How to overcome summer holiday cash flow challenges
Summer is almost here. Whilst many will be looking forward to spending sunny days with their families, for small business owners the challenges ahead can be a daunting prospect.
Whether your business usually gets a holiday boost or your sales become silent, the summer holidays can be tough – especially when it comes to your cash flow.
Here we explore some of the biggest challenges small businesses face in the summer months and offer some practical solutions to help you overcome them.
With staff taking time off to look after their children or go on holiday, the summer months can significantly stretch internal resources. Also, particularly during good weather and high-profile sporting events, the temptation is there for some to ‘reward’ themselves with an impromptu day off.
If you have too many people off at once, your remaining employees could feel overstretched. This is likely to dampen morale and negatively impact the quality of your product or service.
Ahead of the holidays ask for everyone’s availability and set a deadline for employees to book time off by. This will allow you to stagger staff holidays and plan cover for missing positions in advance.
If you’ve left it too late, you may find it beneficial to hire temporary staff to fill in the gaps.
Managing fluctuating cash flow
It’s not just your staff that will be taking a break this summer, some of your customers will be too. As a result, invoice payments could be delayed. This can put increased pressure on your cash flow.
To reduce the chances of payments being missed, contact your customers ahead of invoice due dates to discuss their plans.
If the person in charge of paying you is away, find out who is dealing with payments in their absence.
It’s also good practice to include late payments in your cash flow forecasts so that you don’t get caught short.
If overdue invoices are an issue for your business you might want to consider this alternative way of overcoming late payment.
For some businesses, the summer sun can bring in more customers. Whilst this is great news, you may need additional resources to cope with the increased demand whilst maintaining quality.
Whether you need to employ additional staff, purchase better machinery or buy more materials, fulfilling increased orders without careful management can pose significant challenges.
Fortunately, there are various finance options available for businesses looking to raise finance for new orders.
In contrast, significantly reduced trading activity in the summer months could make it your slowest period.
If this is true for your business, you could be wasting labour costs because your staff don’t have enough work.
There are many things you can do during this quiet patch to prevent workers getting bored and boost your business.
For instance, do you have a major project that keeps being pushed down the list by higher priority tasks? The summer is the perfect opportunity to push ahead and make it a priority.
Alternatively, you could invest in some additional training to top up your employees’ skills. Or this could be the perfect opportunity for team building exercises to encourage your staff to work together more efficiently.
These are just a few of the many challenges your business might be facing. Contact us on 0800 9774833 or request a call back to discuss ways that we can help with your cash flow worries.