Tips on how small businesses can plan for seasonal sales activity

Seasonal sales volume is normal with any type or size of business. As a small business owner, financial planning is the best way to ensure your cash flow can keep your operations running smoothly during non-cyclical fluctuations. Here are a few things to consider to help keep your small business cash flow plentiful.

  • Pay particular attention to inventory and staffing levels. Maintaining adequate inventory to meet sales volume can be a challenge; however, if you look at past sales performance, you will begin to see cyclical patterns which can help you plan more effectively.
  • Look at ways you can cut costs to keep your small business cash flow steady during dips in sales activity. For example, would it practical to lease instead of purchasing a new piece of equipment? A lease offers lower payments and better tax advantages. Also, would it make sense to purchase used vs. new equipment? Again, savings on payments and taxes come into play.
  • Pay attention to your profit and loss statement to see where you stand with your small business cash flow. This will help you determine if a major purchase can be made in the current tax year or not. Again, you will want to consult with a tax advisor for guidance.
  • Contact your tax advisor as early as possible before your fiscal year comes to a close. He/she can provide guidance on deductions for your small business financial planning for the current tax year, or assist with larger tax planning over a longer term.

There are also alternative financing options available to aSmall Business Financial Planningssist business owners with their small business financial planning, such as a line of credit. This form of credit is a great way to cover operational expenses to offset ebbs and flows in sales activity. It can also be used to pay employees until payment is received for goods and/or services sold, completed projects, etc. Our commercial loan officers at Franklin Savings Bank recommend that small business owners have a sound financial plan in place along with a balance sheet, income statement and cash flow analysis when they are ready to set up an appointment to discuss a line of credit. Remember, planning early is also very important especially if you want to apply for a line of credit before your fiscal year comes to a close!

Small business financial planning is essential to helping business owners effectively plan for seasonal sales activity. Cash flow keeps businesses running smoothing and is critical to operating a small business.

Ready to get to work on your small business financial plan? Schedule an appointment to meet with a business banking professional today.

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Written by Dawn Beers

Dawn Beers

Dawn heads up our marketing department where she is responsible for the general oversight and management of the Bank’s marketing and public relations initiatives. This involves managing the planning, organizing and directing of our advertising, public relations, product development, sales promotion and research efforts.

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