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If you’re like many business owners, you might find yourself putting off certain tasks, actions or decisions until after the Christmas break. Here’s your festive inspiration to take action now.
We asked our business adviser, Peter Frey, for his thoughts on what kind of actions business owners tend to delay at this time of year – and what to do instead.
Don’t delay…
#1: …taking time for yourself
Whether December is generally a busy or quiet time for your business, Peter says it’s important to make sure you achieve a good balance between work and private life.
“There will be always periods of high work volume when running a business and sometimes long hours are necessary. But it’s also important to rest and recalibrate so you have energy to tackle the new year. Remember to offer yourself and your family some time off.”
Read our tips to managing your wellbeing as a business owner.
#2: … sharing your workload
“Don’t be afraid to delegate,” says Peter.
To delegate effectively, you could start by looking at your to-do list and what your team could help with. If they don’t know how to perform a certain task you usually do, this could be the perfect time to help upskill them and free up more of your time.
Take a look at our range of affordable SBDC workshops which could help to teach your team new skills.
#3: … following up on payments
“If the collection of money owed is difficult at this stage, it is vital for you to be on the front foot,” says Peter.
“A good idea is to call your customer before the due date to say hi and check if they have received all your invoices for the period, and enquire about any overdue debts.”
“You can ask them if all is in order for the payment date expected.”
#4: … chasing overdue payments
Peter notes there is never a good time to collect overdue debts, so don’t delay over the festive season. “Remember it’s your money and in most cases, your client either has been paid or, has the money.”
Read about some debt recovery strategies you could put into place.
#5: … addressing your cashflow
Unexpected events can impact everyone. If your business serves other businesses, it’s important their cashflow challenges don’t become your own challenges. As Peter states, “It’s your client’s responsibility to have an appropriate amount of cashflow to run their own business.”
#6: …creating a payment plan for your clients
“Communication is the best course of action. If your client can’t pay the full amount by the due date, seek some part payment and work out a weekly payment plan. In some cases, you might offer a small discount for immediate settlement. This is not ideal but could help with your cashflow if needed.”
You might find these financial planning documents useful.
#7: … meeting your own debt obligations
“If your client’s non-payment will cause difficulty paying your own supplier, you need to communicate this to your supplier and ask to set up a payment plan of your own,” says Peter.
“As long as some funds are received, most suppliers will be grateful for the effort.”
If you’re having trouble making your own debt payments, it could be time to seek options for businesses in financial distress.
#8: … planning cash reserves
“It is worthwhile for your business to have a backup of cash either from a bank overdraft or possible cash reserves from a loan by you” says Peter.
“You should have this facility ready for the ‘unknown’. This could be an A+ client who pays in advance or a bulk product purchase you use a lot of at a great price.”
#9: … setting clear credit terms
If you don’t already have secure credit terms, Peter recommends putting everything in writing in advance. “Make sure you have a credit application signed as a personal guarantee and on larger jobs (especially new customers) have a reasonable deposit before starting work.”
Read more about providing credit to customers.
#10: … reviewing your terms and conditions
Peter recommends you set a “draw down” condition to be paid as you go. “If you do not have written terms and conditions, then start the process now rather than putting it off.”
Here are some tips on how to prepare standard terms and conditions.
#11: … dealing with stress
If you’re feeling stressed about finances or any aspect of running your business, Peter advises it’s a good idea to get help sooner rather than later.
Learn more about managing stress and anxiety as a small business owner.
#12: … planning for success for the new year
As this year draws to a close, take some time to reflect on what went well for your business, what you can do more of in the new year and what needs to change. Rather than thinking about next year when it arrives, taking the time to proactively plan the new year could be key to your success.
Take a look at our business planning tools and templates for inspiration and find out how to kick off the new year with your best foot forward.
More information
Visit the Finance section of our SBDC website for more tools and templates or book your place at one of our financial management workshops.
If you’d like to discuss an issue facing your business, book an appointment with our free business advisory service.
