Your growing business might get a boost in sales during different parts of the year while you experience lean times in others. Fluctuations in sales both create a positive and negative impact on your business. However, you’ll have to manage these fluctuations effectively so that you can maximize resources and stay within your budget while boosting profits. Learning how to leverage these fluctuations so that you gain a competitive advantage.
These cash flow management tips can help you navigate seasonal sales fluctuations.
Create a Plan and Focus on It
You can never plan for everything but making one allows your team to have a guideline to follow when sales upswings occur. Assess historical sales data, doing so enables you to make a projection for the following months. Your forecast allows your team to manage inventory and determine the amount of goods you need to buy without under or oversupplying. Making projections also enables you to identify sales strategies you can use to boost profits and make full use of your resources. Include hiring new employees for seasonal fluctuations in your plan. Doing so allows you to balance your budget effectively.
Effective Inventory Management
You need to manage your inventory so that you always have high demand items in stock and to prevent shortages. Review your historical sales data to determine which products are sold the most during different times of the year. Schedule purchases with enough lead time so that your inventory is at the right level during sales influxes or downturns. Achieve proper inventory management by investing in software and tools that allow your team to monitor items that go in and out of your storage spaces.
Consider Hiring Seasonal Staff
Upswings and downturns in your sales don’t mean you have to hire more employees. Consider hiring seasonal employees to relieve the workload of your current staff. You’ll need the additional manpower to fill the extra hours you need to meet the demand of your customers. You can hire them part-time or pay them on an hourly basis. This approach allows you to cut costs and implement effective cash flow management while boosting revenue.
Start Promoting Early
After assessing your historical sales figures, you’ll have an idea when fluctuations might occur. Get a head start on your campaigns. Share promotional materials through your social media profiles and websites. This generates a buzz around your brand that draws your target audience. This also allows you to prepare your team for the upswing in sales since you made an announcement early.
The Importance of Diversification
Seasonal fluctuations provide you with an increase in revenue and enough time until the next upswing to implement cash flow management best practices that allow you to diversify your business. Develop products or additional features to existing ones to create a need and generate sales outside of sales fluctuations. Direct some of your resources to expand your market reach and target a new audience. Diversify but maintain your strong branding to avoid alienating your consumers.
Successful and efficient sales fluctuation management enables your business to generate profits and maintain a positive cash flow. If you need someone to update your accounting books whenever you encounter seasonal sales fluctuations, we at Robookkeeper can help you. We offer first-rate bookkeeping services for small business owners.
