How Seasonal Strains Can Impact Small Business Capital

There are so many things a merchant needs to do to get ready for the holidays. With Thanksgiving right around the corner and the holiday shopping season about to explode, you’ve probably already made sure that you have everything you need. Now that you’re all stocked up, there’s only one thing missing – cash. Small business capital can really take a hit when preparing for the holidays.

Seasonal Strains

There are many different causes for decreased or depleted small business capital during the holiday season. As a merchant, you are always trying to make sure you have enough inventory to keep up with customer demand. That demand skyrockets during the holiday season and you definitely don’t want to run out of anything.

The increased traffic of holiday shopping requires an increase in staff as well. It doesn’t matter if your business is a brick and mortar store or an online shop, more purchases mean more staff. Hiring and training holiday help is a much bigger expense than just bringing on one or two new employees.

All of these holiday purchases will need some sort of packaging – bags, boxes, shipping peanuts and bubble wrap and lots of it. Having the proper packaging is important any time of the year but the height of the holiday shopping season is not the time to run short.

Your business can feel the holiday crunch even if you’re not selling the hottest new toy or latest cutting edge technology. If your business is supplying all the packaging materials, you’ll be just as busy. The holiday impact to small business capital is felt just as strongly by those behind the scenes.

Small Business Capital

Avoid a Small Business Capital Shortfall

Many merchants budget and plan for these holiday expenses, but sometimes you can misjudge just how much capital you’re going to need ahead of time. There are some steps merchants can take to help avoid a small business capital shortfall during the holiday season.

Looking back at how much business was done in previous years as well as what worked and what didn’t can provide merchants with a lot of insight. This can be valuable when looking ahead to the current holiday season. You may even want to consider utilizing Business Intelligence (BI) software. It will eliminate the guesswork when it comes to analyzing the buying behaviors of your customers and historical sales trends.

Throughout the year, you’ve build up a relationship with your suppliers. Now is the time to take advantage of that and approach them about negotiating better terms such as extended payment periods during the holiday season. This can help regulate cash flow and, to some degree, preserve your small business capital.

Although most holiday staff is temporary, a merchant still needs to be sure they have the right help. From the sales driving force on the frontlines to those managing the inventory, advertising, and accounting, having the correct staff  is crucial. It can be the difference between a great holiday season and a mediocre one.

After the Holiday Season

Even with all the proper planning and preparation for the holiday season, unforeseen circumstances can keep it from being as successful as you forecasted. Sales of a particular item may have been better than expected, resulting in an out of stock situation and lost sales.

Unexpected equipment breakdowns and emergency repairs may have occurred that ate away the small business capital you had in reserve. Or, the sales team you had in place under-performed, failing to reach your holiday goals. Most businesses have more than one busy season and a shortfall during one season can make it difficult to prepare for the next.

How Seasonal Strains Can Impact Small Business Capital

Navigating a Small Business Capital Shortfall

Whether your business needs short term funding to prepare for the holiday season or a little help rebounding once the season is over, there’s a perfect alternative financing solution. CFG Merchant Services offers a variety of funding options that provide small business capital and will help keep your business growing. Apply now and make the most of your holiday season!

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