Setting your seasonal business up for success-including positive cash flow

If you operate any type of seasonal business, you know there are ups and downs and fluctuations during your fiscal year. It’s important to have a game plan in place to manage the busy times and survive slower periods.

We serve as a collection agency for seasonal businesses among others and we can tell you that cash flow can be a struggle for many that operate at different volumes during the year.

If you are running a seasonal business, check out our tips to prepare for your busy season and maintain a positive cash flow throughout the year.

Keeping a close eye on cash flow

Cash flow is the backbone of any size business and even more important in a small business. You can’t take your eye off the ball when it comes to cash flow because it can have negative consequences in a short period of time. In a seasonal business, using historical data to predict sales for the upcoming season is vital. You may also want to adjust for any changes in market conditions or new competition in your area.

Controlling expenses is mission-critical in a seasonal business. You should identify any type of non-essential expenses that you can minimize or even eliminate during your slow season. And many businesses find success in offering special offers or discounts before being busy season. That can give you a cash flow a little bit of bump when you need it the most.

Get current with your accounting procedures

The offseason is a great opportunity to make the busy season run smoother and less stressful. One of the best ways to do that is to keep all your accounting current and up to date. Work with your bookkeeper and CPA to make sure all your transactions are recorded and reconciled and of course use up-to-date accounting software to streamline your process. Make sure you review all your financial statements to get a better understanding of your financial position and your cash flow. Work with your professionals to identify any areas for improvement. You’ll also want to update your budget which should include your expected revenues and expenses.

Managing accounts receivables for busy times

When you sit down with your bookkeeper and CPA, you should review all your receivables and identify any overdue accounts before they become a problem. Follow up with those customers to make sure they are getting current in their financial obligation to your business. During your slow season it’s also a great opportunity to streamline your invoicing procedures. Make sure your invoicing is timely and accurate and consistent. You can also evaluate your credit policies and credit terms and if you need to tighten them for various customers that have a history of late payments, do so.

Don’t wait to utilize the services of a reputable debt collection agency. Now is the time to find one that understands your business and is a good fit for you and your customers.

Proper inventory management

Many seasonal businesses also require proper inventory management. For example, if you’re running a landscaping or lawn care company, you may need to ensure you have enough fertilizer and other supplies coming in at regular intervals. When you have downtime, this is a great opportunity to review how you manage your inventory, so you don’t tie up vital cash flow. You may also take this opportunity to negotiate with your vendors for better pricing.

Marketing and other awareness

If you wait until you’re busy to start marketing, you’ll probably never get to it. That is why it’s important to plan any type of marketing campaign or activity in advance. No matter what you use—social media or good old-fashioned paid advertising—it’s a smart move to plan out your busy season so you can maximize any opportunities.

Taking advantage of fluctuations in volume and business will help your seasonal business operate smoothly and efficiently when you need it most. It will also up your chances of positive cash flow throughout the year.