This article first appeared February 7th, 2012.
My year is off to a very quiet start, sales-wise. What can I do to get through it?
The majority of businesses have busier and quieter times of year.
This is a practical reality and clearly this is something which needs to be managed and planned around, otherwise the ramifications could be serious.
There are many steps that can be taken to reduce the impact that this will have on your business.
Cumulatively, they can combine to great effect.
Cashflow is the first major concern, because without it the survival of the business may be put under threat.
Planning ahead is the crucial issue here. Be particularly diligent in following up your debtors in the months leading up to the quiet period, and this will allow you to build up a cash reserve to pull you through.
Conversely, try to put off paying your creditors as long as possible, and if necessary discuss this with them.
Explain that business is quiet and you may need some extra time. If you’ve already developed a good reputation for payment and a strong relationship with your suppliers, then this shouldn’t be an issue for them.
A complementary option to the above two suggestions is to get credit facilities in place prior to the quiet season, with the aim of clearing this debt as quickly as possible once things pick up again.
Some costs are fixed and others are variable. As work flow decreases, variable costs should also decline and so the minimum goal is to have enough cash flow to cover all fixed costs.
Wages are not a variable cost, at least where full time employees are concerned. However, whilst the cost of a full time employee will remain constant throughout the year, their output will not, so consider ways to utilize your employees when they are needed most.
Encourage your employees to take leave at times when business is quiet, and implement policies or incentives to achieve this.
It may even be a suitable time for yourself, the owner, to take a well-deserved break.
Integrate your marketing strategy to fit around the reality of busy and quiet periods. Sit down before the quiet period and discuss stock that will sell well during that period, or whether there are any value-added services that you could introduce at that time.
Plan how you will conduct advertising to increase turnover and generate revenue. If necessary, engage a marketing consultant.
Finally, think outside the square and consider how the quiet season might play a complementary role in the context of a 12 month cycle.
Utilise this time to improve or change business processes, complete technology or equipment upgrades, and do business planning and cashflow forecasting.
Ensure all relevant compliance is up-to-date, whether it be tax, occupational health and safety and whichever laws and regulations govern your industry or profession.
Doing this in the quieter times will put you in a strong position to be operating most efficiently at times when that is required.