The summer holidays are upon us. This we know because the retailers are already putting out the Festive Season decorations and because our mentorship clients who are not in retail are getting anxious about meeting their cash flow requirements.
Since you serve as a mentor or business advisor to such clients, how do you advise those who are anticipating that they will be running short of cash in December and January due to a significant drop in their sales? What are the tips you offer them? And what else could you include in your advice for them to consider?
These are some of the questions that will be answered during the next IBASA & EPI Webinar on 15 November.
Get your seat now at << webinar.the-epi.org >>
The topic of the webinar is:
“Advising your clients on ways to bridge
the cash crunch over the summer holidays.”
In preparation of the webinar, the producers approach business advisors to ask what tips they offer their clients. Here are some of the tips they shared:
- Manage your debtors
- Make sure you send your invoices on time and follow up in the weeks before the holidays start.
- Offer a discount on early settlement of client accounts or negotiate with your main debtors for early payments.
- Manage your supply
- Negotiate special terms of payment with suppliers for this period to pay either in smaller instalments or carry over to after the holiday period.
- Take advantage of holiday offers by suppliers.
- Consider changing suppliers who may offer better prices — it may be a good time to ask for discounts.
- Seasonal cycle
- Take note of clients who close early for the summer break and make sure they pay you before they go on holiday.
- Overheads management
- Fine-comb your overheads and reduce your costs to the bare minimum.
- Scrutinise the expenses of partners to ensure no personal expenses are carried by the business.
- Marketing solutions
- Take pre-orders for next year and offer a discount for prepayment.
- Offer a new premium package of products or services for cash or pre-payment only.
- Offer good discounts to potential customers who previously indicated they cannot afford your services.
- Explore new customer segments in advance of the slow period so that you add a service or product that will sell during this period.
- Use digital and social media marketing to attract new customers.
- Collaborate with other companies who are experiencing increased business in this period.
- Cash flow management
- Have your finger on your bank account by cancelling your debit orders and pay your accounts when the funds are available
- Plan to pay your expenses due for the slow period earlier in the year.
- Building capacity
- Set aside a portion of your sales every month from January and keep it ring-fenced in a separate account to use during the slow months.
- Build stock of fast sellers prior to the slow period so production costs are reduced but sales aren’t affected as stock is on hand.
- Put the business credit away from at least a month in advance of the holiday period.
- Use funding
- Apply for a short-term overdraft facility with your bank, to redeem fully within the shortest time frame possible.
- Borrow money from trustees people or businesses in your network.
- And ONLY when it is an extreme crisis, draw what you can from your credit cards to cover the shortfalls in this period.
The webinar on the 15th to explore practical ways of applying these tips for your clients.
Click << webinar.the-epi.org >> to book your spot for the IBASA & EPI Webinar.