Holiday break cash flow can often be a massive stress for many business owners.
It might seem far off from now, but the Christmas break is quickly approaching. While this can be a welcome time of rest for many business owners, it can be a time of stress for others.
That is because the Christmas break is often a time where businesses struggle with cash flow. Over the Christmas break there are certain costs that don’t go away such as your rent and salaries, but at the same time there might not be cash coming in.
That means that if you want to have a Christmas break where you can truly relax and not have to worry about the cash flow of your business, you need to prepare.
Further, you need to prepare early. There’s no point in deciding you’ll prepare your cash flow for the break two weeks out.
You need to start early if you really want to be adequately prepared in your business.
But what can you do to prepare?
1) Calculate your cash flow needs
The first step is reviewing your budget.
Use your budget to determine what your cash flow needs will be over the break.
Your budget will take into account what the expenses will be while your business potentially shuts for two weeks, and what cash you will need to cover them.
While you should always be reviewing your budget monthly anyway, it is critical you look at your forecasts for the holiday break early as you will need to start planning early.
2) Collect your debtors early
Your debtors are who owe you money.
If someone owes you money, they will probably be going on break over the holiday break too.
That means that if they are already late in paying you, they are about to get even more late.
If you start to focus on your debtors, build awareness around who owes you money and then start collecting it by the middle of October, you’ll be in a position to not need to worry about the people who still owe you money when you take some time off over the break.
3) Look at financing options
If you have reviewed your budget, reviewed your debtors, and then you still think you might be running into some problems, the next step is to look at financing options.
Typically businesses will take out loans from a bank in order to arrange their financing.
Of course, seeking financing from anyone takes time. There needs to be legal agreements and due diligence in place.
That means if you need to organise a financing option for your business, you need to start early.
Don’t leave planning your business cash flow for the holiday break to the last minute – if you do so you’ll be setting yourself up for failure.
Alternatively, if you plan early, you’ll be able to enjoy the break stress free!I’m interested in business help