The holidays are always a festive season of growth for eCommerce small business owners. However, holiday opportunities also come with several challenges. One of the most important things to keep track of during the end-of-year sales push is your cash flow statement.
Costs often rise around the holidays, sometimes in unexpected ways. While your critical team members take their hard-earned vacation time, workflow gets less efficient – and more expensive. Demand spikes and shipping spikes drive raw material costs higher. And most importantly, competition is fierce as businesses compete for the Black Friday spotlight.
A healthy cash flow is a critical component of a successful business, especially during holiday growth. Read on for some helpful tips for managing your cash flow this holiday season.
Polish Up Your Bookkeeping
The holiday season is always busy, so it can be tempting to let your bookkeeping slide while you handle other tasks. However, if you don’t carefully track how cash flows in and out of your business, you can miss opportunities and create avoidable problems. Sharpen your bookkeeping by investing in powerful tools and quality talent.
Subscribe to our newsletter
Analyze Your Shrink
When calculating expenses, remember to factor in the cost of wasted materials and unsold products. Don’t sit on inventory, but instead, keep it moving as much as possible. Stagnant inventory takes up valuable storage space for high-velocity SKUs, increases the potential for loss or damage, and hampers productivity.
Likewise, wasteful packaging, handling, and shipping practices increase the cost of each transaction. If you want to maximize profits, run shrink analysis several times per year.
Leave Margin for Error
Don’t get too comfortable with your cash flow statement because there’s always a possibility you’ve missed something. A minor miscalculation on taxes or a missed payment due date can lead to huge penalties at punishing interest rates. A successful small business must carefully balance income against debt, any available line of credit, and an emergency fund of liquid cash.
Automate Whatever You Can
Paying on time – and getting paid on time – is one of the most important, yet often neglected, parts of cash flow. Late payments to your suppliers or creditors can snowball into major headaches if you aren’t vigilant. Likewise, chasing customers down for payment after you’ve already rendered services or delivered goods takes time and energy away from what’s important, which is driving more sales. Avoid headaches and always pay your bills on time with payment automation for small businesses.
Invest In High-Velocity Opportunities
The Pareto Principle says that 80% of outputs come from 20% of inputs. Your eCommerce business likely experiences a similar spread of input and output. Good assortments aren’t static but shift to match changing consumer demands.
Many small business owners over-invest in small opportunities and under-invest in big opportunities. While experimentation and innovation are critical to growth, a positive cash flow relies on dependable sales from your highest velocity inventory.
Incentivize More Sales With Promotions, Bundles, and Add-Ons
The festive season is the perfect time of the year to run holiday promotions, clever bundles, and enticing add-ons. Black Friday and Cyber Monday sales have expanded to encompass the entire month of November. Pair themed items together at a discount to increase your average order value or pair low-velocity products with high-velocity to move stagnant inventory.
Beef Up Your Marketing Efforts
Pull out all the stops on your marketing efforts by posting daily to social media to stay at the top of your customers’ minds. Send irresistible deals straight to your customers’ inboxes, and consider giving direct mail a try. Fire up the content engine, publishing blog posts, and videos to attract new leads. Get creative and go bold with your marketing to improve your cash flow.
Accelerate Your Business Funding
Once you’ve made your holiday plan, it’s time to execute, but that requires upfront cash and fast access to funding from your eCommerce sales. Now, you can get both when you choose funding options from Payability.
Instant Access from Payability offers accelerated payouts for eCommerce businesses. Stop waiting for the money from your sales – get your money faster so that your company can keep growing.
- Easy Approval: No credit check needed; just apply with your marketplace account and get same-day funding for the amount of cash you need to bolster your bottom line.
- Daily Payments: Stop waiting around for your funds to clear from your eCommerce sales. Get easy daily payouts, including on weekends and holidays, and always have cash when you need it.
- Free & Fast Transfers: Get your money as soon as you need it with Instant Transfer, Same Day ACH, or wire.
- Earn Free Money: Get up to 2% cashback on every purchase you make with the Payability Seller Card.
Small business loans may not be right for your eCommerce brand. Instant Advance from Payability offers capital for scaling your small eCommerce business. Get next-day access to as much as $250k to help you fund your growth.
- Skip the Credit Check: Apply online with your seller account
- Fast Approval: Get approved quickly and receive your funds in as little as one business day.
- Seamless Transfers: Get your money quickly and easily with Instant Transfer, Same Day ACH, or wire
- Earn Cash Back: Get as much as 2% cashback on every purchase with the Payability Seller credit card.
About the author
Jack Howard is the Partnerships Manager at Payability. He has over five years of Business Development, and Partnerships experience at hyper-growth start-ups in New York City. Before joining the Payability team, Jack worked in Business Development at the real estate company SquareFoot where he was instrumental in forming the Outbound team. He holds a degree in Economics and Sport Management from Southern Methodist University.
