A recent survey of Australian businesses by Prospa revealed some interesting facts about the impact of the holiday season on business owners:
- 37% of business owners feel stressed because of the financial pressure EOY puts on their business
- Over 42% have not had a holiday in the past 12 months because they are worried about the effect on cash flow if they did.
Then they asked if funding was a factor...
- 57% of respondents said funding would help their business at the end of the year but only 17% of those surveyed will proactively do anything about it...
It got me thinking, why is that?
- Why is the end of the year such a stressful time for businesses?
- And why do business owners feel there is a solution but are reluctant to act on it?
Now the first question is pretty straight forward. In many businesses, cash flow fluctuate during the year. Seasonal buyer behaviours are common. Cash flow forecasting and -as an example- an overdraft can fix that. If those tools are not in place in your business, talk to a good finance broker and get that fixed.
The second question is harder to understand. Is it that:
- Finance is not understood well enough?
- Or does it feel too much like using a credit card to fix a problem?
- Or is it access to the right finance?
You see, finance should be a normal part of your toolkit. Cash flow fluctuations can be tough when you have regular expenses (rent, wages, ...) and finance helps overcome those challenges. Don't use it frivolously and you will find it an invaluable help. It is when it is used without a clear plan or purpose that it gets people into trouble. Same as a credit card.