For small business owners, managing cash flow is an important part of keeping their enterprise moving forward. While it’s a major consideration for every type of company, those with traditional busy and slow seasons have some additional important considerations to make. Whether you operate a business based on summertime tourism, manufacturing specialized parts for snow removal or a totally different kind of seasonal business, this advice can help you manage your cash flow throughout the year.
1. Clear recognition leads to better planning
There’s no doubt you know when your business hits its revenue peaks and valleys. But do you know exactly how long the busy and slow seasons last? Do you know if a variety of internal and outside factors could impact the length of each season next year? Detail-oriented planning and a look back at past records can help you determine exactly how long each season lasts, as well as any periods of medium activity between the two extremes. This approach is vital for accurately estimating revenue and expenses at your busiest and slowest times, which in turn leads to better cash flow management.
2. Take the long view
It’s easy to spend more when revenue is high, and sometimes it’s necessary to address truly critical issues that could otherwise have a major impact on your business. There are plenty of instances where you can spread out spending and budget to take on projects throughout the year and maintain a more regular and healthy cash flow. This approach lets you take on projects during times when they may be less expensive or more easily completed, as well as maintain a reserve of available funds to address unexpected issues.
3. Find expenses to trim during the slow season
There are certain needs that have to be addressed year-round for businesses, even when they’re experiencing their slow point of the year. From utilities to inventory, some requirements can’t take a break just because many of your customers do. However, you can and should identify areas where you can cut back on spending during times when certain services simply might not be necessary.
Business 2 Community suggested a budget division between necessary and nice to have, and seasonal businesses can make two such lists: one for peak operations and another for the less-busy times. Staffing is an obvious consideration, as many seasonal businesses scale back employee schedules – and associated payroll responsibilities – when demand drops. Every business is different, so take a long look at your financial obligations during the off-season and determine where you can make some temporary cuts. When it comes time to start spending on those needs again, you’ll have a steadier cash flow backing you up
4. Smooth over peaks and valleys with a small business loan
Sometimes, despite the best efforts of small business owners, cash flow issues arise. That’s especially true for businesses with slow and busy seasons. This isn’t anything to be discouraged by, especially if you’ve taken steps to plan ahead and avoid such a concern. An unexpected expense or undeniable opportunity for growth may arise despite your best efforts.
Consider how your business can address these opportunities and problems with a small business loan that fills the gaps in a seasonal business’s finances. National Funding is proud to offer effective, attractive terms, a simple application process and quick decision timelines that are all in line with the needs of small business owners. Get in touch with us today to learn how you can use a small business loan to address cash flow issues and continue to prosper.