With the festive season fast approaching, now is the time for your business to start preparing its finances for this period.
During the traditionally slow period of summer and with distractions of Christmas, New Year and holidays, it can be easy to lose track of your business’s progress.
The key to maintaining the health of your business over the break, and to start the New Year prepared and on-track, is to ensure you have a positive cash flow. Here are some small business tips for keeping you cash flow healthy.
Collect debts quickly
Make a list of debtors and check it twice. It is important that you collect all of your debts before the holiday period, since you’re likely to need the extra cash flow to cover you over the slower months of January and February. By collecting your debts now, especially the traditionally slow debtors, you will not only increase your cash flow, but will be able to start the new year afresh.
Don’t forget to budget!
Just as you make a budget for your family’s Christmas gifts, you also need to make one for your business. Since business doesn’t generally pick up again until March, it’s important that you anticipate all of your expenses from now to the end of February. Think about rent, employees’ wages and money owed to suppliers. Take all of these things into consideration and make sure that your cash flow is able to cover them.
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Keep your expenses low
By reducing your expenses, you can ensure your cash flow stays high. A great way to reduce your expenses over the holiday season is to reduce your staff members in January and February. You should retain only skeleton staff over the holiday season – since it’s generally a quiet time of year, you’re unlikely to need the extra help.
Only take the holidays you can afford. Your business still needs to be open in order to make money, so only plan a big trip if your cash flow is high enough to allow the business to be closed for a long period of time.
If your business is closed, and you use Google Adwords or subscribe to any other form of marketing service, then you should cancel these services for the period that you are closed. There is no point in paying to get enquiries that you won’t be able to action immediately.
Happy customers = Happy New Year
Don’t forget about your clients! Maintain contact with them over the break to build your business’s goodwill and to ensure they use your services again in the New Year. For special customers, send them a Christmas card to thank them for their business, or even send them a gift. Such a small act can have a large impact on building your customer relations and maintaining a loyal customer base.
By following these small business tips, you should be able to maintain a healthy cash flow over the holiday period. Now you can put your mind at ease, and enjoy your holidays. Merry Christmas!
What are you doing to ensure your business survives the holiday period?