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.
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