Many retailers expect large influxes of cash during the holiday season. Shoppers take advantage of Black Friday and Cyber Monday deals and continue scrambling to find presents for their loved ones until the year comes to an end.
Unfortunately, we can’t quite say the same for all B2B companies—or even most of them.
After all, during the holidays, it’s quite common for several team members to be out of the office at the same time. With school out of session, employees often schedule family vacations, too. These absences can slow companies down, as well as the businesses they work with.
If your employees are out of the office, you’re incurring salary expenses without those workers being able to generate any revenue (though, they’ve certainly earned their paid time off). And at the same time, even if your team members are in the office, their colleagues at other companies may be on vacation themselves, stalling your team’s productivity.
Altogether, this means that it can be trickier for B2B companies to generate revenue and maintain consistent cash flow during the coldest months of the year.
If you’re unprepared for the winter doldrums and the sales stagnation that may accompany it, your cash flow can dry up quicker than you can imagine.
The good news is that, with the right approach, B2B companies like yours can avoid cash shortages altogether. With that in mind, let’s take a look at five ways you can stretch out your cash this winter.
1. Wait until it gets warmer to make new capital investments
Your revenue might take a dip with so many workers in and out of the office, and your customers may be facing the same challenge, leading to them taking a bit longer than normal to pay you.
If this sounds familiar, it might be wisest to hold off on new capital expenditures until the weather gets a bit warmer and revenue streams become more predictable. The last thing you want to do is fork over a considerable chunk of cash only to have to scramble to find funds to pay your operating expenses a few weeks later.
Instead of making new capital investments during the winter, consider refurbishing any equipment you may already have. For example, you might not need a fleet of new servers; the ones you have might just need a tune-up.
If you need to acquire new equipment immediately and really can’t wait until the spring, you are probably better off buying something that’s used. Not only will used equipment do the job, but you could also save a lot of money. In fact, pre-owned equipment usually costs between 25–50 percent less than brand-new equipment.
If neither of those options works for you, leasing equipment might make more sense.
While you may be able to get the best deals on real estate during the winter, you’re probably better off waiting until business returns to normal before finalizing a massive purchase—which is sure to tie up a large portion of your cash.
2. Sell off any equipment, furniture, or supplies you no longer need
Let’s say you bought a pricey printer a few years back. It works fantastically, but your business is all about the cloud these days and you almost never print anything anymore—let alone enough to justify leaving a monstrous piece of perfectly good equipment collecting dust in your office.
Chances are there are at least some things hanging around your office that you could part with. If it’s not a printer, maybe it’s a fax machine you never use, or some extra laptops you don’t need.
In addition to generating a little extra cash, selling your old electronic equipment—instead of simply throwing it away—is the right move for environmentally conscious businesses. According to the New York Times, barely 20 percent of the world’s e-waste is recycled through proper channels.
Let’s say you bought some new desks a few months ago and your old ones have been stacked in the corner of your office for the last several weeks.
Instead of taking your old furniture to the dump, it may be worth your while to see if you can sell the desks, chairs, and tables your business no longer needs. And even if you can’t, odds are there are at least a few nearby nonprofit organizations that would readily welcome a donation. Again, in addition to finding a new home for your stuff, you’re also doing the environment a favor.
Bottom line: If there’s equipment, furniture, or other supplies hanging around your office that you’re simply not going to use anymore, try and sell it—or at least donate it.
The money you generate (or save on taxes) may very well help you overcome impending cash flow gaps.
3. Look to renegotiate deals with suppliers and utility companies
The end of one year marks the beginning of another—which makes it as good a time as any to shop around to see whether you’re getting the best deals on telecommunications, electricity, and office supplies, among other things.
The internet makes it possible to search hundreds of suppliers and other vendors in a matter of minutes. Odds are you’ll be able to find a better deal. Even if you can’t, you can at least use the information you uncover to convince your current suppliers to rethink their prices.
According to the National Federation of Independent Businesses, energy costs are a top-three expense for 35 percent of small businesses. Thanks to energy deregulation, however, customers in many states can now choose their own electricity suppliers—instead of being forced to work with a certain utility company.
By doing your due diligence and shopping around for the best deal, you can save as much as 27 percent on your electric bills each month, the Washington Post reports.
Not sure how to negotiate effectively with a supplier? The Harvard Business Review has several strategies you can employ to get the results you’re looking for.
4. Automate as much as you reasonably can
Thanks to advances in technology, companies today can automate many more tasks than they used to be able to.
This begs the question: When’s the last time you thought about the structure of your business and your employee’s routine tasks?
Successful businesses still need humans to power them. But thanks to automation, employees can be deployed more strategically today.
According to this report, business leaders believe that automation can save employees up to 360 hours each year. Multiply that across your entire business and the savings add up significantly—especially when you factor in other productivity gains. Multiply that over the course of the year—and across your entire business—and the savings add up significantly.
For example, if you’re paying someone to work as a receptionist and answer the phone all day, you can invest in an auto attendant and an interactive voice response (IVR) system that, together, competently serve as a digitized replacement, thereby automating your response to routine calls.
Automation doesn’t necessarily have to come at the expense of jobs, either. Instead of paying that person to be a receptionist, you could redirect their time to other, higher-value tasks, such as proofing documents, helping with research, or managing company social media.
By investing in automation where it makes sense, you can save your business serious money over the long run while also increasing your agility in the future.
5. Prepare to take advantage of future opportunities
Business might be slow right now. But as the holidays pass and the weather starts heating up, things will pick up again.
The slowest time of the year serves as the perfect opportunity to start planning ahead for the busier months. Maybe cash is tight right now. But a little strategic planning can help you ensure you have access to the funds you need to grow your company when business heats up.
For example, having a financing plan in place or establishing a line of credit will enable you to respond to new opportunities as they arise. Oftentimes, this can mean saving money down the line.
Imagine a vendor is having a huge sale on supplies you use in your business every day. But there’s a catch: It’s only a two-day sale and you have to pay your bill in full immediately in order to take advantage of the discount.
If you don’t have fast access to cash, you are incapable of taking advantage of the deal. Your expenses become higher than they need to be.
With a financing plan in place, however, you can procure the supplies you need at a discounted price—reducing your expenses and growing your margins along the way.
Winter is coming. Depending on where you live, it might feel as though it’s already here.
Though business might slow down during the coldest months and make your financial situation a bit trickier, you can stretch your cash by getting a little creative and making smart decisions.
With the right approach, you’ll get through the winter with decent cash reserves on hand. If you need it during the months ahead, you can tap into your credit line or leverage your financing plan to get the funds you need to grow your business in the new year.
Doesn’t that make you feel warm inside?