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Cash flow can become quite fluctuating in the seasonal business period. But being prepared beforehand with additional insights into your business’s finance system can help you in time of drought.
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Cash flow can become quite fluctuating in the seasonal business period. But being prepared before hand with additional insights into your business’s finance system can help you in time of drought.
Know when is your business peak & off seasons The peak & offseason of no two business will be the same. It mostly depend on what service or project you are offering. When your business is growing slow, is the time when you prepare for the next busy season, become proactive & make a business plan before hand. Working hard to secure more business and customers during your peak season can set you up for the slower season. With increase in your cash reserve, you can be sure of a better financial position during the leaner months.
Improved Credit Control Bad credit control can lead to a even more downfall during off-season. The main reason for bad credit can be late payments by your customers. Without working capital from late-payers, and fewer opportunities to gain additional income in quieter months, you may be unable for necessity needs. Shortening your payment terms, and requiring deposits, are also tried-and-tested ways of encouraging timely payment.
Make your business plan beforehand Having a actionable plan made beforehand is very much important for seasonal business whose cash flow are unpredictable. By reviewing your business strategy you can understand your business in more granular level. Whether the problem is with your marketing plan, your team, or your current client offering, off season is the time to adjust it.
Budgeting By thinking rationally you can make the right decision for your business & save money. It goes without saying that you shouldn’t spend frivolously when you’re strapped for cash. But continuing to invest in growth is just as important. Cutting down your expenditure entirely will result in a lot of wasted time. Breaking down your budgets into smaller increments and tracking actual spending against them can show you exactly where your cash is coming from and going to.
Forecasting Build a cash flow forecast with the budget you have created, that can help you in predicting your finance future. A cash flow forecast shows you the amount of available cash in the bank at any one time, based on your budgets & actuals predictions of income and expenditure. ProfitBoard can help you budget & forecast for your business so as to keep you going during your off-season.
