19 December 2016
The NHBF is reminding salons and barber shops of the importance of keeping on top of their cashflow and credit control in the run-up to Christmas and over the festive period.
With many salons run off their feet in the weeks before Christmas, and then many accounts’ departments shut for the festive fortnight, it is all too easy to find yourself running into financial difficulty at just the wrong moment, the Federation has said.
Its reminder has come as research from specialist lender Amicus Commercial Finance has warned that as many as four out of ten (38%) of small and medium-sized businesses have suffered from cashflow problems in the past two years, and 71% admit cashflow to be one of their biggest risks.
Bivek Sharma Partner at KPMG Small Business Accounting advises, “It is important to run your salon or barbershop with a clear and detailed cash flow forecast. Being aware of every completed transaction and updating your records accordingly will keep you ahead of the game. As we see technology change the way we track and handle our finances, there is also a strong argument for salons and barbershops to invest in this area. There are now technology platforms which can help you keep track of payments and help you find funding to finance the working capital of your business. These are all vital elements for better cash flow management particularly at such a busy time of year.”
NHBF chief executive Hilary Hall said:
“The run-up to Christmas is one of the busiest times of the year for many salons. This research shows that small and micro business are particularly vulnerable to suddenly hitting a cashflow ‘wall’. For labour-intensive businesses such as salons, where you have to pay your staff come what may, this is especially the case. Salon and barbershop owners need to remain vigilant and on top of their cashflow to ensure 2017 does not start off as a very unhappy, cash-strapped new year.”