Whether you’re a retailer or service business, the end-of-year holiday period can tricky and needs careful planning so you’re not left with a financial holiday hangover in the new year.
It’s important that you don’t let the depths of the spikes and troughs determine the success of your business, learn how to plan and your year can be smooth sailing.
For example, for retailers December/January can be the busiest time of the year with sales up and profits high. But, before you start rubbing your hands together, careful cashflow planning is be needed to ensure your funds last during slower times later in the year.
Similarly for service business – with many of your B2B clients shutting down or running on skeleton staff over the holiday break, late December/January are likely to be very lean income-wise – so hopefully you’ve planned ahead and put away a nest egg for the quiet time.
If you have staff, it’s important that your cashflow planning is linked to your staffing needs. If you’re expecting a quiet period, plan your resources accordingly. If you have too many people and not enough work, your well will quickly run dry putting the business under pressure.
But don’t skimp on staff if you’re expecting to be busy. The saying: “make hay while the sun shines” absolutely applies – don’t limit your ability to take on more work or sell more product during busy periods because you’re too scared to outlay wages.
It all comes down to planning. You can confidently plan your way through the spikes and troughs when you understand your business.
There are some great tools out there to help you plan including:
- How to read a Cash Flow Statement
- How to write a Cash Flow Statement
- How to set your pricing
- How to set benchmarks for your small business
If you need some assistance in cashflow planning, Small Business Smart Business also has mentors that can assist. Have a look at who we’ve got on board.