Summer holiday heat sparks cashflow issues for SMEs Summer holiday heat sparks cashflow issues for SMEs

Opus energy has put together the top five tips for managing cashflow issues throughout the summer.

 Summer holiday heat sparks cashflow issues for SMEs

The summer is notoriously difficult for SMEs to manage cashflow

With sunshine, BBQs, beach trips and picnics, it’s supposed to be the most wonderful time of the year – but let’s face it, the summer holidays are tough to negotiate when you’re a small business owner. Either your business gets eerily silent, or you’re overwhelmed with the holiday sales rush.

But what are the best ways to deal with it all, while maintaining your sanity?

Here, Sarah Musgrove from Opus Energy, describe some of the biggest challenges small business owners face during the summer holidays, and some practical solutions:

Staff asking for time off

It’s important to remember that employees have lives outside of the workplace; they have families, events, and to-do lists to check off, just like you.

Make sure to ask ahead for everyone’s availability, and give a deadline for employees to book holiday time off by, so that you can plan ahead and ensure you don’t have too many people off at the same time. If need be, you can hire temporary staff to cover any missing positions, or part-time holiday staff, if you have a retail location.

Increased sales and/or customer traffic

If you own a storefront, the sunny weather can bring with it an increased footfall. Be prepared by hiring part-time holiday employees to cover the rush. Any extra money you’re spending on staff can easily be made up in sales, thanks to better and more attentive customer service.

Managing fluctuating cashflow

The summer holiday period is often a critical time for small businesses, not least because many managing directors, clerical assistants and finance department staff are on holiday and the New Year. As a result, payments often don’t get made, cheques don’t get signed and small businesses often experience real problems with cashflow at this time.

During this time many business owners have to resort to costly bank overdrafts to see them through or, worse still, the company credit card, both of which can exacerbate their weak cashflow positions in the short term.

Try to forecast potential financial problems to ensure you, or your staff aren’t caught short this summer.

Reduced business hours

It doesn’t matter what industry you’re in, you will inevitably be clocking in fewer hours around summer, due to statutory holidays and employee vacation time.

The best thing you can do to prepare for this slow period is to account for it in your business calendar. If that means you need to adjust your sales targets for the rest of the months of the year, to make up for that reduction, factor that in as well.

Distracted employees

Summer is the time of year when we all have extra things on our minds, not to mention the appeal of the sunny weather beckoning us outside the window. With many counting down the days until their holiday, it’s not difficult for morale to be sapped, which can result in lowered productivity. How do you counteract this? Now is as good a time as any to recognise your employees’ contributions and give them the morale boost they deserve.

Some companies allow employees to leave early on Fridays during the summer season, for example, while others throw a summer party outside of working hours. Keeping your staff engaged and their morale high during this time will ensure that the summer slump doesn’t impact the firm overall.

Further reading on cashflow

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