Article written by Alan Shannon (Executive for Client Engagement, Private Clients and Small Business Services – Nedbank)
Currently, many small businesses are welcoming the ‘busy season’. Depending on their products and services, the festive rush makes a big difference for some business owners, especially if they have fewer customers during other times of the year. But no matter when businesses experience their peak season, there is a significant difference in cash flow during the ‘quiet season’, making budgeting and paying salaries and bills more challenging. It’s important to find a balance between managing busier times and planning for quieter months.
On the Nedbank’s SimplyBiz™ platform, driven by small business owners, there are inspiring stories about how planning ahead made all the difference, with key insights from a network of entrepreneurs that have helped small businesses through the slower times.
Having the right mindset
Thinking positively won’t bring in customers, lower expenses, or fix load-shedding. The reality is that there will be times when, as much as you try, you will experience a drop in profits or even losses. For some businesses, this happens regularly. Stationery stores, for example, make most of their sales during the back-to-school period. But by thinking smarter about how to counter a drop in sales or productivity will help you plan proactively for the quiet months, and such a mindset fuels success.
Acting like you’re your own taxman
Maintaining good customer relationships is the cornerstone of good business. However, far too many business owners say that they allow customers a longer repayment period than they prefer. Many business owners on SimplyBiz™ agree that the sooner you collect money due to you, the sooner you will have the cash available to take care of your business needs and own liabilities. Trying to collect money during quieter months usually leads to making compromises or offering unnecessary discounts.
Becoming obsessed with your business
Every cent counts in business, especially during tough economic times. That is why successful business owners use tools to track their money, and not only once a year. Some business owners do it monthly or even daily. Tracking your money will give you a clear picture of factors like peak and low periods, helping you to plan in advance. Having these insights will also help you when you might need to secure credit to cover ‘unexpected’ expenses or equipment during tougher times.
Knowledge is power.That is why Nedbank advises its clients to keep track of their cash flow and expenses, and to do a proper cost analysis with the same level of effort that they apply to sales and operations. There are free online banking tools available to help you compile this information, which will help to avoid making quick, reactive decisions during quieter times in your business cycle. It’s empowering to be prepared for the worst, armed with data that gives you greater confidence in your decision-making.
Visit the SimplyBiz website on: www.simplybiz.co.za
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