Every business has seasonal ups and downs. For many, the Christmas and New year period means customers are away and accounts payable departments might be a little slow to pay invoices. That can lead businesses to struggle to pay salaries and bills and keep things running. But some judicious planning can help ensure you avoid a New Years financial hangover.
1 – Look at the past to plan the future
Most businesses follow seasonal peaks and troughs. For some, those cycles occur annually while for others they follow a different cadence. But a lull over the Australian summer is very common. That means you can plan for it.
Look back through your sales and payment history over the last few years and look at when you can expect cashflow to become tighter.
By knowing when your revenues are at their highest and lowest you can set aside funds to ensure you have enough cash in reserve for the quieter times. That allows you to budget for the quieter and busier times appropriately.
2 – Tighten your belt
You can reduce your costs over the quieter times by looking at what expenses you can cut over the holidays. For example, you can suspend services like Netflix in the office, newspaper deliveries and other recurring expenses so you’re not paying for things you won’t use.
You may even find your recurring costs for cloud-based IT services can be scaled back if systems aren’t being used at the same level.
3 – Look at billing frequencies
One way to avoid summertime cashflow hassles is by smearing costs over the year. Although the default for many bills is quarterly or annual, there are options for shifting to monthly or weekly billing cycles. So, instead of dreading a $5000 quarterly power bill, you can move to a $1700 monthly bill. That way, when cashflow is at its lowest, you won’t be hit with massive bills.
Car registration in some states can be paid monthly as well, and other essentials like insurance can also be moved to monthly cycles.
While you won’t be paying any less over the course of the year, you can flatten the peak and troughs making it easier to manage cash flow and help with budgeting.
Similarly, you can also reconsider your own billing processes and think about shortening your payment terms to get funds paid into your accounts before the holiday break.
4 – Explore financing options
There are a couple fo simple ways to reduce your outgoings and improve your cash on hand position.
If you have a good relationship with your suppliers, you may be able to establish an account with them so that you can make bulk payments for products and services. So, while you continue to purchase goods, you can pay for them later. This will help when your cash balance might be low but you need to get back to work after the summer break.
Another option is to take out a loan with a trusted finance company, like Capify, to help bolster your balance while income levels are lower than normal.
5 – Ramp up your marketing
In the lead up to the quieter weeks, you can invest some time and effort into marketing. For example, you can contact customers that might have fallen away recently to make them a special offer for products or services over the summer.
You can also create special offers for existing clients and use the quieter times to establish marketing and business development plans for the new year so you’re not caught out next year.
The holidays should be a time for relaxation but for many business owners, it can be stressful. But careful planning can alleviate some of that stress and ensure the bills are avoided and you’re ready to fly in the new year.
Capify is the first Australian unsecured small business lender and has been helping SMEs all over the country access responsible short-term finance from $5,000 to $300,000. Capify has contributed to the small business loan Australia economy by lending more than $650M so far in working capital financing.
According to the Australian Small Business and Family Enterprise Ombudsman, Small businesses account for 35% of Australia’s gross domestic profit and employ 44% of Australia’s workforce. Of the 877,744 total employing companies, 823,551 are small businesses (93.8%), and of those businesses, 627,932 are businesses that use only 1-4 people, known as micro-businesses (2019).
However, the main challenge facing small businesses, according to the ABFEO Small Business and Family Enterprise Ombudsman in Australia, is the late payments of customer invoices. Just over half of small businesses receive invoice payments late, with late payments arriving an average of 23 days after they are due, causing cash flow issues to the company.
Accessing external capital to support cash flow is also becoming more difficult, according to Kate Carnell from the ABFEO. In February 2019, the big banks lending to businesses decreased by 2.4%, and since February 2018 it has reduced by 3.3%. However, we have seen immense growth over the last decade, and more small businesses are looking to us instead of the banks to provide them with working capital.
We fund business loans in Australia with different credit criteria than what the banks use, we can also get you the funds within 24 hours, instead of weeks like ANZ, Commonwealth Bank, Westpac or NAB. Capify can also fund businesses with low credit scores and that have had previous unpaid defaults.
Speak to a lending specialist today on 1300 760 930 to get funds in 24 hours or start your application and apply for a business loan in Australia now.
Capify provides fast business loans in Perth and is one of Australia’s leading finance firms that obtain the purpose of providing funds and assistance to any business that require it.
We offer two types of loans of credit products, including; Merchant Cash Advance and Capify small business loan.
Capify is different from competitors with massive support in Australia, helping service brokers and providing easy access to unsecured business loans.
Capify is an alternative to the big banks like Commonwealth, ANZ, Westpac and does not offer a line of credit or interest rates; instead, they work with a fixed rate. Loan terms range from 3 months to 12 months, and their loan amounts range from $5,000-$300,00.
The great news is that Capify’s application costs are free, we don’t charge you when you submit an application for a small business loan Australia. It’s obligation-free and you can commit whenever you are ready.
A great financial product that Capify can provide is Merchant Cash Advance, where this revolves around businesses gaining a lump sum of money and repaying it through minor percentages of their EFTPOS transactions. This would greatly benefit the business as it would prevent cash flow shortages, thus they are able to have the cash to pay debt payments, expenses, and unexpected costs.
Furthermore, enterprises are also introduced to the option of Australian business loans that Capify can provide, increasing capital, thus increasing cash flow. Alongside this, they deliver expert advice that contains knowledge and techniques on how to improve cash management to assist in keeping your business as healthy as possible.
Capify is Australia’s first small business loan lender since 2008, we have built and maintained a google review of 4.5/5.
Speak to a lending specialist today on 1300 760 930 to get funds in 24 hours or start your application and apply now.
Instead Capify offers an agreed total payback amount. The payback amount depends on the type of business you operate and the term you require the business finance for. This way your business knows up front the total costs, making managing your cash flow easy.
A Capify business loan Melbourne can help you make your next purchase, fund growth, or manage cash flow for your business.
Capify provides fast business loans in Sydney and is one of Australia’s leading finance firms that obtain the purpose of providing funds and assistance to any type of business who require it.
We offer two types of loans or credit products including; Merchant Cash Advance and Capify small business loan. Capify is different from competitors with their ideal Melbourne business loans, and their ability to see potential success in businesses without being bias as much as possible on previous credit ratings. We are an alternative to the big bank and does not offer a line of credit or interest rates, instead, they work with a fixed rate. Loan terms range from 3 months to 12 months and their loan amounts range from $5,000-$300,00.
Capify is a fin-tech and purely operates online. We do not have a physical branch but have to staff Australia Wide.