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At present around a quarter of UK businesses fail to plan financially to see them through any potential seasonal disruptions to trade.
A range of different factors such as seasonal holidays, weather, religious celebrations and political issues can influence or disrupt a company’s trading cycle, which can lead to cash flow issues. That’s why we’ve put together 4 key tips to help you overcome the effect of seasonal peaks and troughs throughout the year.
It is essential to know your company’s business cycle throughout different seasons; this can be done by analysing previous years’ sales to know when to expect highs and lows within the business. For companies just starting out this can be a challenge as you won’t have previous data to analyse, so considering the seasonal cycle of your competitors can be a great place to start. Keep an eye on the competition to see what kind of promotions they are running at certain times of the year. If a business has been trading for several years it is a lot easier to indicate seasonal cycles from previous data, no year will be the exact same as the last, but it will be useful when planning and forecasting for the year ahead.
From analysis of your, or your competitors’ previous yearly activity, you will be able to plan for when potential seasonal dips may hit the hardest. Having promotions planned around these times is a fantastic way to drive sales in any business. For retail business owners, it’s a great idea to have a “mid-season sale” to sell off last season’s stock that may be filling up your stock room. Other types of companies can also introduce mid-season sales by offering their products or services at discounted prices.
Make sure that at busier times of the year your business is fully equipped with stock, and enough staff to ensure a great customer experience. If you’re a restaurant or pub owner, you may need to recruit extra staff around the times that you’re running discounted offers on food or drinks. Whichever sector your business operates in, maintaining good relationships with people who are available to work freelance or seasonally is a great way to always be prepared for busier periods.
When forecasting cash flow for the coming year, seasonality is one of the most critical elements to consider. Many businesses suffer from cash flow issues, therefore effective planning is one of the easiest ways to overcome this issue. Reviewing previous years’ figures is key to ensure that you have sufficient working capital throughout seasonal peaks and troughs.
Quick Capital offer a cash advance for business owners to help overcome seasonal disruptions to trade. A business cash advance is a simple way to raise finance to purchase stock, boost your cash flow, and cover unexpected costs throughout the year.
To find out more about Quick Capital’s cash advance for business owners, call one of our advisors on 0800 3777 402 or visit www.quickcapital.co.uk
Filed under: Advice