The ups and downs of the seasonal sales cycle can leave your business feeling stagnant in the slow times.
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Question:
Five ways to maximise the seasonal sales cycle?
Answer:
The ups and downs of the seasonal sales cycle can leave your business feeling stagnant during the slow times. Five smart ways to keep the cash flow on an even keel, and maximise sales activities year-round.
Businesses don’t have to rely solely on peak periods or external trends to drive sales activity.
Slow periods can be balanced by peak demand periods. Additionally, cyclical sales slumps can be buoyed by tailored promotions, providing that stock levels, cash flow management, customer engagement, and staffing are carefully managed.
Using technology to gain actionable insights into sales, finances, inventory and other business processes enables companies to weather slow cycles and maximise busy periods.
Here are five key tips to keep your business on track:
1. Ensure cash flow visibility
The most effective way to plan for the lean times is to have real-time visibility into finances. Tapping into software that provides instant insight into cash flow, businesses can implement a range of financial strategies to balance slow periods with busy ones.
For example, an annual budget combined with real-time cash flow insight can help track and predict how much money is needed each month to pay recurring bills or spend on stock. If your business is service-based, intelligence or data can provide a detailed guidance around anticipated staffing costs for a given period.
Forecasting is essential for setting an annual budget. A good place to start to predict future cash flow requirements is to revisit past years’ financials. Seasonal cycles repeat themselves, so past performance can help predict future pitfalls and potential shortfalls.
Such forecasting and budgeting help to optimise cash flow during the higher revenue months to better cover costs during the lower-revenue months, balancing the highs and lows of business for a steady, year-round journey.
2. Map out product lead times
For product-based businesses, accurate forecasting is a great way to provide a clear idea of how much inventory you’ll need to order, and when, to have adequate stock for busier trading cycles.
Demand forecasting, informed by previous years’ data, is valuable for product lead time management. Additionally, real-time inventory and sales performance data can help businesses forecast more accurately – a particularly valuable capability in the current business climate.
By factoring in accurate lead times, the risk of missing out on customer orders during busy times is minimised, helping to prop up the slow periods.
3. Avoid stagnant capital
With good forecasting and a clear view of product lead times, you’ll also have a better idea of when you need to ease up on your order. This approach will help make sure you don’t have valuable capital tied up in merchandise that won’t sell for months.
Even if the business typically buys its stock with a line of credit or by using another financing option, having real-time insight from an inventory management system will go a long way to help to order the right amount of product at the right time.
This means less money – including borrowed funds – will be tied up in inventory when it isn’t needed, and stock will be maintained at a realistic threshold, with ordering becoming much more precise year-round.
4. Fire up fulfilment and invoicing
Streamlining the order fulfilment and invoicing process can make a marked difference in cash flow, alleviating the impact of slow trading periods.
While accurate forecasting will help ensure customers’ order fulfilment is done in a timely fashion, so can streamlined internal business processes. For example, automated order and fulfilment processes can slash the time it takes to sell and ship a product or provide a service, leading to a shorter order-to-cash cycle and greater customer satisfaction.
When it comes to invoicing, even if a business offers its customers 30-to-60-day payment terms, the money may be needed sooner to keep costs at bay. Incentives, such as a discount on the next purchase, are a great way to encourage customers to pay their invoices earlier than the typical payment terms.
5. Add value to every sale
Simply increasing the value of each sale, will make a notable difference to the revenue during slow periods.
Up-selling and cross-selling are two proven approaches to adding value to a sale. You can use these techniques by upgrading a customer to a higher value product or service, or finding ways to sell different, often complementary, products or services to the same customer.
By using insights obtained from sales and inventory management data, businesses can drill down into the customer buying behaviour for a deeper understanding of what kind of up-sell or cross-sell opportunities will work best for them.
With such value-add tactics, businesses have the chance to gain greater revenue and provide a more sustainable financial buffer to rely upon during slow periods.
Using seasonal sales cycle to your advantage
Drawing on these tips, you can effectively leverage accurate insight for detailed planning. Having clear visibility into your operations will well position you to keep the cash flow on an even keel, and maximise sales activities year-round.
(Source: Koshies Business Builders: BBJason Toshack, VP, and GM at Oracle NetSuite ANZ). August 2022).
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