Year-End Business Checklist
As we head into the holiday season, here are our top six business tips for ending 2018 on a positive note.1. Communicate with customers
It’s polite – and important – to inform your customers about your year-end operating schedule. They need ample notice if you’re planning to shut up shop. Be clear about the dates you will be closed. This way, you can manage their expectations and avoid a situation where they need your products or services but they’re unable to reach you. This may put your business relationship under strain in the new year.
Alternatively, if you are going to be operating with skeleton staff, give your customers a heads up so they know not to expect the same levels of productivity that you’ve offered through the year.
Prep your people
It’s been tough year and employees may be tired, losing concentration and difficult to motivate. It’s critical at this time of year to make sure that all employees know what’s expected of them – and what they need to complete or deliver before they go on leave. Discuss tasks and goals with each employee and make sure he or she is able – and driven – to meet these expectations.
Resource your business
If you run a seasonal business, December and January may be your busiest months of the year. In this case, make sure that you have sufficient resources in place to deal with growing demand for your products or services. In addition to hiring enough skilled staff, you may also need to make sure that you have enough working capital to fund the extra raw materials, labour and other running costs required.
To ensure you have enough working capital, keep a close eye on your accounts receivable over this peak period, so that you can bring cash into the business faster than you need to spend it. As a longer-term strategy, you may need to review your invoice management process and ask whether you are able to invoice swiftly and accurately; and manage payments effectively all year round.
Review your pricing structure
As you head into the peak season or as you prepare your strategy for next year, it’s advisable to review the way you price your products or services. The most important (and obvious) thing to remember is that you need to generate enough revenue from your sales to cover costs and take a profit so that you can keep on growing your sales or meet other business goals. .
It’s also a good idea to see where your prices stand in relation to your competitors’ rates. You don’t want to be the most expensive supplier in the industry. However, if your unique selling proposition is based on price alone, this may not do you any favours either. Many customers want value – a combination of affordability and quality – not just the cheapest option out there.
Evaluate your customer list
Take some time out to go over your customer list and ask whether you will benefit from doing business with each of these customers in the new year. If any of these organisations have a poor payment or credit record, it may be the smartest move to end your relationship with them in 2018. Otherwise they could put your business at risk of poor cash flow and even bad debt next year.
Assess your finances
If you have run into cash flow issues during the year and you are considering applying for a bank loan or overdraft, it’s important to understand your options. Traditional bank finance is certainly one route available to small businesses, but it’s not always the easiest route. You will need to be prepared for the bank to scrutinise:
- Your company’s assets, liabilities and credit history
- How long your company has been operational
- Your overall financial health, profitability and positive cash flow
- Your debt service coverage
If any one of these items falls short of the bank’s criteria, you may struggle to get your finance application approved.
Luckily, you have another option
Factoring is an alternative to bank finance that’s used by businesses around the world. If your company has accounts receivable to leverage, you can access working capital quickly and flexibly with this finance solution.
If you’d like to find out more about factoring, speak to Merchant Factors, an independent debtor finance institution in South Africa that specialises in providing businesses with working capital to grow – or better manage their debts.
For fast, flexible invoice financing – contact Merchant Factors today
Finance beyond the Numbers.