Preparing for the slower months is the best way to ensure your cash flow doesn't suffer throughout the year.
Most businesses will have a certain time of the year where things are a bit slower than normal. For many, this is during the summer but other seasonal changes can have an impact on sales.
So how do you make sure this doesn't jeopardize your business plan? Managing your cash flow before, during and after this slow period can make all the difference. The important thing is that you don't just bury your head in the sand and wait for it to blow over. You need to plan, and in plenty of time, to ensure your business is in the best position possible.
Adjust your budget and target
If you haven't already, you need to adjust the amount of sales you expect to make across this slow period. Look at the figures from the same time last year and review your predictions for revenue, sales and investments for the upcoming year.
Look at your customers
Using user journey, buyer cycle, and customer data will help you understand why your sales drop so significantly during certain periods. It may be that people are on holiday so aren't making purchases, but it could also be that something on your website is putting them off. You may also be able to identify a new persona that you could potentially target to counteract the low sales from other customers.
Balance your cash
When you know what a realistic revenue may be for your company during its slow periods, you can begin to balance your cash flow accordingly. It may be that you can make savings in certain areas during this time but you need to ensure that all your projections are as accurate as possible.
Consider your outgoings
If you rely on third-party companies or suppliers for day-to-day operations, you should look at other payment options. Many organizations will offer discounts for longer payment terms, which could allow your outgoings to drop during your slow time. Of course, this relies on you being able to afford a bigger expense at another time. But if you can match this up with the period when you're most lucrative, it could be a long-term way of making sure your cash flow doesn't suffer.
Businesses often experience cash flow problems because they aren't getting paid on time themselves. Look at your invoices and see how they could be adjusted to make things easier during the slower months. It may be that you move to longer billing agreements or invoice more frequently, both can help ease cash flow pressure.
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