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What to Do When Cash Takes a Dip

The seasonal nature of events can make your cash inflow and outflow feel like a wild rollercoaster ride. You might be flush with cash one month, and dipping into the red the next month. Ideally, you want to be proactive with your cashflow to prevent any severe dips make it hard to come back. If you find yourself heading into a big cash dip, here are three things you can do to come out on top again financially.

Restructure Your Invoicing Schedule

Many event businesses take two payments from clients: one up front and one a few weeks before the wedding or event. This is typically an operational decision based on workflow. However, this may be limiting your ability to collect cash year-round.

If you have an annual seasonal dip in your cash flow, I encourage you to ask for three payments, instead of two. This way, you can ask for the third payment in your slow month. Northern regions should ask for it in the winter, while Southern states should consider it in the heat of the summer.

By scheduling your second payment to occur during slow times, you’ll ensure that you have money coming in during an otherwise quiet time. WORK your cash flow to YOUR favor.

Create an Incentive to Pay Early

If you’re feeling an unusual cash dip and need to speed things up quickly, you may want to consider offering an incentive for your clients to pay early. You can offer 2% off the contract price for any clients who pay their final balance early. You may lose some money by providing the discount, but having cash upfront means you aren’t relying on credit cards or loans.

Alternatively, you can offer your clients a ‘bonus offering’ for paying ahead of time. Throw in an additional hour of service, added product, or a special add-on if they pay early. For a little extra work, you can have that cash in the bank. And, during a slow time, that can be golden.

Go Network!

If your cash is slow, it’s time to hustle. The fastest way to fill an empty calendar is to let your network know that you’re available. Tell your favorite venues and event planner friends that you have dates open on your schedule. They could have a last-minute client looking for your services, and your email may spark that connection for them.

It would help if you also revved up your networking. Most slow windows are seasonal. However, I find that many event pros get comfy in their sales cycle and forget about networking proactively. Hit some NACE meetings. Circulate with fellow members. Visibility is critical to get better exposure among your peers.

It’s Likely Temporary

The last thing you want to remember is that this is likely temporary. If you’re marketing and selling yourself, and pricing appropriately, your cash dip will likely fix itself within a few weeks. A cash flow plan can help you navigate any cash dips before they become a severe threat to your business’s financial health.

 

Michelle Loretta is a business consultant and financial strategist for wedding and event professionals. As founder of Sage Wedding Pros she blends her past as an accountant for Deloitte, a sales and marketing manager for DDLA, a merchandiser for Coach, and a stationery entrepreneur to strengthen wedding and event businesses worldwide. Michelle wakes up each day excited to create Financial Strategies and Cash Flow Plans for Event Businesses. She has been asked to speak at a number of industry conferences, including NACE Experience, Biz Bash Live, and The Special Event.

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