How can I even out my bumpy, seasonal cashflow?
Thursday, November 1, 2012/
My business has seasonal surges, which results in bumpy cashflow.
I’m worried this will hamper our growth. Is there any particular strategy I can put in place to ensure a steady, healthy cashflow?
Businesses in specific industries, such as retail and tourism, are often affected by seasonal fluctuations.
The rollercoaster ride of living from a sales flood to drought can often be unnerving and stressful for the uninitiated.
Planning is the key to survival and realistic cashflow forecasting is a business’ best friend.
Cashflow forecasting need not turn into a PhD thesis. Keep it simple and be reasonable with earnings/revenue and try not to downplay your outgoings.
You can find plenty of cashflow templates online, but a simple spreadsheet highlighting your expected monthly revenue and outgoings projected over a 12- to 18-month period should do it.
Just remember – don’t let the cashflow forecast gather dust – it is a dynamic document that must be regularly updated.
A well prepared and maintained cashflow forecast will highlight the ‘surges’ and let you plan purchases without you hitting the bread line. It should also play a key role in determining your marketing and advertising plan.
A great piece of business logic and advice handed to me many years ago went like this: ‘The busier you are, the more you should promote’. It is counterintuitive and not something that most businesses do.
Most wait for a lull in sales, panic and then start pushing the brand. If you’re aiming for steady and consistent cashflow – you have to plan for it months in advance.
Growth without a strategic plan in place often results in confused and unhappy clients and staff.
Running a business is more than just looking after your current clients, it is also about growth.
Don’t rely on chance or luck for growth – plan your marketing accordingly, articulate your vision to staff and clients and watch that cashflow turn from a fun park rollercoaster to a leisurely cruise.
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