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How to avoid the December drop-off

If you’re in the retail trade or other consumer-facing businesses, you will already be full tilt in the run up to Christmas as demand for products and services increase ten-fold. 

However, for B2B businesses, the festive period can be extremely quiet and difficult to manage. Companies who offer discretionary services may also find some of their clients want to take a ‘holiday’ from their services in December.

So what can you do more generally to protect your firm from the dreaded December drop-off And if you can’t do anything, how could you make use of the December downtime

Take care of the small print
Make your position clear about the Christmas period in your contract. Christmas may be slightly slower for a few days but then this doesn’t mean clients should suddenly put everything on hold, or have the right to do so. 

The wheels of industry still turn in December, despite the fact people are enjoying themselves a bit more. So include a clause about December in your contracts, especially if you offer discretionary services. And if you don’t have clients in contracts, and have over-serviced them throughout the year, tell them this if they suddenly ask to take a break.

Plan well ahead
If you’re susceptible to the December drop-off, whether of clients or revenue, factor it into your overall financial position, i.e. prepare for a lean month or two so that you have the funds to cover it. Think about it in the summer, even. 

If you can predict how far trade is likely to fall over the festive season, and imagine a worst case scenario, then you can be ready for it. Essentially, you want to have a financial buffer in place to bridge you through to the New Year by which point everything should be firing again.

Talk to your bank
Cash flow is the main reason for businesses failing and often additional capital could see them through a difficult period and avoid liquidation. 

Although it is not the ideal outcome, talking to your bank about extending your overdraft temporarily can help get you out of a sticky situation. 

Equally, if you have debts then the bank may be able to offer you a short-term solution as long as you can demonstrate you know your numbers and can present a credible case for a return to positive cashflow.

Offer a discount or a deal
Well, it IS the season of goodwill, after all. You want your clients’ money before Christmas, but they want to hang onto it. So think about sweetening the deal with a seasonal discount for early settlement of invoices during December. 

Any small saving you can offer your clients could be seen as a benevolent gesture while also making sure your bank balance remains topped-up right to the end of the year rather than in the red. Good and long-term clients will generally respond to you if you approach them about early payment in December in the right way.

Make the most of the down time
And if you are in a sector where things get a bit quieter then make use of it. Take advantage of the winter slowdown to turn your attention to aspects of your business that may be overlooked during the busier months of the year. 

The second half of December can be a great time for strategy and setting targets for the year ahead, or staff reviews and any other admin that continually gets bumped when everything is hectic. 

In short, if there is a drop-off, make sure you turn it into a positive rather than let it get you down.

John Hoskin is a director of accountants


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