The holiday season can be an extremely hectic time for many businesses. This time of year can also lead to additional and unforeseen costs. Small business funding can provide a business owner the ability to avoid additional year end expenses that may lead to significant financial complications.
Most loans that are taken out during the holiday season are last minute due to the following reasons:
- Additional staffing expenses
- Payroll and holiday bonus expenses
- End of year expenses
- Reduced income
- Increase in inventory
- Seasonal business trends
- Supplies and equipment
Business owners may also find themselves tight on personal funds during the holiday season, which can make it more difficult to infuse money into their own business.
Instead of having to deal with the stress of last minute applications, business owners should and can plan ahead. By taking the time to calculate the amount of working capital needed in advance, you can avoid unnecessary fees and high cost loans offered at short terms.
How To Determine If I Need A Working Capital Loan?
First, take the time to review all of the expenses incurred during last year’s holiday season.It is also highly suggested to take the time to examine your books from the last few years. Doing this will show financial patterns between the seasons. Identify which months are the slowest for your business regarding income. Remember that even though your income may be reduced during those months, there are still static expenses that will need to be paid. Next, research and incorporate how current business trends my affect this year’s holiday sales.
Review your current equipment. Determine what equipment may need to be upgraded and replaced. This effort will help mitigate any unexpected issues with equipment failures during the holiday season.
Take a close look at your current staffing set up. It is estimated that 20% of annual retail sales are generated during the holiday rush. You do not want to find yourself unprepared for this influx in customers. Not having enough staff on hand can lead to long lines and customers deciding to take their business elsewhere. Planning to hire seasonal staffing is smart. There are always people looking to take on a seasonal job that only last 4-6 weeks. Having the extra capital to hire additional staff can ensure your business can handle this increase in foot traffic.
Review your current inventory. Coming up short on inventory during the holiday rush can put your business in a position to lose out on thousands of dollars. Take the time do a full inventory review and account for what you may need.
Start preparing for the holiday season now by considering a working capital funding loan. Applying for funding doesn’t need to be painful. It’s important to choose a provider that you can trust. A good provider will be transparent about all fees, explain exactly what is expected and required of your business and walk you through the entire funding process. At Merchant Funding Solutions we can offer a complete consultation to help you prepare for any last minute financial situations.
DISCLAIMER
The information and insights in this blog post are provided for educational purposes only and do not constitute financial advice from Merchant Funding Solutions Inc. Please consult your financial advisor before making any business financing decision. For information about Merchant Funding Solutions products and services, please visit the Merchant Funding Solutions FAQ page.
