The holiday season can be a stressful period, for businesses and people alike. With 75% of Australians planning to spend less this Christmas, customer spending is just one of the many seasonal impacts SMBs need to be wary of these holidays.
To help you navigate the silly season and enjoy the break, our business advisors share tips to better manage seasonal ups and downs and steps to get your business holiday ready.
Where are your ups (and downs)?
Managing the ups and downs isn’t always about how fast you can react. It’s knowing when (and where) they’ll hit.
This starts with understanding your cash flow. What months have the highest cash flow? When do you have the most (or least) sales? For an online business, the holidays might cause record sales. If you’re a service provider, the Christmas period might be your lowest.
By using your financial data, you and your business advisor will be able to drill down into seasonal trends. This not only helps you prepare but also set more accurate budgets and be strategic with savings.
The more detailed the data, the bigger picture and more trends you’ll identify. This is why keeping your financial data up to date is essential, and how meeting with your business advisor regularly to go through insights can get you ahead.
Do you have holiday risks?
The holiday period also comes with additional business risks, some known and some unknown.
With many suppliers closing over the holidays or using skeleton staff, you need to take into consideration any impacts this could cause to stock, project and delivery timelines. Working with your suppliers, you can take proactive steps to ensure your business is not disrupted.
Your business might also have the opposite problem and end up with too much stock over the holidays. Doing a stocktake and tracking your inventory will help you put measures in place to reduce stock wastage and avoid overordering.
Holiday risks don’t just come in the form of stock and inventory. Cybercrime also spikes during the holidays. With 62% of Australians sharing they’ll buy their gifts online, it’s no surprise cybercriminals take advantage of this shopping-frenzy period.
While it may not appear to be a business risk, if your staff are using personal devices during their holidays they could (unknowingly) be putting your systems, data and business at risk. As well as training your team of security dangers, it’s important to have security practices in place to keep you and your data protected.
Your office may also be unattended for weeks at a time. Before you go on leave, it’s important to check your security systems are working properly and also make sure your insurance is up to date in case the worst happens. This is especially important for those in building and construction, with expensive equipment and materials potentially left on site during the break.
Cash flow risks
Using forecasts and trend reporting from your accountant or financial advisor, you can identity how much cash is projected to come in and how much of that you’ll need to put aside. This will also help you create a realistic budget.
When reviewing your cash flow, it’s important to look at not only your projected incoming cash but also your expected outgoings and financial commitments you need to prepare for. Working with someone such as your business advisor, you’ll be able to identify revenue gaps and put measures in place long before you run low on cash.
Some businesses may need additional staff over the holidays, others need none or very little. Understanding what resourcing you need to maintain over the holidays will not only help you budget better but also identify any risks to project or service delivery timelines.
If the period is quieter for your business, think about a closing your business for a period to reduce staff and operational costs.
Not sure where your risks may be? Completing our online risk survey might be a good place to start.
Tips to get your business holiday ready
- Communicate your holiday hours
Let your clients and suppliers know your holiday hours, updating any client systems and phone messaging systems. This ensures they know when you’ll be available as well as who to contact if the matter is urgent.
- Get your payroll ready
Who’s doing your payroll while the office is closed? Can you automate the process? Make sure there are no assumptions, avoiding awkward calls from staff waiting for wages to be paid.
- Forecast the holidays
To ensure you have sufficient funds for the break, it’s essential to generate forecasts well in advance. Identifying what’s coming in and what will need to go out will help you take proactive measures.
- Be cyber safe
If your staff are working remotely, make sure they have a secure way to access your systems, files and data. Share cyber safe tips so they know how to keep themselves safe while traveling, such as avoiding public wifi and only using trusted devices.
- Gift giving
Employe gifts below certain amounts are tax deductible, provided they there is no Fringe Benefits Tax and they are not considered entertainment. As amounts and rules change, chat to your business advisor or accountant to make sure you’re in the tax know.
- Have a disaster plan in place
Sadly, here in Australia many natural disasters occur during the holidays. To avoid precious downtime and business disruption, it’s important to have a plan in place that allows you to continue business as usual if a disaster was to occur.
- Get your admin under control
Use the quieter periods to get administration tasks up to date, ensuring your books, inventory and invoices are under control. This ensures you’re starting the new year with everything in order.
- Review your pricing
When did you last review your pricing? The holidays could be the perfect opportunity to review your pricing and material costs. Working with your business advisor, you can also identify opportunities for revenue growth.
- Reflect and celebrate your successes
Take time to celebrate milestones reached and goals completed. Not only will you end the year on a high, it’s a great way to bring your team together and review goals you’ll need to tackle next.
Plan for the year ahead
The holidays are a great way to reflect on your current goals and ensure they are still relevant. You can also work with your business advisor to revise your business goals and use the holidays to create new strategies to help you get there.