Chinese New Year is right around the corner. Also known as the Lunar New Year, this season is often celebrated with family gatherings and dinners. Recent statistics from Statista indicate that the Lunar New Year remains one of the most awaited sales periods for online shoppers in Malaysia, particularly those looking forward to buying fashion items.
Businesses may face the temptation to spend more cash during the days leading up to the celebration. However, store owners must plan and manage their business cash flow meticulously without sacrificing essential expenses for marketing campaigns and sales operations.
Best business tips to manage cash flow
If you want to maintain or elevate your business’s financial health, consider implementing these strategies to monitor your cash flow.
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Review the current state of affairs and forecast immediately
Managing your business cash flow requires a great understanding of seasonal sales patterns for your store. Therefore, you should spend some time analysing the amount of money you’ve used and earnt during the previous Chinese New Year seasons.
This strategy will help you predict the number of orders you may receive and how much you need to allocate for your expenses. However, for best results and to anticipate any post-festivities delay, your forecast should cover business costs for at least the next six months.
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Plan your inventory carefully
Once you’ve finalised most parts of your forecast, you should be able to predict how much you should stock up. Ensure you have a robust real-time system to track and calculate your product inventory to fulfil more orders efficiently.
Making a calculated forecast reduces the frequency of reordering goods to increase stock, as there’s a risk of late deliveries during the Chinese New Year holiday season. Fewer purchases will curb your business expenses, thereby keeping your cash flow at a reasonable level.
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Delay major expenses
Should you feel the urge to dedicate a great deal of your budget to a large purchase, it’s best to postpone such plans for the time being. A wise rule of thumb to manage your business cash flow for the Chinese New Year celebration is to focus on critical spending solely. In other words, procure more things your sales and operational team need to serve customers during the hectic season better.
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Implement backup financing sources
Aside from the risk of not receiving payment by the agreed due date, your sales number may not reach the intended target. These two events can seriously hurt your business cash flow, so you should have backup financing facilities to bolster your income.
For example, you can apply for a small short-term loan if there isn’t enough cash to purchase something critical for your business. You should also send invoices to customers and business partners as early as possible to ensure punctual payment before the Chinese New Year holiday. Remember to follow up on your invoices as regularly as possible.
Luckily, Funding Societies Malaysia offers some transparent financial solutions to bolster your cash reserves during the Lunar New Year season, no matter your business scale. Micro Financing’s affordable interest rate is perfect for small businesses, and Invoice Financing is highly suitable for more prominent companies seeking flexible invoice repayment tenures.
Months before the Chinese New Year holiday arrives, you must prepare some tactics to better control your business cash flow. Nevertheless, sometimes life doesn’t go as planned despite calculations. What steps can you take to anticipate the worst-case scenario?
Therefore, having a reliable finance facility is worthwhile because your company can tap into funding when required. So, look no further than Business Financing from Funding Societies Malaysia to boost your business growth with a quick and collateral-free capital injection.