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Business cash flow tips for the new year

POSTED: 17th December 2014
IN: Guides
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The start of a new year is an opportunity to improve cash flow

undefinedAny time is a good time for a business to make changes to improve its cash flow, but the start of a new year is a particularly appropriate moment to optimise this aspect of your operations.

If your business benefited from a boost in custom around Christmas, it is worth doing everything you can to maintain this momentum in January.

Here are a few tactics that could help your firm get 2015 off to a perfect start in cash flow terms.

Make the most of the January sales

The pre-Christmas period is a hugely significant time for many businesses, but the first month of the new year is also important as consumers once again hit the shops in high numbers for the January sales.

Rather than falling into the trap of switching off once the dust has settled after the Christmas frenzy, it is crucial to ensure your company is ready to make the most of this potential boost in business.

The main reason consumers go shopping at this time of year is to get bargains, leaving retailers with a question to answer: what sort of discounts will attract custom without wiping out your profit margin?

It is crucial to consider this carefully and to calculate how much you can afford to reduce your prices, based on projected sales increases.

You should also bear in mind that the success of your campaign is not only about attracting customers, but retaining them.

Zabetta Camilleri, co-founder of salesgossip.co.uk, told the Guardian: "If you attract someone to your shop or website with a discount, you want them to be really happy with the product or service and come back. So I would focus on really making sure that the experience they have in your store is great."

Let go of unnecessary staff

If you took on temporary staff to help you with the seasonal rush and no longer require the extra manpower, it's important for the financial health of your enterprise to let them go.

It's not a nice thing to have to do straight after Christmas, but the cost of labour is one of the biggest demands on an organisation's financial resources. Make sure your HR situation is as efficient as possible and you are not spending money on people you don't need.

As long as you made it clear that extra positions were being made available over the Christmas period only, temps with a professional outlook should not be too upset (or surprised) to hear their services are no longer required.

Remember to keep the details of any workers who impressed you during their temporary appointment so you can call on them again in future.

Devise new promotions

Keep your business brand fresh by regularly updating your promotional strategies, even if a particular approach has proven successful in the past. An advert or marketing gambit that seemed innovative when it was first launched will quickly become stale if it is used too often.

One of the best ways to refine your promotional tactics is by asking yourself key questions, such as: 'How do I want my business to be perceived?' and: 'Who are my target audience and what are they looking for?'

According to Helen Lindop, a provider of online marketing and social media training, it is important to promote your enterprise consistently, regardless of how it is performing at any given time.

Speaking to business software provider Sage, she said: "It's tempting to stop marketing during the busy times and then panic and promote like crazy during the quiet times, but this makes your cash flow and your workload harder to manage."

There is no doubt that optimising cash flow is a big challenge for any company, but those that dedicate time and resources to it will see their efforts rewarded in the long run.

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