DRIVE STARTUPS We Present Latest Startup News, Tips & Inspiration
Depending on the type of business you run, the December holiday season can either be the busiest time of the year or the slowest. But even the high season can be a low for your business if don’t pay careful attention to your cash flow.
Take staffing for example. You know you’ll need more staff in your busy season, and you know part-time staff is the way to go. But how many workers on which days of the week and at which hours? You need to determine that you have the right number of part-timers working the right number of hours — or even flexible payroll spending will be a straightjacket on your finances.
Related: It’s Your Busy Season. Don’t Drop the Ball.
If you’ve got a newer point-of-sale (POS) terminal, you should be able to run a report which shows your busiest days and times during your last peak season. This can help your planning in several ways. The first is a simple financial gut check: Take a look at what your sales were by day last year and what your expenses were during that same period. If you were in the red during your prior busy season, that doesn’t bode well for the rest of the year, and you might want to consider finding ways to cut costs. Then, use your report to plan staffing: If it shows that Mondays were slow from noon to 6 p.m., pare back your staff during that time slot this season.
Next, focus on your equipment and inventory needs. Rather than replacing equipment for aesthetic reasons, focus on equipment that can make your business run more efficiently and cost-effectively. Do you have enough cash registers or checkout card readers to get you through the season? Are they updated to accept the new, more secure EMV (Europay, MasterCard and Visa) credit cards?
As of Oct. 1, 2015, if your business doesn’t use a credit card terminal that can process credit cards with chips embedded in their face, you could be liable for any fraudulent credit card use through your system. EMV systems aren’t that expensive, even those that can also handle the near-field communications (NFC) technology in ApplePay, but if you need to buy multiple terminals, it could add up to a large dent in your cash flow.
Before you bulk up your inventory, you need to run another report on your POS system. Many versions of this software now include inventory controls which can help you see what your business really sells each week. If it shows particular brands or items aren’t moving, don’t include them on your order sheet this year. Then, see if the suppliers of your top-moving items will give you payment terms that will let you spread your costs across your busy season.
Related: 3 Holiday Retail Trends Entrepreneurs Need to Consider
Offer to share last year’s POS report with them, and talk about your plans for selling more of their product this year. Do your suppliers have new products they want to get in front of customers? Consider which ones might resonate with your customers — then ask the company if it will share your marketing costs for that item. The savings you could get from a co-op advertising program could go a long way to improving your cash flow.
The same can be said for better invoicing. If your business is only invoicing customers once a month, the high season could be over before you collect all the money owed to you. That’s not going to help you pay for the labor and supplies you need to get through. Instead, sign up for one of the new Internet-based invoicing programs for small businesses. They can make it a snap for your staff to invoice customers before leaving the jobsite. Spend a few minutes setting the program up with the descriptions and prices of all your services, and train all your workers in its use. These programs also let you easily spot invoices which haven’t yet been paid, so you can make more timely payment reminder calls.
Mark Verespy is the owner of a Vermont ski resort pub who I’ve known almost since he opened his taps 10 years ago. He was adamant then — and now — about creating a nest egg from every busy season’s earnings at The Killarney to put toward his slow season. He’s worked with the ski resort operators on events that keep the visitors coming long after the snow melts, and he’s learned to use alternative finance judiciously. That prudence — plus a hawk’s eye for cash flow details — has kept Mark going far longer than many restaurants, including those that don’t have to deal with big seasonal swings. Consider him your cash flow role model.
Related: 2015 Will Likely Be Known as the Year of Mobile Commerce (Infographic)
Source link
