What Business Owners Should Be Focused On Leading Into Christmas

It is that time of year again, Christmas is fast approaching.  It is a happy time of year for most, however current issues aside (especially considering the impact on your Business this year of COVID-19) December and January can be very disruptive months. What with Christmas close downs and the public holidays for many Businesses it can be mayhem up until Christmas, then quiet after that.

If you have been in Business for a few years, then you know what to expect and how the festive season will affect you. You would factor in your past experiences and this year also consider how COVID has affected your Business. If you have started Business this year, then you will also need to consider how the Christmas break on top of COVID will affect you.

Do you have a Business plan? When you undertake a Business plan, it should always be revisited and reassessed to see how your actual position measures to what you originally budgeted. You can then revise your budget to reflect your actual position to get a better idea of where your business is currently at and re-budget to correct your business and be better informed as to where your business is at present Whilst not  exhaustive issues you might consider include:-

  • Does my Business actual financial position coming to Christmas reflect what I forecasted?
  • Do I have debts to collect before I close for the Christmas public holidays (or longer if I’m closing for a period over the festive season)? Will debtors due around Christmas and shortly thereafter be affected by yours or their close down?
  • What additional payments might I have to make to my Employees if I am to close for a period during this Christmas break?
  • Do I have payments to make to Creditors before the break, do I need to pay additional amounts to suppliers to ensure I can trade into the New Year?
  • Do I need to review sales and sales strategies leading up to Christmas to ensure that I generate enough cash flow to meet cost moving into what might be a quiet New Year?
  • The impact of Job Keeper eligibility and extensions in early 2021.

These simple questions will highlight issues you might need to address, again not exhaustive but these might include:

  • Discussions with suppliers/creditors regarding deferral of payments, acquisition of more stock than usual etc. If you need to defer payments to creditors discuss your situation with them. The information you extract from your revised budget might be useful in convincing the creditor/supplier to provide an extension if you can show then how and when they will get paid. This shows them that you are on top of your finances and can demonstrate to them when they can be paid. If in fact you are unable to show them these debts can be met and that you cannot move back into normal trade once your Business is past the Christmas break then you may need to speak to your Professional Advisors regarding a solution.
  • Discuss with staff (if not a mandatory shutdown by you) as to what leave they plan to take over the Christmas period. This will allow you to both budget this leave as an expense of the Business and consider what plans you might need to make to cover any loss of production (if any) that will impact the Business ability to continue to fill orders on time (if appropriate).
  • Consider the need for a possible stock sale or discount to clients to boost your cash flow leading up to break or afterwards if sales are via credit sales collectable after the break. Any discount that you might offer should be weighed up against the loss of margin that you may suffer as a result offering these discounts.
  • All in all, it is good planning that will see your Business through the Christmas/New Year period.
  • If the numbers don’t work approach your professional advisors to discuss options, you might take to assist you through this period.

If you have any questions or concerns, please contact Jones Partners to discuss your options. Having all the information and understanding all of your options might change your actions. Call us on 9251 5222.