When you have a seasonal business, you already know that sometimes you have more money coming in, while at other times, cash will be tight. You need to budget and manage your spending accordingly. Save enough in the high season to cover your expense at low points. Understand your fixed and variable costs. Know when you can cut back on your variable costs. Plan for costs that may not appear on the profit & loss, such as asset purchases. At PJT, we can help you set a budget, as well as provide you with tools to help you with daily cashflow management.
- Take advantage of your off season to grow
When you have a low season, you will have both less work to do and less money coming in. Instead of waiting around for business or going on holidays, take the time to build and strengthen your business. Work on your marketing plan, contact potential clients and work on new products or services.
- Maintain a good credit rating
There may be times when you may need to take a loan, despite your good planning. Make sure you pay your bills on time, and try not to build up a large amount of debt. If you do require a loan, shop around to get a good deal. Finance provided by the major banks is getting harder to obtain, so don’t always rely on this being available. Aim to keep the loan repayments at a level you can handle.
- Build relationships with suppliers
Building relationships with suppliers can be helpful, especially in times when cashflow is tight. Keep up the communication around your ability to pay. In high seasons, ensure you pay your bills on time and be a good customer.
- Improve your invoicing process
Consider charging up front or asking for a partial upfront payment. This will reduce the risk of sending out goods or providing services without having some money to pay for expenses.
- Get help – outsource where necessary
If business planning is not your strong point, it is important to hire someone who excels at it. Use a good accountant to help with budgeting and planning. Meet with them regularly to keep you accountable to what you need to do. Also, find a good bookkeeper to ensure your accounts are up to date and accurate, so that you have the information to make even better business decisions. PJT Accountants & Business Advisors along with Evolve Online Bookkeeping can help you manage your business.