Login
iscover
Concerned about the summer sales slump? Here are key tips for maintaining cash flow for your real estate business in the post-Christmas period.
The summer holidays can be an unpredictable time for real estate agents. In some markets – like beachside towns and popular holiday-house hotspots – summer can bring about a piping hot property market.
With one network predicting an extended spring rush period, high sales may last until Christmas this year, even in traditional owner-occupier markets.
But what about after Christmas, when the spring rush fizzles out and listings begin to decline? How can real estate principals keep their businesses afloat throughout these quieter months?
According to lending company Moneytech, the summer holidays can be a lean period for some small-to-medium enterprises (SMEs).
The company noted that even the most well-prepared businesses risk a reduction in income, as their consumer base spends more time out of the office and out of their regular routine.
On the other hand, Moneytech noted that businesses who experience a boost in sales over summer can be caught out by amped up trading costs, premium staffing costs and insufficient cash flow to meet peak season demand.
“SMEs forecasting a slower summer are applying for finance facilities to boost their bottom line and bridge a one- to two-month income gap,” shared Reece Ketu, head of small business at Moneytech.
“On the other side, we also have businesses that have an increased demand for their products or services over time and need to be prepared to ensure the availability of necessary resources,” he stated.
According to the lending company, one tip for maintaining cash flow over summer is to incentivise early invoice payments.
“Encourage payment of outstanding invoices by incentivising early payment,” Mr Ketu advised. “If your payment stipulates a net 30-day period, consider offering a modest discount to customers to settle within a shorter time frame.”
Streamlining accounts payable is another crucial step in ensuring that no unpaid bill falls under the radar, according to Mr Ketu.
If certain business functions are draining income – such as IT, human resources, or accounting – Mr Ketu suggested that outsourcing these areas to specialised firms could save money and free up staff. He also recommended reviewing internet, phone and cleaning contracts to cut down operating costs.
Finally, the Moneytech head advised SMEs to implement a rolling cash forecast to better predict cash flow.
“This forecast should include estimated inflows, such as customer payments and outflows, including vendor payments and payroll. Update this data on a weekly basis at the very least,” Mr Ketu advised.
By implementing these strategies, Mr Ketu stated that SMEs can achieve “greater peace of mind” over the summer slump.
Newsletter
