Last week, USA Today small business columnist, Rhonda Abrams, shared her first of four #HolidaySuccess tips for maximizing the business potential of the holiday season. This week Rhonda brings us some tips on managing cash flow – one of the top concerns keeping small business owners up at night, according to our 2012 Small Business Cash Management Survey.
For more information on cash management tips and other holiday planning advice, download the full Small Business Holiday Success Guide at www.visa.com/holidaysuccess
Janet – @JZablock
Let’s talk about money—the lifeblood of all businesses.
For some businesses, the holidays can represent almost half of annual sales. But expenses can peak long before sales actually come in. The result? Steep income and expense curves. Those kinds of extremes may be thrilling if you’re hitting the slopes this winter, but as a small business owner, you want a smoother ride.
Here are four ways to help even out your cash flow this holiday season:
1. Sell sooner. You can accomplish this in a few ways: Offer discounts for pre-paid products or services when purchased early in the season; Attract customers early with special sales and events; Sell gift cards and get paid before you actually provide the product or service.
2. Get paid faster. You can encourage customers to pay quickly by accepting credit cards either online or in your store, or, if you’re on the go, with a mobile credit card reader. For businesses that bill clients, remember you can accept credit cards too. And consider requesting pre-payment or require payment on delivery.
3. Reduce expenses. The most obvious way to do this is to avoid buying stuff you can’t sell or don’t use. Remember also to forecast costs; purchase carefully; read your financial statements so you know where your money goes; and reduce waste.
4. Defer payments. If you pay by credit card, you can stretch out your payments if necessary. If you have a stellar track record, ask your vendor for longer payment terms or ask for an installment plan. If you are able to do this and pay with a credit card, you’ve just extended your payment period dramatically.
Even if you run a business that is typically slow during the holidays, you may still find these cash flow techniques useful.
Disclaimer: Practice recommendations are intended for informational purposes only and should not be relied upon for legal, financial, tax or other advice. When implementing any new strategy or practice, you should consult with your legal and financial advisors. Visa makes no representations and warranties as to the information contained herein.
Posted by: Janet Zablock, Head of Global Small Business, Visa Inc. on November 27, 2012 at 2:54 pm