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They don’t call it the ‘silly season’ for nothing. While everyone else is letting their hair down ahead of the holiday period, it’s often feast or famine for small business owners, who might be grappling with either their busiest time of the year or their slowest.

From organising extra staffing demands, to negotiating cash flow over shut down periods, to making sure you get paid before everyone disappears for the holidays – it’s enough to make you want to take a break yourself.

Unfortunately, there’s no rest for the wicked, so here’s how you can minimise these common stresses for your business ahead of the end-of-year (EOY) period.

Negotiating cash flow strains

The simple fact of the matter is that most small businesses fail to appreciate just how hard cash flow issues can impact a business during the EOY period, explains Nick Gregory, business advisory director at Scarlett Financial.

“Retail is particularly hard hit. If you trade through the period, staff penalty rates dramatically erode your usual cash flow,” Gregory says.

“And if your business is one that closes for the period, you need to pay staff annual leave without the usual operating cash flow.”

Fortunately, Gregory says, forewarned is forearmed.

“You should definitely undertake a detailed cash flow budget exercise for the months leading into and out of year-end and be realistic with your sales and related cash collection timeframes,” he says.

Gregory adds that it’s important to understand that the cash flow drain that is caused by the EOY period will typically extend well into January and February.

“This is because your clients may be experiencing a slowdown in their own businesses, which can cause a delay in collecting your sales,” he says.

Collecting unpaid invoices

To assist with your cash flow planning, it’s vital that you start collecting on unpaid invoices now.

Some time-honoured and tested tips for getting the better of tardy debtors include:

  1. Use accounting software to send automatic overdue reminders straight away.
  2. Use friendly language on the phone and get a verbal promise to pay from the paymaster.
  3. If well overdue, consider advising the client you will lodge a default with CreditorWatch rather than pursuing legal action.
  4. Include late payment fees in your contracts with clients.
  5. Offer clients instalment plans or request an upfront deposit.

Coping with extra staffing demands

If you’re a retail business, says Carli Saw, founder of HR consulting firm Strawberry Seed Consulting, you need to start prioritising your staffing arrangements pronto.

“The EOY period is a very busy time for businesses. And, unfortunately, often the easiest thing to overlook is your staff,” Saw says.

“Don’t leave it to the last minute because this will likely be a very expensive mistake.”

When looking to put on additional staff, Saw says the first thing you need to do is define exactly what role you need.

“Where most smaller companies fall down on recruitment is, they just say ‘Hey, we need staff, PM us if you’re interested’,” she says.

“But they haven’t really got a clear idea of what they can pay or the role they’re offering before they go to market, and that causes confusion and delays.”

Small business owners also need to calculate whether a casual or a part-timer on a three-month contract is more suitable for their needs.

“Casuals are more expensive per hour than a part-time or full-time employee. But you’re only rostering them week-to-week,” Saw says.

“So if things do get quiet, you can reduce their hours, or if it gets busy, you can offer them an increase in hours.”

Recruiting staff without the expense

Saw adds that recruiting new staff doesn’t need to cost you hundreds of dollars on recruitment platforms such as SEEK, either.

In fact, she suggests posting jobs on Facebook, in relevant local community groups.

“There are a lot of job boards on Facebook that won’t cost you anything. You can even do promoted posts for a very low fee and target specific demographics,” she says.

To stay open or closed on public holidays

Another big financial decision you’ll have to make in the lead up to the EOY period is choosing what public holidays to stay open for, and what public holidays you’ll be pulling down the shutters for.

To assist you in your decision, we’ve created this handy infographic, which runs you through some of the costs and benefits to keep in mind.

If the best-laid plans aren’t looking like enough to get you through the holiday period in one piece, talk to a Prospa small business finance specialist about how a line of credit could help. Call us on 1300 220 215 – and don’t forget to ask about our EOY 2019 promotion.

The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.

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