For many businesses the holiday period means a complete or partial shutdown for up to four weeks, often resulting in drained revenue chalked up to holiday leave pay and overdue accounts.
But Roger Mendelson of Prushka Fast Debt Recovery told My Business that there is a way for owners to ensure their business thrives.
"Spend 10 minutes to prepare a simple strategy which will help you sail through this troublesome period unharmed," Mr Mendelson advised.
He outlined the following steps:
Work on your outstanding accounts
Collecting accounts, usually an unglamorous, backroom function, should be prioritised this time of year. Make sure you have enough staff who can tackle the job – contacting customers and obtaining payments by credit card or arranging installment plans over the phone should be at the top of your list.
Move old stock
Dormant stock taking up valuable space? It’s time to mark it down and get rid of it. This way you’ll generate returns now rather than at a high margin on the same stock in a few months’ time. This also extends to surplus equipment, run some ads on Facebook to move it out.
Defer spending and ask for credit
Avoid spending money on any non-essential items until your cash flow is back to normal. If you must acquire new equipment, consider negotiating deferred trading terms. Most suppliers will agree to a payment plan in equal instalments if asked.
It can’t be stressed enough how important it is to seek professional advice from an insolvency practitioner if your business looks like it is under financial pressure. If the warning signs are there, heed them and seek advice early. Common warning signs are that you are finding it difficult to obtain credit, payday becomes a struggle, and you are behind in paying your BAS. Don’t wait until it’s too late.
The enforceable life of a debt in most states is six years, so just because you’ve written-off an account in your books doesn’t mean that the account isn’t legally owing by the customer.
Now is the time to collect your written-off accounts and send them to a no recovery no charge debt collection agency. You’ve got nothing to lose and are likely to recover around 40 per cent of those accounts.
Many online lenders now service the SME sector, and if you have a clean credit record, getting approval is much easier than from a bank. Only take out short-term loans if you have a strategy in place to repay it by the due date.
Advertising and promotion
Just because you can operate in the short term without advertising and promotion doesn’t mean you should cut spending in this area. Many of your competitors will slash spending in this area, now’s your chance to increase visibility and share in the marketplace.
We have entered a dangerous quarter, plan for it and don’t let your business become another statistic. Develop a plan of action following the steps set out in this article and watch your business coast through this punishing period.