How are you enjoying these short, working weeks? I’m sure most of us could get used to a 4-day working week!
However, as much as we all enjoy a little less time at work, business owners should be a little nervous about three short weeks falling in one month. Followed by another short week in May! If you are in retail and your doors aren’t open, you can’t generate income. If you keep your doors open but your wages bill is significantly higher, what impact does that have on your profitability?
Have you made an informed decision on what is best for you and your business?
If your business normally trades Monday to Friday, having three public holidays in one month means that you have lost 15% of your working month. If this equates to 15% of your revenue how does that impact on your bottom line? What about any additional annual leave taken this month by your income-earning team members?
Have you planned for this opportunity cost?
How will you manage your cashflow if revenue is lower than usual? If you invoice clients, you may not feel the impact of this in April because you are still collecting cash for work done in March. However in May you may feel the pinch when your debtor collections are lower than usual. Have you planned for this? Do you have the funds available or access to short-term funding if absolutely necessary?
As business advisors we encourage our clients to look ahead and prepare financial projections in advance to identify any shortfalls. Then we assist them to have strategies in place to soften the blow of difficult periods in business. If you need support from your bank during these times, they are more likely to assist you if you have planned in advance for a potential shortfall rather than having to make that desperate phone call to extend an overdraft to pay wages.