How your small business can combat the post-Christmas slump
Christmas comes around every year and yet it still manages to catch small business owners off-guard. All too often, many well oiled and well run businesses can be susceptible to a cash deficient January. With January habitually being a slow business month and with the upcoming deadlines such as the commercial rent falling on the 25th December and Self Assessment Tax Return due for January 31st its no wonder small businesses can find themselves severely strapped for cash.
Whether you are a retailer who has enjoyed profitable December, or a company that loses trade over the festive period, it may be worth considering these four tips to help you combat your post Christmas cash flow blues:
If you are susceptible to a drop off point in January, start planning your finances as early as possible. Imagine the worst case scenario and factor this into cash flow accordingly, ensure you have the capital to cover any unexpected bills, absent staff, late payers or to purely account for a slow sales month.
Don’t flash the cash
If your business is lucky enough to benefit from the pre-Christmas rush, make sure you are not tempted to spend more than you usually would, even if that employee does deserve a bonus at Christmas, you must first ensure you have the funds to cover their wages in January! Similarly, if your business is quiet before and after the Xmas season, try to find ways to trim down on smaller less essential expenses, perhaps swerve business lunches, overnight stays and footing the bar bill at the Christmas party!
Put quiet period to good use
Take advantage of the peace and quiet, perhaps it is the perfect time to conduct staff reviews and catch up on that admin, or source a new supplier. The start of a new year is the ideal time to set targets and what you wish to achieve in the next 12 months, it may be worth speaking with some of your most frequent customers and get their input on what changes to your products/services they would like to see in 2014, it’s a sure-fire way to spark new ideas and listening to your customers will make them feel valued too.
Get additional funding
You can ask at your bank for extra support over the quieter pre/post Christmas period. However, there are finance companies that specialise in funding solutions that generate immediate working capital for smaller business. Funding packages such as Business Cash Advances, Business Loans or Invoice finance are usually unsecured, flexible and can help a business quickly boost their cash flow!