Seasonal business cash flow management: how to use cash flow management to survive the ebb and flow of a seasonal business.

If you run this type of business, you know about the difficulties of maintaining an adequate cash flow. In fact, you’re more susceptible to feeling a cash flow strain than many businesses.

But, you can do plenty about it – besides worry. The U.S. Small Business Administration (SBA) offers some wonderful free business advice about this critical business issue.

It starts with making accurate cash flow projections.

The SBA says that these projections are a must for seasonal companies, and we wholeheartedly agree. That’s because accurate projections help you better anticipate your high-cash cycles and low-cash cycles – and prepare for them by conserving cash for the slow periods.

Try to cover the entire year when creating cash flow projections. Rely on your records to account for factors such as your:

  • Busiest and slowest months
  • Rent
  • Utilities
  • Taxes
  • Salaries

In other words, use the past to predict the future. Although none of us has a crystal ball, these types of cash flow projections can be a tremendous asset to your company.

Other practical cash flow management tips for your seasonal business:

The article offers plenty of other tips, most of which you’ve read about often at MP Star Financial: offering early pay incentives; asking suppliers for flexible payment terms; and infusing your business with a steady flow of cash (we recommend through invoice factoring!).

The article also encourages business owners to:

  • supplement their income in the off season with new revenue streams
  • strategize during down times to review their most recent cash flow projections:
    • to see how to improve them next year
    • to strategize about how to capitalize on business strengths in the future

For more free business advice, check out our FREE e-book “Grow Your Business Through Invoice Factoring.” It’s an informative look at how to use invoice factoring to help with cash flow issues, including if you own a seasonal business.

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