Leading into the holiday period there are plenty of things to consider as a business owner. One very important one is cash flow - is your business cash flow in good health to carry you through? This time of year can be hard on small businesses. Make a plan early to ensure healthy cash flow over the holidays.
Whether you’re heading into a holiday period, or just planning to take a break (and congratulations, because a healthy business means work-life balance), it’s essential to keep your cash flow under control. This means pre-planning and being proactive.
When you’re not in the office, overheads and salaries still need to be sorted. If taking time off means that less cash will be coming in, it’s essential to plan for this period to make sure that these costs can be comfortably covered. Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for.
If there’s even a possibility of a shortfall, it’s essential to meet this head-on. Whether this means talking to your supplier or creditors to figure out an arrangement, or compromising on other business outgoings, you must make a plan to ensure that the business, or your staff, won’t suffer.
Tips to minimise the stress of cash flow over the holiday period
Invoice early
Send any invoices that you can, and in advance if possible. Perhaps consider whether you have any regular clients or customers that you could offer a retainer or similar deal if they book services or make a purchase from you in advance.
Chase payment
Use this opportunity to chase up any outstanding payments. Strong communication and relationships matter - talk to clients and chase invoices.
Talk to suppliers
A little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship.
Review your costs
It’s also a good idea to do a general review of expenses. Business costs can creep up, and it’s a great idea to make time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions or purchases to which you can decide on an alternative approach.
Talk to the bank or tax department (or better still - your accountant!)
If cash flow is tight, make sure you have conversations early so you have everything in place to see you through.
When you’re planning for a break, contact us and we can help you navigate the holiday period and help you alleviate cashflow worries.