When should you start planning your cash flow for the Christmas rush?
Whether or not Santa Claus is coming to town, your customers certainly are, making now the time to plan for a successful Christmas 2015.
Christmas is a time that brings excitement to business owners as much as children. Many companies provide goods or services that become particularly sought after during the festive period, often leading to a spike in revenue.
According to an ABC report from last year, food retail sales jumped by a huge 2.5 per cent in December compared to the previous month. You'd be forgiven for thinking it's just in the food and beverage sectors; however, that's far from the case.
According to the Commonwealth Bank, 43 per cent of small to medium-sized businesses said they were expecting to see both higher revenue and increased profit margins in the build up to Christmas 2014. There's no reason why this year will be any different to the countless Christmas periods that have come before - exciting times indeed.
And yet there's a problem. Without the right cash flow planning, a business may find its profitability severely limited. If a company doesn't have the cash flow to build stocks, it could be left unable to capitalise on the lucrative sales period.
So, when should a business start planning for Christmas? Many already have - though if you haven't, it's not too late.
Getting your cash flow moving
Do you find that your cash flow tends to trickle in at a time when you need it to be a white-water rapid? Customers all slow down with their payments to preserve their own cash flow during the pre-Christmas peak.
This typically makes it difficult to afford the stock or equipment needed to plan for the Christmas period. However, debtor finance is designed to help in such a scenario.
Invoice Discounting (as it is also known) is the payment of your current but outstanding invoices by a finance provider, giving you immediate access to capital tied up in your debtors instead of having to wait.
By looking into an effective finance solution today, you can take out some of the dams that cause constant blockages to your cash flow, providing you with more confidence to forecast your spending around Christmas.
What to expect for Christmas 2015?
Whether or not Santa Claus is coming to town, your customers certainly are. The fourth quarter is looking particularly promising in terms of revenue and profit potential.
Dun and Bradstreet's most recent report on the matter shows that sales expectations in Q4 have reached their highest point in more than a decade.
To find business finance solutions that suit your needs, call Classic Funding Group on 1300 780 895 or contact us online for more help.