an invoice and refusing to pay.
  • Curb how much credit you provide and to which customers.

Most industries have tools to collect payments immediately.


Joining with other businesses can help you stick to your budget and increase savings by sharing resources, people, ideas and capacity. The agreement can be formal (a contractual obligation), informal (referring work to each other and verbal agreements), significant (sharing suppliers and long-term customers) or ad-hoc (coming together project by project).

Collaborating with other New Zealand businesses can help you manage your budget and:

  • Access new products, services and markets by on-selling your own range to their customers or distribution channels.
  • Reduce costs by sharing resources, staff or gaining volume purchase discounts for added savings.
  • Enhance capacity to bid on larger contracts by offering broader services or presenting a larger business with enhanced capability.
  • Strengthen supplier relationships and meet your budget by reducing your spending through bulk ordering 
  • Outsource production, so you don't need to spend money on infrastructure.
  • Access new business models and ways of selling to boost your income.

And when the time comes, raise external funds wisely

You may have managed to plan, budget for, and fund your enterprise alone to this point, but don't be afraid to explore other ways of raising capital through partners and with your community. For example, crowdfunding has risen in popularity over the last few years, in which ventures receive donations via a website to help get business ideas off the ground. 

Borrowing money or seeking funds doesn't have to be the only solution to meeting budgets and creating comfortable cashflow in your business. 

Next steps:

  • Identify how minor improvements could help you stay within your budget and create incremental gains to your bottom line.
  • Are you looking for a sizable amount of money or need a longer-term investment to grow your business? Then chat with your accountant or business advisor for expert advice to help you achieve your business goals. They can discuss how to create a budget, provide tips to help save money, and build a plan for paying off debts etc.
  • Review your networks to see whom you can work with to complement your skillset.
  • Investigate any angel investors who may have an interest in a new opportunity to invest in your business.
  • See what options are available to you through incubators or business grants.
  • Sign up for Online EFTPOS or the ASB Mobile app to take immediate payments.
  • Get in touch with ASB by enquiring online, visiting a branch, contacting your banker, or by calling 0800 272 222 for banking advice or more information on how to budget for NZ small businesses.

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