Carol Gordon CPA, through her business Blue Ribbon Accounting, provides tax, accounting and consulting services to clients nationwide. Her clients encompass a wide variety of equestrian professionals including lesson and boarding barns, freelance instructors and non-profits and span many equine disciplines. In this informative article, Carol discusses some key points in surviving the slow down that comes with the upcoming holiday season. Many equestrian professionals experience a decline in revenue around the holidays. Clients temporarily have a lot on their plates and don’t have time for their regular lessons or training. So how can you cope with the temporary decrease in available cash?
- Offer promotions or other sales discounts. You might offer a “Holiday present for yourself” – clients get a discount on a lesson package if they pay in advance.
- Raise prices. A price increase at the beginning of the year tends to raise fewer eyebrows than any other time of year. Clients expect that as the price of feed, insurance and labor increases that your services need to keep pace. Be sure to give them ample notice of the price increase and you may want to offer alternatives if the increase puts your services out of bounds for someone. The goal in increasing prices is to put more money in your pocket, not to drive away clients.
- Keep in regular contact with any clients who owe you money, with the goal of speeding up collections. Consider taking credit cards and emailing the monthly invoices to your clients, rather than mailing or hand delivering them. QuickBooks has a service where you can email an invoice to a client and they can pay it by clicking the link on the invoice.
- When possible, encourage clients to pay immediately rather than having to bill them. For some services, consider shortening the billing cycle so you are billing (and receiving cash) on a weekly basis, rather than monthly.
- Borrow prudently to get yourself through a low cash period like the holidays.
- Trim expenses by considering changing vendors or trying to renegotiate pricing with your current vendors.
- Even though it may be more costly in the long run, consider buying hay and shavings in smaller quantities so you don’t have to shell out big bucks while times are temporarily tight.
- Is it possible to barter rather than pay cash for any regular services that you receive? Be aware that bartering has tax and insurance consequences so consult your CPA and insurance agent before proceeding.
- Delay payments to vendors if possible. Discuss the possibility of paying in installments during this period of low cash flow. If you have a good history with a vendor and are explicit that this is only for a limited period, many are willing to work with you to keep your business.
- If possible, limit payments to yourself temporarily. Obviously, you can’t leave your kids without presents. But most friends and relatives are understanding of your situation and more than happy to receive their presents in January, when your cash flow has improved.
- When was the last time you refinanced the mortgage on your business property? If you bought when rates were high and haven’t refinanced since, it might be worth your while to investigate how much money you’d save by refinancing.
There are still several months until the holiday season (no matter when you see holiday decorations arriving on the shelves of department stores!). Use this time to plan ahead. Consider your client base and decide what might work in your particular situation. Don’t wait until your calendar and checkbook are temporarily empty to take action. That way both you and your clients can have a Happy Holiday season.