How to manage your cashflow through the holidays

Your sales may be booming now, but that doesn’t mean you’ve got great cashflow. In fact, with all the big upfront costs involved, many small businesses are under more financial pressure than ever during peak seasons. Here’s how hummpro can help you navigate seasonal demand.

For many small businesses peak season is well and truly underway, which means your cashflow should finally be starting to improve after months of stocking up on products and materials, investing in advertising, and hiring additional staff to meet increased demand during the holiday trading period.

While managing cashflow in a small business is never easy, it’s particularly hard when you have to navigate around seasonal fluctuations in consumer spending and behaviour. Here, we take a look at two common challenges related to seasonal demand and how hummpro can help smooth your cashflow.

Peak season: Big upfront costs

Peak season is generally considered to be the fourth quarter of the calendar year, though it might be different depending on your particular industry and target market. It includes major shopping events, such as Black Friday, Click Frenzy, Christmas and Boxing Day, and it’s when consumers spend more than they normally would on gifts for friends and family, dining out, and travel. Last year, Australian and New Zealand consumers spent nearly $73 billion in the month of December alone.

Whenever your peak season falls, in order to make the most of it you need to stock up on additional inventory, ramp up your advertising, and potentially hire seasonal staff to help out with customer service well before you make your first holiday sale. All of these upfront costs can have a significant impact on your cashflow, increasing the pressure on you and your team to bring in as much revenue as possible by the end of the year to recover.

One way to reduce this pressure is to use hummpro to cover your big upfront costs, such as Christmas stock orders. You’ll have at least 30 days to repay interest-free, so you can shorten the time between the money leaving your account and holiday sales coming in.

Slow season: Not enough demand

On the opposite end of the spectrum is the slow season. Depending on your business, this is often the school holiday period in June when many people are away travelling, and those who are home may prefer to stay indoors and out of the cold weather (at least in some parts of Australia and New Zealand).

The problem during this period isn’t big upfront costs, but rather not enough sales. Without events like Black Friday and Christmas giving people a reason to spend, they are less likely to make discretionary purchases. And if you’re not able to reduce costs or increase sales, it can lead to a cashflow crunch.

However, a BNPL app like hummpro can help. You can use it to pay your rent, monthly utilities bills, and other recurring financial obligations to help manage your cashflow, so you have some breathing room if sales are slower than expected.

With all your transactions each month bundled into a single repayment, it’s easy to stay on top of your finances, and if something comes up and you don’t have the funds to make a full repayment, there are multiple deferment options available.

Find out more about how hummpro can help you smooth out the seasonal fluctuations in your business.

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