Business Survival tips for the Holidays
SCE Federal Credit Union Provides Holiday Cash Flow and More Tips for Small Business OwnersNov 15, 2011 | Business
The holidays can have a huge impact on small businesses. Sales go up, but payments on invoices may be delayed. Small businesses need to take precautions to prevent cash flow shortages and keep their companies stocked to weather the season.
Forecasting appropriately is the first step to surviving holiday cash flow problems. Cash flows tend to take a hit around Christmas, Easter and early summer. To prepare for those months when you know cash flow will be unstable, create a cash reserve and find ways to limit expenses well before the season.
Another way to keep cash flow moving is by invoicing early and often – not just once a month. When invoices are constantly going out, you’ll create a steady stream of repayments coming in. Many companies offer incentives for customers paying early, such as taking a small percentage off the bill.
It’s also important to closely follow unpaid invoices. The holiday season gets hectic and your customers may need a simple reminder to pay their bill. Accepting alternative forms of payment can be helpful. Small businesses that accept credit cards not only allow their customers the convenience of paying without the need for cash, but also keep their business cash flow higher because there’s less delay in receiving payment for their goods.
And finally, offering discounts throughout the holidays can be an effective way to increase business and remove any excess inventory. If holiday merchandise isn’t moving, announce a one-day sale the week before Christmas. A 10% discount can boost sales while making customers feel appreciated. Social network sites are perfect for getting the message out. Remember that many consumers choose to shop at small businesses because of the personalized attention they receive, so be sure to provide excellent customer service – even during a sale.
Outstanding customer debt will ruin the cash flow of any small business. Hopefully, some of the strategies discussed will work for your organization. Merchant services through the Credit Union, such as credit card processing, can help your bottom line. For more information, give us a call at 800.866.6474 x2266.