For entrepreneurs in the Southern Hemisphere, the December period coincides with summer holidays. The festive season is inevitably the time of year when corporates shut down, most people take leave and businesses focused on entertainment, tourism or retail have their busiest time of year.
In the Northern Hemisphere, the festive season is of course incredibly important for retail businesses. But due to the cold weather, it doesn’t quite have the “absolute shutdown” feel of the Southern Hemisphere. The midsummer holidays are in June / July, so the leave calendar tends to work a bit differently on that side of the world.
Either way, the principles are the same in terms of preparation for a holiday. In a previous article, we explored the concept of a holiday paying for itself in the valuation of your business. As cheeky as it sounds, building a business that you can walk away from for a couple of weeks means that you’re doing the right things to create independence from you as the owner.
This is a major driver of value. It’s even better if you can demonstrate to a potential buyer that you’ve stepped away from the business before without it breaking. Talk is cheap.
If you really are finding it impossible to take a holiday at any point in the year, then you need to ask yourself some tough questions about your business model and whether you’ll ever transition from working in the business to working on the business.
And of course, the real risk of burnout as an entrepreneur should never be ignored. It’s a stressful life, which means you genuinely need to be kind to yourself and try give yourself downtime to the greatest extent possible. Tell your family to send the thank-you letters to bizval as they finally get your full attention for a week.
Holidays aside, what else can you do for your business at this time of year?
Get on top of your cash flow
It’s very easy to get caught out at this time of year. Employees expect festive season bonuses (the good ol’ 13th cheque) and many businesses experience a slower revenue month in December than in the rest of the year, so the combined cash flow impact is significant. To add to the pressure, it’s quite likely that customers will pay you later than usual, as they either go on holiday or simply switch off and refuse to acknowledge their adult responsibilities until the second week of January.
Assuming you make it past the 100th of Janu-worry (yes – it feels that long), you’ll probably be facing tax payments in February.
Long story short, this is a good time of year to do a three-month cash flow forecast and make sure you’re going to be OK. If there’s a hole that needs to be plugged, the time to figure that out isn’t on the beach on 27th December while the kids are trying to play ball with you.
Set some goals
In theory, there’s no reason why the calendar year has such a psychological impact on all of us. After all, it’s just another day, week, month and year. The planet does what it does and we wake up the next day like we always do. Yet, there’s an undeniable mental impact of moving into another year.
The past few years have been exceptionally difficult. We went from a shocking pandemic into a difficult geopolitical climate with really disturbing newsflow. It’s easy to assume that planning is pointless in this environment, as there’s really no way of knowing what could happen in 2024.
The point of goal setting isn’t to be right. We don’t have a crystal ball available to us and neither do you. Instead, the idea is simply to give yourself some direction and design strategies to get there.
Will you launch a new product? Or target a new customer vertical? Are you starting something new, or perhaps finally starting the process of selling what you’ve built?
There’s much to consider. This is a good time of year to have those thoughts as you reflect on 2023 and plan for 2024.
Be creative
Unless you run a seasonal business and December is your crazy time of year, this is a great period for creativity. You might not be able to paint or sing, but you must have an element of creativity if you spotted a gap in the market and filled it. Every entrepreneur has a creative streak.
It’s difficult to do your best work when you’re constantly putting out fires and getting 100 emails by lunchtime. As the year winds down, so too should your inbox. If you’ve managed to pace yourself, then you should have some energy left in the tank to be creative and come up with left-field ideas for the business.
Those ideas might just be your next product.
And if you are so exhausted that you feel there’s nothing left in you to drive creativity, then refer to the start of this article and the importance of taking a holiday. We know better than anyone how tough it is. Some of us also know better than anyone what the impact of ignoring your health and family can be.
Whatever you do, be kind to yourself as the year draws to a close. You’re surviving and perhaps even thriving in an economic climate that is anything but straightforward.
To understand the value of your business and what the impact of your strategic planning might be on the valuation, reach out to us. In addition to our standard valuation offerings, we are happy to discuss bespoke input into your forecasts and strategic plans to assist with your business roadmap.
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