Be Money Aware

Seasonal business owners have to think a lot more about their business finances than regular businessmen because of the mode of their working. Their production and sales take place mostly during particular times of the year and the rest of the year has to be carried on through the profits made during the two or three months of heavy sales. It is far more important for them to maintain cash flow during the rest of the year so that their business is not affected at large.

Here are some cash flow tips for seasonal business owners

• Save for a Rainy Day: This is the most important criteria for seasonal business owners and they should only spend after they have saved enough to see them through the rest of the year. Be it for their business or for their own personal expenses, the money acquired in the two or three months of sales should be saved through FDs and monthly instalment schemes so that they get returns on them the year round.
• Diversify your Business: In case you have a seasonal business, try to diversify it as much as possible. If you have a business in woollen garments, needed only during the winters, try to look into options of selling other kinds of garments during the rest of the year. Similarly, if you make a particular kind of sweet which is demand only during certain festivities, try to make some other kind of food items as well which can be bought by customers throughout the year. If you need funds to expand your business this way, then you can opt for a SME finance from major banks and NBFCs like Bajaj Finserv.
• Cut down on Unnecessary Expenses: When the peak seasons are over, it is important to cut down on all unnecessary expenses to keep the expenditures to a minimum. Is it really necessary to keep the second AC working the entire day? Or is it really important to eat out at five-star restaurants every single time? Be it in your personal or professional life, it is important to identify and remove all the extra expenses as much as possible.
• Hire Only for the Peak Season: In case of seasonal businesses, it is a far better option to hire skilled workers only during the peak season, instead of keeping them on a direct payroll round the year. That way you could end up saving up a lot on their salary for the rest of the year. But make sure that you hire the necessary skilled staff before they are already hired by your competitors.
• Get a Line of Credit: Another way of seeing your business through the slow seasons is to opt for a line of credit at low business loan interest rate from your lender. You can utilize the money from your loan account as and when you require and then you can pay interest only on the amount borrowed. The line of credit can be used as a working capital loan when you have to take care of certain basic expenditures for the business, like paying the rent and electricity bills, even when the sales are not high. The loan can be repaid when the peak season hits again and sales go up.

Check your business loan eligibility and apply for an SME or MSME loan today. With high loan value of up to Rs 30 lakhs and with loan approval guaranteed by submitting only two documents, it is one of the best ways to obtain business financing.

Author Bio:

Uday is a passionate blogger. He has expertise in writing finance articles. He has been serving society as a financial adviser. He loves keeping himself up-to-date with the news and happenings around. He is always open to learning and shares his experiences on his Greetings of the Day.