The New Year can be a challenging time for small business owners. A great many businesses in the retail, trade and hospitality sectors rely upon the busy December and January period to carry them through the rest of the year.
However, it's also typically a time for greater expenses, which can be difficult to manage, especially if your sales weren't quite what you'd anticipated, leading to a uncertain financial New Year.
The crossover between the year before and the new year is plagued by higher energy bills, holiday and sick pay, yearly or quarterly bills and late invoice payments. Not to mention the upcoming tax deadline.
These outgoings coupled with the slowdown in sales can lead to a rocky start to the New Year that could leave your business struggling for months.
Don't worry! I've put together my top tips to help improve your cash flow and ease your worries.
1.) Don't Worry
Don't start the year with a mountain of stress on your shoulders. There's still time to take practical steps that will ensure your business has a positive start to the New Year.
If things are getting too much for you, try outsourcing or delegating some tasks so that you can focus on the running of your business.
2.) Keep Track of Clients
Create a list or spreadsheet detailing your regular clients and how much they owe you. Being aware of any slow paying clients will help to give you a clear picture of what you'll be facing over the coming months, allowing you to prepare.
3.) Talk to Your Clients and Consider Incentives
Simply talking to your clients can help to resolve any payment issues. Send them a quick reminder in case they have forgotten or pick up the phone and get in touch to see if there are any issues and to arrange a payment date or even a payment plan if it's something that can benefit you both.
Offering incentives such as a discount on early payments can help you to get paid much sooner whilst also making your clients feel valued.
4.) Build a Financial Cushion
As it's the start of a New Year, you can now start to build yourself a financial back-up to help you through the next festive period. Add a festive savings plan to your cash flow plan to help you save a small amount each month to ease the pressure next December.
5.) Is External Funding an Option?
If you're really struggling to pull your business through the festive period, you don't have to throw in the towel.
Whilst careful consideration and planning can help, sometimes you do need an extra financial boost to help see you through difficult times. Consider a personal loan from a friend or family member, before choosing a financial provider, that you can pay back in steady instalments or on a set date.
If a financial provider is your only option, consider them carefully and choose the one best suited to you. Remember that you don't need to arrange a lengthy agreement, a short timeline might work best for you as it will allow you to pay your priority bills until your regular cash flow resumes.
(If lending please seek advice from an expert and remember that any late or missed payments can poorly affect your credit rating.)
Follow these tips to help give your business the best financial start to the New Year. If you have any further tips on how to boost cash flow please share them in the comments below or by tweeting to @adm1nangelsUK