Back to Work, Back to Business: Is Your Business Ready for the Christmas Rush?

September often feels like a turning point for businesses.

The summer holidays are coming to an end, people are getting back into their usual routines and, before long, attention starts to turn towards the final few months of the year.

For some businesses, this is also the most important trading period of the year.

Retailers, hospitality businesses, online sellers and many service businesses can generate a significant proportion of their annual income between September and Christmas.

But I think September is about more than preparing for Christmas.

It is a good opportunity to step back and ask:

Is the business actually ready for the next six months?

That means looking beyond sales and considering pricing, costs, systems, cash flow and even what you are paying yourself.

Don’t Just Plan for More Sales

It is easy to look ahead to Christmas and think about more customers, more orders and more revenue.

But revenue on its own doesn’t tell you very much.

If your prices haven’t kept pace with your costs, you could be considerably busier without being much more profitable.

I’ve seen businesses work incredibly hard during their busiest period, only to find that the additional turnover hasn’t translated into the profit they expected.

So before the busy period arrives, I’d look at the numbers.

Are your margins healthy?

Are your prices still appropriate?

Have your costs increased?

Do you know how much profit those additional sales will actually generate?

Sometimes the best preparation for a busy period isn’t finding more customers.

It is making sure the customers you already have are profitable.

Review Your Pricing

September can be a sensible time to review your pricing.

That doesn’t necessarily mean putting prices up dramatically. A relatively small increase can have a meaningful effect on profitability, particularly where margins are reasonable and demand is relatively stable.

But there is another side to this.

Customers have budgets too. Not every market will tolerate a price increase, and not every business can simply pass every increase in cost on to customers.

So I wouldn’t change prices simply because September has arrived.

Instead, look at what has changed since you last reviewed them.

Your costs may have increased. Your service may have improved. Your staff costs may be higher. You may be providing more support than you were a year ago.

It is also worth asking whether your pricing model still makes sense.

You might charge by the hour, use fixed prices, create packages or offer different levels of service.

The right approach depends on the business, but your pricing should reflect both the value you provide and the cost of delivering it.

Look at Your Costs

The other side of the equation is costs.

Businesses are often very good at looking for new sales and less consistent about reviewing what they are already spending.

When did you last check what you’re paying for?

Suppliers change their prices. Software subscriptions increase. Insurance renewals come around. Banking and payment fees can alter.

And sometimes you’re still paying for something that made perfect sense a few years ago but no longer provides the same value.

That doesn’t mean every cost should be cut.

A cheaper supplier isn’t necessarily a better supplier, and a cheaper piece of software may take considerably longer to use.

The question I would ask is:

“What am I getting for this money?”

If the answer is clear, the cost may be entirely justified.

If you can’t remember why you’re paying it, perhaps it’s time to review it.

Are Your Systems Ready?

Busy periods have a habit of exposing weaknesses in business systems.

A process that works perfectly well when you have five transactions can become a significant problem when you have fifty.

So it is worth asking whether your business can cope if activity increases over the next few months.

Can customers pay easily?

Are orders being recorded properly?

Are invoices being raised promptly?

Is your bookkeeping keeping up?

I’m not suggesting every business needs complicated software.

Sometimes a simple improvement to an existing process can make a considerable difference.

The aim isn’t technology for its own sake.

It is to make the business easier to run when things get busy.

What About Your Own Pay?

There is one other number that business owners sometimes overlook.

Their own pay.

There can be a tendency to reinvest everything back into the business. Sometimes that’s absolutely the right decision.

Perhaps you’re building cash reserves, investing in staff or preparing for expansion.

But there comes a point where the business needs to work for the owner as well.

If the business has grown, profits have improved and your responsibilities have increased, it is reasonable to ask whether your remuneration still reflects that.

For directors of limited companies, this needs to be considered alongside the wider remuneration position, including salary, dividends and pension contributions.

There isn’t a single answer that works for everyone. The right approach depends on the company’s profits, cash flow, tax position and your personal circumstances.

But it is worth having the conversation.

You Don’t Need to Fix Everything

It is tempting to think of September as the point where you need to get everything sorted before Christmas.

I don’t think that’s particularly helpful.

The more useful question is whether you understand where the business stands and whether you’ve identified anything that could cause problems over the next few months.

Perhaps you need to review your prices.

Perhaps a supplier needs renegotiating.

Perhaps an old system needs replacing.

Perhaps your bookkeeping needs bringing up to date.

Or perhaps the numbers are telling you that things are actually in good shape.

That’s useful information too.

Back to Work, Back to Business

The end of summer can feel like the beginning of another working year.

For some businesses, the final few months can make a significant difference to the year’s overall result.

So before getting completely caught up in Christmas orders, sales targets and year-end plans, I’d take a little time to look at the fundamentals.

Are your prices right?

Are your costs under control?

Are your systems ready?

Are you being paid appropriately?

And do your numbers give you a realistic picture of what the next few months could look like?

You don’t necessarily need to make dramatic changes.

Quite often, a handful of relatively small decisions made early enough can make the busiest part of the year considerably easier to manage.

That’s really what good financial planning is about.

Not predicting exactly what will happen.

Just making sure you’re ready for what might happen.

Further Reading & Resources

If you’re reviewing your business finances ahead of the final few months of the year, you may find these resources useful.

7 Numbers Every Business Owner Should Know

A straightforward guide to the key financial figures that can help you understand what is really happening inside your business.

Small Business Tax Savings: A Practical Guide to Keeping More of Your Money

A practical guide to areas of tax planning that may be worth considering when reviewing your business finances.

Still have questions? Let’s chat. Book a call with me.