December and January are notoriously hard for small business as the need for services starts to dry up, people pack up for their holidays and work doesn’t really return to normal until February hits. Cashflow needs to be carefully managed over this period so you make those few weeks as easy as possible for yourself.
Here are some ways to help that silly season drought:
1. Invoice for jobs as soon as they’re complete
The more cash in before the break, the better. Don’t hesitate to invoice as soon as you can, and consider charging 50% upfront for work and 50% upon completion for jobs that might stretch over a few weeks. You can also provide discounts for those who pay early to incentivise them.
2. Chase debtors
Owed money? Get on the phone! Make sure you get those invoices settled before Christmas or you won’t be seeing anything hit your bank account until well into 2020. If you think some of the debts won’t be paid, RBK Legal has a debt collection service and can assist you in chasing those debtors!
3. Cut costs where you can
Are there any small costs you could put on hold until you’re up and running as usual again? Subscriptions can be a good place to start or even cowering memberships if they allow flexibility. Have a look at where your expenses are going and see where you can cut down.
4. Budget
Get on top of your cashflow forecast early so you can budget before things start getting too tight. Also, check your BAS statement estimate ahead of time so that money can be put away in a separate account. Ensure the obligations you’ll have over the next few weeks can be met – it might mean a few less cocktails but it’ll also mean a lot less stress!
5. Address creditors
If you owe people money and are worried you won’t be able to meet those payments, then do the right thing and get in contact with them. You’ll be surprised how understanding businesses can be – they might be happy for you to go on a payment plan or even defer payment until next year but either way address it now so you can keep those relationships up and treat the creditors with respect. After all, they’re trying to survive the Christmas period too.
