Budgeting Tips For Seasonal Businesses
Budgeting and maintaining a regular cash flow is a challenge for any business, especially when the times are boom and bust. Planning ahead can make periods between peak sales less stressful. By applying these budgeting tips, you can keep your seasonal business’ finances stable year-round.
Set a base budget
While peak season may bring new expenses, it’s useful to have an idea of the minimum budget required to run your business for the rest of the year. This can help you better assess your off-season cash flow needs.
Create a financial cushion during the high season
When you’re in the midst of a seasonal boom, it’s tempting to spend a little more if you have extra cash. However, staying within your minimum budget can also benefit you in the off-season if you have cash in reserve.
Save, save…and save more
The off-season is perfect for checking your budget and seeing where you might be spending money unnecessarily.
Look for ways to avoid unnecessary overspending. Budgeting app like MoneyPatrol (https://www.moneypatrol.com/features/) can help you monitor your financial accounts. With the help of this app, you can make relatively small changes that could result in big savings for your business.
Check your payment terms
On-time payments aren’t always a given. However, when you’re running a seasonal business, you can’t afford delays with outstanding payments.
Take a look at your payment terms to check which payment terms you offer your customers and whether there are repeat late payers.
Think of ways to get your customers to pay if changing the terms isn’t possible. You might be able to offer an early payment discount or set a fee for late payments.
Introduce new services
Reducing expenses and changing billing terms can add to a seasonal budget, but it may not be enough. If you run a service business, expanding your current offering could help increase sales when things aren’t going well.
Increase your budget with off-season promotions
Running a promotion or sale during the quiet months could be the perfect way to put some cash back into your budget. The catch is that you may not have a lot of money to spend on marketing and promotions.
You can create and run a local campaign with no upfront cost. This allows you to create exposure for your business and promotion without having to leverage what may already be a strained cash flow.