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January can be a tough month to be in business. Consumers often overspend during the December holidays and then tighten their belts as the new year starts. As they have to cope with an extra week or so before January’s salary arrives and seasonal expenses such as sending their children back to school, their discretionary spending is severely limited.

The best way to prepare for a leaner January, is to build up a cash-flow buffer during the previous year. When sales exceed your monthly projections, consciously and purposefully put at least some of that extra income away to create a safety net for January (start preparing now for 2025). If it turns out you don’t need it, you can use that cash-flow windfall to explore new opportunities and set your business up for the new year.

However, if you had not managed to build up a buffer, here are six  tips to help you take the worry out of the first month of the year.

  1. Understand where you are

This might sound obvious, but you can only make an effective plan when you understand exactly what needs to be done. How much is your projected shortfall? By when are certain  expenses and bills due? What amounts can you expect to come in, and on which dates? Which bills can be paid later without attracting penalty fees? Armed with this information, draw up a detailed cash-flow plan for the month ahead and into February, so that you don’t simply postpone dealing with January’s problems.

  1. Be proactive

This tip applies to your debtors and your creditors alike. Follow up on all unpaid invoices and consider encouraging payment by offering a small discount if your invoice is fully paid within a few days. Also find out from your creditors what arrangements would be possible should you not be able to make full payment on the dates you have to. They will be more likely to be sympathetic if you let them know well in advance, instead of just not paying them on the due date.  Alternatively, see if you can negotiate a discount for paying early – yours is not the only business that might be struggling in January.

  1. Put yourself in your customers’ shoes

What will make life easier for your customers in January and how can you help in this regard? If you have stock left over from December, consider offering discounts or bundled deals to get feet through the door. You know that once people are in your store (be it online or bricks and mortar), there is always a chance that they will buy more than what they came in for. You can also gear your displays or your advertising messages to problem solving. For example, give customers ideas for budget-friendly meals, or ways to save on delivery costs.

  1. Get your team onside

Explain the cash-flow position to your staff and get them involved in finding solutions. At the very least, staff must be aware of the need to be prudent with company resources: don’t waste inventory, save water and electricity, and don’t make mistakes that might result in refunds and customer dissatisfaction. Furthermore, your team members are consumers too and might be able to give you great ideas on how you can help your customers to get through January.

It is really important to not only ask for your team’s help and understanding when times are tough. Be sure to acknowledge their good ideas and support and, once the cash-flow crunch is over, to share the good times with them as well. The fastest way to lose your team’s trust and loyalty, is to engage them only when you want them to do more with less.

  1. Market, market, market

But how can I market when I don’t have cash flow? Use the channels you already have in place, such as your email lists and social media platforms. Small things can make a big difference; for example, is your business hours correct on Google? Is your website up to date and accurate in terms of available stock, prices and the January specials you are running? Take a close look at your marketing metrics and focus on the channels that work best for you. Customers can only buy from you when they know what you have on offer.

  1. Use the time to prepare

A quiet shop is obviously not what you want, but if that is the reality in January, use the time to do housekeeping tasks you don’t otherwise have time for. Spring clean your space, including storerooms and cupboard you don’t often use. This could lead to opportunities – maybe you end up with an empty storeroom that someone else can rent from you, or you find office supplies you can use instead of buying new items. Also do the small maintenance jobs, not only to improve the work environment but also to prevent expensive repairs later on.

About the Author: BPL Admin

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