I’ve been updating my running some live Zoom sessions on pricing and costings this week, and was reminded about the importance of CASHFLOW.
Graph showing turnover v expenses across the year.
This illustration shows how seasonal flower farming is and makes it totally obvious why cashflow is king. In spring and summer the turnover is high, and exceed by quite a way the amount going out in expenses, but by the Autumn, it’s the other way round.
Even the best companies can be caught out by having more money going out of the business than coming in, but as the flower season, slows, and for some, stops completely, there are still costs.
So here’s some of my top tips for ensuring a cashflow deficit doesn’t turn into a cashflow crisis.
1) Send out invoices with payment dates for everything that you’ve sold. This may seem like an obvious one, but the times i’ve had to ask and then remind this year for flower farmers to send me invoices, you’d have thought they were just doing this for fun….. SEND ALL YOUR INVOICES NOW (and this blog post was triggered by someone reminding me to invoice them!)
2) Chase any outstanding invoices. This is something that no-one likes doing, but usually it isn’t because your customers can’t or won’t pay, it’s just that they have forgotten to pay, or maybe you haven’t told them when they have to pay by? Or maybe they didn’t get the invoice.- Tell them, remind them, give them a deadline, remind them again.
So hopefully you’ve now got all the money in the bank that is owed, if cashflow is still an issue and you haven’t still got flowers to sell
3) Check when expenses go out, - can you change them to another time in the year. I started my business in January , so I have insurances and other yearly costs, but i’ve moved all vehicle expenses to the summer.
4) Sell plants / or excess goods, maybe excess Dahlia tubers, or perennials that you are splitting. Facebook groups are excellent for this, turn your clutter into cash.
Large Dahlia Tuber - worth splitting and selling?
5) Hire yourself out as a freelancer / Go back to your old job. If your outgoings are low, then this isn’t needed, but there’s no point getting in debt by spring if you can earn money another way.
6) Slight more risky - but Sell next year’s flowers or workshops in advance.
Any other methods you use? The Flower farming financial low point comes at an expensive time of year, with Christmas and Taxes, and i’ll admit that in the past there was always credit card bills to pay come Spring. Now I’m so much better at working out how much i’ll need to take me through the quiet months.