To avoid the December drop-off hangover, have the cure in advance

As consumer-facing businesses invariably up their production in Q4, companies that offer discretionary services can find their workload tailing off if clients decide that the service they’re providing can become lost in the general Christmas clamour.

IT, PR, and marketing businesses can typically be affected by this seasonal disorder and it can feel frustrating after having provided a client with a good service over the previous 12 months, to effectively be put “on hold” just as the end of the tax year appears on the horizon. And whilst putting an account on hold may be a convenient way for the client to end the year, it can be an anxious time for small business owners.

So is there anything an SME owner can do to cushion any potential blow, encourage clients to keep the revenue ticking over in advance of this possible wintery downturn or generally to protect your firm from the dreaded December drop-off? If not, or even additionally, can the time be used wisely, effectively and efficiently to make use of the downtime?

The first piece of advice, as is often the case, is to be prepared. If yours is the type of business that may be vulnerable to an end-of-year slump, whether in clients, revenue or both, it makes sense to factor it into your overall financial status and make allowances for it as early as possible, ensuring that you have the resources to cover the period.

Imagining a worst-case scenario may seem alarmist but if it’s possible to forecast for such a situation, you can ensure that you’re prepared for it. Having a financial buffer takes the pressure off and can allow you to push through the difficult period and into January, by which time, you should be up and running again. And if you don’t need it, your financial position will be that much more healthy come the New Year.

The second tip, again involving preparation, is to ensure that your contracts are watertight when it comes to activity over the Christmas period. While the time of year may lead to an inevitable slow-down through no fault of your own, your contract should be clear and precise as to what can be expected of both parties, highlighting to your clients that they cannot suddenly put everything on hold, or have the right to do so.

Being prepared for a possible downturn can help but equally, so can taking steps to prevent or minimise the impact. Our third tip therefore, is to be proactive. With Black Friday and Boxing Day sales all the rage, you could join in with the spirit of the season and offer a deal or discount. This will have a positive effect on two fronts; giving your client the impression they’re getting a Christmas bonus while in reality, keeping your cash flow ticking over right to the end of the year.

Finally, if the slowdown really does lead to thumb twiddling then use the period to your advantage. There’s no better time to catch up on the backlog of admin that will have inevitably piled up over a busy year. Or you could use this quiet time to plan strategies, set targets for the year ahead and begin the search for new clients, giving your business the best possible start to the coming year.

And of course, if you’re satisfied that all bases have been covered, then there’s always the dreaded self-assessment tax deadline. Any additional cash you’ve managed to put back into the business in advance of this period will certainly make the start to the New Year a happy one.