Christmas is fast approaching! For most people, that’s a cause for celebration, but for small business owners, the festive season can bring with it serious cash flow problems.
So I would like to give you Seven Cash Flow Tips that may help you over the Christmas break, where lots of unexpected spending can happen! (it’s an actual thing, when people are on holiday, we spend up).
- Invoice Early
Try to get in as much money as possible from work not yet invoices. Focus on the projects that you can wrap up and invoice. Also don’t be afraid to invoice your clients for a progress payment where you can (i.e. for work still in progress – this is common).
- Follow Up Late Payers
Don’t be afraid to follow up your clients unpaid invoices – we all need money in our banks over Christmas! Including you! You have your family to think about, so please don’t feel like you’ll be upsetting your client by asking what’s rightfully due.
- Promote An Irresistible Offer Or Special To Incentivise New Or Existing Clients To Pay For It Now
Entice them to sign up for your offer, and pay a deposit (e.g. 3 months for two), spend $100.00 and get $200.00 value in January 2022. This is great for hair and beauty salons and services businesses. etc. For retailers, you could package It’s a win-win: you win as you’re getting a deposit in advance, and your clients win as they are getting a great deal in 2022!
- Staff and Payroll
Come December and January, there are four public holidays (Christmas Day, Boxing Day, New Year’s Day and Australia Day) and an amount of annual leave is usually taken. Most businesses will be closed for the public holidays at least. For those, it means reduced staffing needs and limited sales activity during the holiday period. Some businesses however, such as those in the hospitality, retail or tourism industries, may see a surge in sales and extend their trading hours during the holiday period.
- Will the business be closing for holidays and if so, for how long? Are you obliged to pay staff before they go on holiday, or can you keep to your normal pay run frequencies? Are your staff covered by contracts or awards providing an entitlement to annual leave loading (so they are paid extra when they go on holiday)?
- Will you need to engage casual staff, or ask staff to work extra hours? With casuals, is there a minimum shift entitlement? With existing staff, factor in the overtime or ‘penalty’ rates that would be incurred.
- Are you intending or required to pay staff bonuses at year end?
- The annual staff party, year end gifts etc. – are you in a position to pay for these now? If cash is tight, consider keeping things simple and low cost for now, if it’s appropriate to proceed at all. You could provide a special staff lunch or staff gifts sometime in the new year when the situation is not so fragile.
- Put Some Emergency Money Aside
In another completely separate bank account that you can’t easily access, just in case…
We can all get a little spendy over Christmas and throw caution to the wind, but you may regret impulse decisions when you return to work with a very low bank balance
- Reduce Non-Essential Expenses
To help avoid tight cash flow spots, reduce any expenses that are not essential. If that’s not possible, postpone them to a later date.
- Plan Ahead and Forecast Your Cash Flow
This is super important to do, so you can see where your cash position is going to be in one week, two weeks, three weeks, and so on. There’s nothing worse than suddenly having money come out of your bank account that you didn’t expect. It’s best to know NOW than later, and actually running low (or worse, out of) money.
If you’d like to have a chat to talk about how to meet your business’s financial goals for 2022, click on the link below to book a Free 15-minute call with me. So book your call right now!
https://calendly.com/saowanee-1
Nee Riding
