Why seasonal businesses need their own kind of plan
A steady business can glance at last month’s bank statement and have a fair idea of next month. A seasonal business can’t. A Queenstown ski-hire shop’s July looks nothing like its November; a Marlborough vineyard contractor’s April looks nothing like its August. A plan built around averages will mislead you, because nobody’s bank account runs on averages.
What matters in a seasonal business is the shape of the year and, above all, the lowest point.
Step 1: Gather two years of history
Pull monthly totals for the last 24 months from your accounting software or business bank statements:
- Money in, by month (sales receipts, not invoices raised).
- Money out, by month, split into fixed costs (rent, leases, core wages, insurance, loan repayments) and variable costs (casual wages, stock, fuel, commissions).
- Tax paid, by month (GST, PAYE, provisional tax).
Two years is better than one because it tells you whether last year was typical.
Step 2: Set up the twelve-month grid
Use a spreadsheet or the free business.govt.nz Cash Flow Forecaster. Across the top: the next twelve months. Down the side:
- Opening bank balance
- Cash in (by source)
- Cash out — fixed costs
- Cash out — variable costs
- Cash out — tax
- Cash out — loan and facility repayments
- Net cash flow for the month
- Closing bank balance (which becomes next month’s opening balance)
Step 3: Forecast cash in, by the month it lands
This is where most plans go wrong. Put income in the month you’ll receive it, not the month you’ll invoice or earn it.
- A tourism business taking deposits months ahead should show those deposits when they arrive.
- A trades business on 20th-of-the-month-following terms should push each month’s invoicing into the next month (or later, for slow payers).
- A grower should follow the actual payment calendar, not harvest dates.
Business.govt.nz recommends three scenarios — pessimistic, realistic and optimistic. For a seasonal business that’s especially important, because a late snow season or a wet summer can shift everything.
Step 4: Forecast costs honestly
Fixed costs are easy: they’re roughly the same each month. Variable costs need thought:
- When do casual staff start and finish?
- When is pre-season stock ordered and paid for?
- When does maintenance happen? (Usually in the quiet months — which is exactly when cash is lowest.)
- Are there annual costs such as insurance renewals, licence fees or ACC levies?
Step 5: Put tax in the right months
Tax often catches seasonal businesses out because it’s calculated on the year but due on fixed dates. For a 31 March balance date:
- Provisional tax (standard or estimation option): 28 August, 15 January and 7 May.
- GST: generally the 28th of the month after each period ends, with 15 January and 7 May as the exceptions.
- PAYE: depends on your payroll size and filing schedule.
See our guides on provisional tax for seasonal businesses and GST timing.
Step 6: Find the low point
Now look along the closing bank balance row in your pessimistic scenario. Find the lowest figure. That’s your trough: the moment the business is most exposed. Note:
- How low it goes.
- When it happens.
- How long the balance stays below your comfort level.
If the lowest point is above zero with a sensible margin, you may only need a modest reserve. If it dips below zero, you have a funding gap to plan for now, not when it arrives.
Step 7: Decide how to cover the gap
Options, roughly in order of preference:
- Reduce the gap — negotiate supplier terms, shift maintenance timing, take deposits, invoice faster.
- Build a cash reserve from peak-season profits. See building a cash buffer.
- Arrange a standby facility such as a line of credit, ideally at the end of your peak when your bank statements look their best.
- Use a lump-sum loan for bigger or one-off needs, including a property-secured loan of $20,000 to $1m if you or a supporting party own New Zealand property.
Step 8: Review monthly
A forecast is only useful if it’s kept current. Once a month, replace the forecast figures for the month just finished with actuals, roll the plan forward a month, and check whether the low point has moved. It takes half an hour and it’s the best early-warning system a seasonal business can have.
A simple template to start with
| Jan | Feb | Mar | … | Dec | |
|---|---|---|---|---|---|
| Opening balance | |||||
| Cash in | |||||
| Fixed costs | |||||
| Variable costs | |||||
| Tax | |||||
| Repayments | |||||
| Closing balance |
Bringing the plan to a lender
A seasonal cash flow plan is the most persuasive document you can bring to a funding conversation. It shows the lender that the quiet months are expected, that the peak clears them, and that you know exactly how much you need. If your plan shows a gap, our seasonal business funding page explains how we help — starting with a 60-second enquiry that doesn’t affect your credit score.