Whether you’re a new start up or an established business, the chances are you experience seasonal highs and lows.
The lows can be stressful and can bring much pressure to business owners, especially SMEs. So here we have put together our top tips on managing your business seasonal lows...
- Understand your industry high and low cycles - The surge of a new start up business can often mask when your natural seasonal highs and lows will be. These peak and troughs may have been identified in your business plan, but if not, you should carefully monitor your production and sales trends. Also, ensure you put a percentage of profits by for any unforeseen circumstances and inevitable lows.
- Sell last season’s stock - It’s not just clothing retailers that need to shift last season’s stock. Old stock has not only costs you money but it also takes up valuable space. Don’t take the risk of not selling it at all as trends and demands change. Even selling it at a discounted rate is still money on your bottom line and certainly better than writing it off.
- Keep in touch with your customers - During low periods, your products or services might not be at the forefront your customers’ minds but you should make sure that you are. Remember, a competitor could be using this downtime to muscle in on your customers, so you need to make sure they don’t forget who you are. Email campaigns, blog articles, SMS text alerts, for instance, are all great ways of keeping your customers up to date on new product developments, news and views.
- Assess your expenses - Low periods are a great time to sit and review all your costs. Are you making the most of running expensive machinery? Have you got the best rates on storage units? Could you swap to seasonal temporary staff? Even reviewing electricity, internet and mobile rates for instance could make significant savings.
- Invoice accurately and promptly - Half of all invoices are incorrect, leading to even later payment. Ensure that you issue your invoices not only promptly but accurately too!
- Re-evaluate your opening hours - Simply being open costs money – for example, electricity. So look at whether reducing your operating hours during lows can make a difference to your overheads.
- Rent out your assets - Can you make money out of your assets by subletting or renting them out to others? You’d be surprised by how many businesses need equipment on an ad hoc basis without the effort of purchasing themselves.
- New Product Development - Research into new product developments, especially those that would utilise your quieter periods. There could well be a natural add-on product line or completely new product and service that you could offer in your downtime, which can effectively fill the sales troughs.
- Look into Invoice Factoring - When you’re in a seasonal low, waiting for late paying customers can be even more stressful than when you are experiencing a high. So, to avoid suffering from delayed payments of 60, 90+ days, consider factoring your invoices. Invoice factoring will pay up to 90% of the invoice value within 24hrs, paying the balance when your customer pays. What’s more, you don’t need to go for a long term commitment; you can choose to factor selected invoices or plump for an ICON (In Case of Need) facility. This can smooth your cashflow…and your stress levels!
To learn more about how invoice factoring could help your business, just as it is helping out 40,000 plus UK businesses, get in touch with our expert team today. Call 01908 268888 today!