Year end can be a stressful for small business owners. It’s both an exciting, busy time for prospective sales and a stressful period for managing cash flow, payments and stock levels.
The SME Guide to Managing Business Finances over the Festive Season, is an overview of how seasonal businesses can improve their business finance operations over the festive season.
In this guide, your small business will be able to make use of insights on:
The Importance of managing finances during the festive season
The festive season can be a very rewarding or challenging time of the year for businesses. Depending on the industry, or type of product, it can be the biggest sales opportunity for some and it can come to a standstill for others. If it’s peak season, having enough working capital ready to take advantage of the increased demand to meet your targets, purchase sufficient inventory, hire new staff, or invest in marketing becomes a key area of focus.
Our guide shares insight on options you can explore depending on the seasonality of your business and how the festive season impacts it.
Understanding how the festive season impacts your industry
During this time there are many strategies that can be put into place to manage changes and importantly, manage a positive cash flow. So while different strategies will work for different businesses, the one thing all businesses will need is a cash flow forecast.
Learn more about how a forecast can help you keep track of your cash flow.
Start preparations early
The nature of your business makes for distinct approaches to consider when preparing to manage your finances during the festive season. You might need more strategic financial planning to meet your responsibilities. Consider the tips we’ve shared in the guide to help start your preparations.
Many business owners believe the most crucial factor in success is sales. While it is obviously true that without sufficient sales a business will fail, maintaining liquidity, or having access to sufficient cash is equally important. Even the most successful businesses experience fluctuations in revenue, causing disruption to cash flow, so the earlier you plan, the better. Having fast and easy access to working capital in these instances is crucial. Without it, not only will daily operations be impacted but the business will be unable to take advantage of new opportunities. Half of all SMEs recently surveyed by the credit bureau, TransUnion, stated that ‘’access to funding’’ is their major barrier to growth.
Tips to manage your cash flow during this time
From lengthening payment terms, which can cause a lag through supply chains, to slow business activity and drying up income there’s much to consider during the festive season for seasonal businesses. While everyone prepares to celebrate, business owners might find themselves preoccupied with ensuring that cash flow shortages don’t hinder the progress of their business over the festive season.
We’ve shared cash flow management techniques that are proven to assist with these seasonal challenges.
Leveraging business funding
In a world where speed is key and human engagement is sought after, how do you convert your customers and shoppers in a highly competitive time? While planning and preparation play a key strategic role, the importance of funding becomes paramount for your success and stand out during these times. Applying for funding can feel daunting and also scary as a small business owner, so finding a suitable funding parter is essential.
Ultimately, responsible lending means putting the customer first. Businesses turn to a variety of sources for funding. The problem is there are some lenders out there that don’t act in the customer’s best interests. It is important to select a finance partner who believes in responsible lending. This means ensuring affordability, transparency of terms and conditions, and supporting the customer when needed. Funders have the responsibility to make sure customers are clear on the details of the loan and that the business can afford any funding offered to them.
Sometimes, despite your best efforts, a financial backup plan becomes the answer and the responsible way to build business in key periods.
Learn more of the options you can explore in our latest guide. The SME Guide to Business Funding