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  3. Tips On Solving Seasonal Cash Flow Issues
 Tips On Solving Seasonal Cash Flow Issues
Business

Tips On Solving Seasonal Cash Flow Issues

by KredX Editorial Team September 7, 2018 0 Comment

There is a level of seasonality inherent in the sales potential of certain businesses. A major examples for this is the hospitality business. Holidays tend to attract a major chunk of the business’s revenue streams. This works at different degrees to most businesses. Be it E-commerce, retail or even the refurbishment industry; there would be an uptick in business around the holiday season. The problem, however, is that cash flow can become an issue when the business is not attracting enough customers. Here are a few financial tips that can come in handy for businesses who rely on seasonal business.

Understanding the Slow Seasons

It is imperative to do a staunch analysis of the operational requirements as far as capital is concerned. This can set a good precedent for understanding the monetary requirements your organisation would have to face at the time of dipping business revenue. All businesses have variable degrees of slow business seasons. The idea is to be prepared for them in a manner that would not let your business suffer. Forecasting an incoming season of slow business and pinpointing them as cycles that your business would have to go through would help your company be better equipped to deal with the operational costs.

Delaying Payments

There is a very nuanced difference between delayed and late payments. Embrace this subtlety with the whole of your heart and it can deliver you from the tough times. Keeping cash in your accounts as long as possible will make a huge difference in slow seasons. It will encourage the confidence you have in your business and open up other avenues of financing options that could come in handy. Although, this is a slippery slope as you need to be careful about not being late on your payments. This could lead to consequences that would impact your business quite negatively.

Cutting Costs

This is an obvious solution that can help your business that is currently in operational crisis. Cutting down cost is a piece of advice that is timeless and is not even bound by context. For businesses it is always a good idea to cut down on cash bleed. It helps tighten the cash flow and boost the functional optimum of a company. It would always be handy to know a “bare minimum” way of running your company during the off seasons when your business just isn’t taking off. This is also relevant advice because low turnout for your business also means, a bare bones functionality could easily sustain the demand that would be raised.

Finding Alternate Financing

There might be times when anticipated revenue was just not forthcoming. Instead of doubling down and struggling to keep your business afloat, the smart choice might involve finding another line of credit. Invoice discounting is a good way to get through a financial crisis that is brought about by seasonal cash flow issues. The process would warrant your unpaid invoices as collateral for a line of credit that could help you sustain through difficult times. KredX is an invoice financing marketplace that is currently helping small businesses solve their operational cost problems. If you are a small business owner struggling through the rising operational costs that are hitting you at the wrong end of the season, it might be a wise decision to take up the services of KredX.

Seasonal cash flow problems hound businesses and make functioning very difficult for small businesses. There are many ways to combat the increasing capital requirements that are hitting you every day as a result of lowering sales. It needs to be said, that finding alternate methods of financing might just be your best option to get through this crisis.

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