A financial checklist for entrepreneurs

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For many entrepreneurs, fall marks a key transition point that can set the tone for year-end performance. Some businesses may see an influx of traffic during the fall and winter, especially during the holidays. For those who experience a natural slowdown as the temperatures drop, it’s an ideal time to refine strategies and set the stage for future peaks.

Here are some tips to help businesses optimize cash flow, manage inventory, and make data-driven decisions.

 Solidify cash flow.

Business owners should manage and monitor cash flow to finish the year strong. This fall, business owners can do so by:

• Forecasting budget: Peak summer and winter seasons may bring in waves of customers and, substantial revenue, which leaves a potential lull during the fall months for businesses in certain sectors. To mitigate impact, build potential revenue dips, whether due to slower customer activity or seasonal demand shifts, into your budget.
• Negotiating with suppliers:If there are any new suppliers you will be working with in the fall months or agreements up for renewal, plan to negotiate those vendor contracts as appropriate.
• Accelerating receivables when possible: Look for ways to incentivize customers to make early payments by offering a limited time fall discount to customers who pay by a certain date.
• Proactively exploring financing options:Start fall off right by establishing a relationship with a bank or credit union, if you don’t already have one, to avoid a Q4 cash crunch.

Optimize inventory for fall demand.

Examine physical inventories and adjust as needed to streamline for the fall months to help avoid costly overstocks and ensure customer needs are met. Some tips include:

• Analyzing sales data and adjusting: Consult historical sales data to understand proven demand patterns and make more informed decisions about which products to stock up on.
• Implementing just-in-time inventory: Work with suppliers to implement a just-in-time inventory system to receive items when you truly need them to help minimize storage costs and the risk of overstock.
• Considering seasonal promotions: Run promotions to clear out excess seasonal inventory and create space for new fall arrivals.

Think like a CFO. Use data to identify trends in customers’ behavior, forecast revenues, and plan ahead. Business owners can start by looking at the past fall seasons and determining the specific revenue dips and expense spikes. To do this, start by:

• Segmenting your customer base:Understand which customer segments are most active in the fall and tailor your offerings to them. Consider your business reliance on tourists versus how likely locals are to spend, to better inform marketing messaging.
• Developing and tracking key performance indicators (KPIs):Using a variety of metrics, track KPIs like customer acquisition cost, average transaction value, and website traffic, which provide visibility into your current performance and enable you to pinpoint optimization opportunities.

Liz Haralson, Senior Relationship Manager, Business Banking, Bank of America Oklahoma City