Coronavirus: 10 ways beauty businesses can manage cash flow
By Scratch Staff | 31 March 2020 | Expert Advice, Feature
Accounts expert & qualified nail tech, Ria-Jaine Lincoln, shares need-to-know business news & accounting advice for those in the beauty industry…
The closure of businesses and lockdown presents an extremely difficult time for all, so it is more important than ever to understand and manage cash flow over the next few weeks.
Here are some simple tips to help you regain some control:
- Review all the outgoings by checking your last bank statement and highlighting all the direct debits that are in place. Once highlighted, search for the contact numbers for each and set time aside to call each supplier/creditor to negotiate a payment holiday.
- Review all the available cash that you have and plan the priority bills for the next few weeks. Next, go through a cash flow forecast for the next few months (three months and six months).
- Contact landlords to see if you can negotiate a payment holiday for your business location. Also check with your mortgage provider for your home that you will receive the three months payment holiday. It is also worth noting that if you are a tenant landlords are banned from evicting during this difficult time.
- Work closely with your accountant to ensure all the necessary paperwork for loan applications and filing responsibilities are managed efficiently. The government has a package of measures in place to help businesses, including the employee retention scheme. The grants that are available total £10,000 for those that are eligible for small business rates relief as well as the VAT and tax payment deferrals. In addition to this, there is also an extension on filing accounts with Companies House but you must apply for this so do make sure you make the most of all the support that is available to you during this time. To learn more about the business interruption loans that are government backed with no interest for 12 months check out the British Business Bank.
- Go digital with your bookkeeping and accounts to quickly and easily manage cash flow for now and the future. This is a great time to get all your processes in place for when you return back to work as well as being a great help to managing the current crisis that we are in without needing to spend hours creating and updating spreadsheets.
If you have not already done so, set up a business bank account to keep business and personal income and expense separate. This will make it much easier to manage the two different sources of income and expense and easily plan your cash flow for the business going forward.- See how you can refresh your social media and get online more, whether via short videos with useful tips on how customers can look after themselves at home, or if you offer training think about innovating and releasing an online course to increase cash flow.
- Contact all customers and if you only have telephone numbers, text them and ask if they are happy to provide you with an email address so that you can keep them updated on offers and opening dates. Every business should have a GDPR compliant email list.
- Get set up with MailChimp or similar and send out regular email blasts offering VIP Vouchers that customers can buy and redeem when you re-open. A £10 voucher could be worth £15 off any treatment. To manage this you could open half the salon slots to VIP customers each day when you are open. Keep sending these emails and don’t be shy to ask for the sale, and repeat.
- Finally, please stay safe and follow government guidelines.
If you have not already done so, set up a business bank account to keep business and personal income and expense separate. This will make it much easier to manage the two different sources of income and expense and easily plan your cash flow for the business going forward.