If summer is your quiet season, then it’s key that your year-round revenues sustain you through the cash flow-quiet months. It’s also critical that you use this time wisely to ensure those revenues keep coming back strong year after year.
Here are some tips for preventing a cash flow crisis this summer.
Clean Up Your Finances
If you commonly run into cash flow problems during your quiet season, do something about it. Spend some time reviewing your cash flow statements to see how the inflow and outflow of cash tracks historically. Use that data to inform your cash flow forecast. You should also draw on your knowledge of market factors, sales cycles, and expense patterns to better predict when you’re likely to feel the cash flow pinch so that you can put strategies in place to mitigate the impact. Finally, if you’ve been putting off certain tasks until you aren’t so busy, well, now might be the perfect time.
Don’t Pay Bills Until They’re Due
This might sound obvious, but it’s so easy to pay bills on autopilot when we receive them that it’s worth mentioning. Preserve your cash flow by paying as close to the net term date as possible.
Put Steps in Place to Ensure You’re Paid Faster
From invoicing as soon as a project is completed to being diligent in your collections, practice effective accounts receivable practices year-round. This will ensure that you’re in good shape come the summer months. Here are a few tips to get you started:
- 7 Direct, Yet Diplomatic, Ways to Handle a Slow-Paying Client
- 6 Ways to Streamline Your Invoicing
- Is the Way You Invoice Helping (or Hurting) Cash Flow?
Have a Financial Fallback
All quiet seasons come to an end, but seasonal businesses still incur costs, especially as you ramp up for busier times. Short-term financing is a useful option to consider at this time. For example, the SBA offers a loan program designed to help small businesses meet short-term and working capital needs like purchase orders, inventory, labor, and materials. SBA loans are administered through banks, so start your search there.
Another option is to secure business line of credit in advance of your quiet season. This can be borrowed against when you need the cash and paid back when you don’t.
If your financial cushion is depleted and cash flow is getting tight, fintech services like Fundbox can help. Fundbox provides lines of credit, as well as advance payments against your outstanding invoices. Applications require zero paperwork and you can find out how much credit you qualify for in minutes. If approved for credit, you can draw funds directly to your business bank account, then pay it back in installments over 12 or 24 weeks. This gives you access to the funds you need right away.
Stay in Touch with Customers
Summer is the perfect time to improve your email or social media marketing efforts, create great new marketing content (like blogs, videos, or podcasts), and build your prospect database so that when your busy season returns, you are the first one your customers and prospects turn to with their needs.
Kick Off Your Seasonal Marketing Earlier
It always surprises me how often seasonal businesses are late to kick off their selling season marketing campaigns. In a fast-moving economy, the early bird gets the worm. I’m not advocating you start selling winter gear in August, but take a look at your seasonality. Could you extend your season by kicking off your pre-season marketing earlier and then closing out with end-of-season sales—effectively reducing the length of your quiet season?
Create Some Off-Season Excitement
Instead of riding out the quiet season, look for ways to kick-start your sales during the summer lull. Retail businesses could keep enticing existing customers to come back by offering freebies for a limited time. This will give customers a taste of new product lines and show your appreciation for their business. Throw an open house or event to showcase your products—this will attract new and existing customers alike.
If you’re in a service-related business, consider adding complimentary products or services to your portfolio.
Diversify Your Market
Are there niche markets that you don’t normally serve that you could explore during your quiet season and even continue to serve year-round? If your regular customers head to the beach during the summer, could you diversify or offer specials that target those who stay behind? What about markets outside your region, ones less affected by seasonality? You might be able to serve different needs year-round with some creative thinking.
Ready for more?
Apply for funding and find out if you qualify today