5 ways to keep your business cashflow positive, despite seasonal dips

As a business owner, you are well aware of the highs and lows associated with keeping everything running smoothly. But there are some things you simply can’t control, seasonality being one of them. While the good months make everything seem fantastic, the slow ones can take a real toll on your self-belief and outlook for the future.

The good news is that there are plenty of ways for your business cashflow to ride out the peaks and troughs of seasonality. From diversifying your offering to getting cash-flow financing at the right time, here are five ways to keep your business soaring no matter the time of year.

1. Plan, plan, plan!

Identifying the exact times a seasonal downturn will occur is easy for many industries. A ski resort, for example, knows that summer will bring in next-to-nothing. But for others it’s not so black and white, particularly for businesses that manage clients with fluctuating budgets.

While you can’t always control the specific amount of business cashflow each month, you can reflect on previous years to analyse the particular times that are slower than others. This insight can help you predict future lulls and put in place an appropriate cash-flow forecast to better manage your funds.

2. Think about ways to pivot

If there’s one word that’s been hot on the lips of business owners during the COVID-19 pandemic, it’s ‘pivot’. Restaurants started offering groceries to people in lockdown, alcohol distillers shifted their efforts to creating hand sanitiser, and the vast majority of retailers made kerbside pick-ups the norm.

While the last few years brought unexpected disruption, seasonality is more structured, which means you can plan for it and introduce your own ‘pivots’ during these times.

What can you provide to customers that’s relevant to your industry, and will boost business cashflow even during an expected slow period? Tax agents, for example, might decide to expand their offering to financial advisory or management consultant services, which can be performed year-round rather than just at EOFY.

3. Reduce your outgoings

Re-evaluating your operating costs prior to a downturn can be a savvy way to keep the business afloat and boost business cashflow.

One way you can do this is by negotiating better payment terms with your clients. Even offering a small discount for fast payment could mean you have more funds when you need them most. Or instead of hiring more full-time staff during the busy season, stick to contract employees who won’t be an unnecessary cost to your bottom line when the inevitable slower months arrive.

4. Make the good times count

When money is flowing in thick and fast, it’s easy to forget about the bad months. But it’s exactly during the peaks that you should be working harder. This is the ideal time to take advantage of your business’s popularity, and you can do so in two ways:

• New clients: Ramp up your core marketing efforts during the busy season in anticipation of a trough ahead. An architecture agency, for example, can alert potential clients that they are booking in new work for January (a notoriously quiet time of the year for professional services). This creates a sense of urgency and can be highly effective in flattening out those yearly lows.
• Existing clients: People who know you and use your services are the best opportunity for heightening business cashflow. You already have a relationship with them, so why not upsell them on some of your other services? Depending on the type of work you provide, it may even be possible to get them on a retainer so you can be assured of at least some income during a slow period.

5. Look at your cash-flow financing options

Many businesses, particularly those in the retail space, simply can’t escape the highs and lows of seasonality – it’s built into the very fabric of their operations. So no matter how much extra marketing you do, overheads you reduce and planning you conduct, you can still find yourself in a financial hole.

At this stage it’s worth seeking support from a dedicated business brokerage who understands the commercial lending landscape. Apace Finance has proven experience in securing invoice and cash-flow financing options for business owners, at the most critical times. Even something as simple as a line of credit can provide key business cashflow when you need it most.

“An unexpectedly slow month can take the wind out of any business owner’s sails,” says Ellie Davidson, Managing Director at Apace Finance. “This is where a commercial broker can really help you alleviate some pressure by helping to find the most effective finance solution for your individual needs. Whether that’s a line of credit to overcome the tough times, or cash-flow finance to take care of bills while you wait for clients to pay.”

A seasonal downturn doesn’t have to spell the end of your business. Contact Apace Finance today or call 1300 045 647 to find out how the right finance solution at the right time can make seasonality less stressful.

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