Worried about a cash crunch? The holidays are a time for good friends and great food, so why are you so stressed about the cash flow at your small business?
The end of the year is a busy time for many entrepreneurs. It often means ramping up holiday sales or finishing rush jobs on behalf of harried clients. However, it takes money to make money, and that means you might have to lay out some cash without getting paid until the new year—the annual year-end cash crunch.
5 Ways to Handle the Holiday Cash Crunch
Keep an eye on inventory
Take a look at your past holiday sales records to estimate your inventory needs. What goods or services are seasonally popular? Which ones didn’t perform as well? Make intelligent decisions when it comes to customer demands and be ready to make quick changes if necessary.
Review your finances
Similar to your personal shopping budget, shore up your company’s holiday operating budget before you start spending. Account for the fact that some of your clients might not pay on time. Also consider the one-time costs that come during the season, such as Christmas parties and gifts for clients and staff.
Make sure you can afford to spend extra this holiday and still make ends meet in January and February without falling into a cash crunch.
Getting product out and services rendered on time is critical during the holiday season. If a client orders a gift, they need it delivered before Christmas. If a customer needs an event catered, it doesn’t matter if you’re short-staffed. Failing to deliver means losing the customer, not to mention bad word-of-mouth.
Ensure you have enough workers to meet an uptick in business. Seasonal staffers will need to be trained and compensated, so make sure that’s accounted for in your holiday budget.
Need to pay holiday workers right away? With Fundbox, the online application is simple and easy. Take care of your seasonal employees now before you collect on your invoices in the new year.
At Christmas, paper is for wrapping, not for transactions. Digitally send and receive invoices to reduce waste and hassle. Customers have also begun to expect and demand cashless transactions, so make sure you’re set up to accept online payments by credit card and from payment systems like PayPal. You can also use digital transactions as a way to capture customer email information for future marketing campaigns.
Invoice early or require a deposit
Can’t wait for delayed payments? Make sure to invoice promptly after services are rendered and let your customers know the terms and repercussions for late payment. If you’re concerned about a client’s timely payment, require a deposit to help offset the cost.
Worried your invoices will get lost in the holiday shuffle? Set up an account with Fundbox to make sure you have cash immediately on hand. Fundbox advances the full value of your invoice and doesn’t interfere with your customer relationships. Fundbox funds will cover expenses like additional inventory or rent while you wait on invoices to come in.