How to overcome summer holiday cash flow challenges
School’s out for summer. 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 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 will face this summer and offer some practical solutions to help you overcome them.
As staff jet set around the world or take time off to look after their children, the summer holidays 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 you could find the remaining employees are overstretched. This is likely to dampen morale and negatively impact the quality of your product or service.
Ahead of the holidays it is wise to ask for everyone’s availability and set a deadline for employees to book time off by so that you can stagger staff holidays and plan cover for missing positions in advance.
If you’ve left it too late to ensure you don’t have too many people off at the same time 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, it’s likely that some of your customers will be too. As a result, invoices may take longer than usual to be paid which can put increased pressure on your cash flow.
You can reduce the chances of payments being missed by putting in courtesy calls to your customers ahead of invoice due dates to find out their plans.
If the person in charge of paying you is taking a break, find out who has been tasked with dealing with payments in their absence.
It can also be beneficial to forecast for potential late payments so that you aren’t caught short this summer.
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 of course great news, you may find that you need additional resources to cope with the increased demand or the quality of your product may diminish.
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, you may find that summer is the slowest time of the year, with significantly reduced trading activity.
If this is true for your business you could be wasting labour costs because your staff don’t have enough work to keep them busy.
There are many things you can do during this quiet patch to prevent your workers getting bored and boost your business.
For instance, do you have a major project you’d like to tackle that keeps being pushed down the list by higher priority tasks? The summer could be your chance to get them started.
Alternatively, you could invest in some additional training to top up your employees’ skills or the hot weather is 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. Get in touch on 0800 9774833 to discuss ways that we can help with your cash flow worries.