Top Tips To Avoid The Dreaded December Drop-Off

December Drop-Off

While retailers, online and off, will be at full tilt in the run-up to Christmas, December can be a quiet and tricky one for many firms. For many consumer-facing businesses, December is the biggest month of the year. Demand for their products and services soars and they’re rushed off their feet.

But for other firms, often B2B businesses, December can be an extremely difficult month to negotiate. There can even be a drop-off in their workload, whether permanent or temporary. This is no truer than within the IT sector.

For example, if clients are going to bale, they often do it when it’s neat, namely at the end of the year. With this in mind, for many small business owners, the festive period can be a time of collectively holding their breath. Companies who offer discretionary services may also find some of their clients want to take a ‘holiday’ from their services in December.

Anyone who has been there will know exactly how annoying this is. You over-service them throughout the year and then, wallop, they want to put things on hold. So how do you keep your revenue rolling in when most of your clients are more interested in raising merry hell than raising cheques?

And what can you do more generally to protect your firm from the dreaded December drop-off? And if you can’t do anything, how could make use of the downtime?

Here are a few suggestions:

Take Care Of The Small Print

Make your position clear about the Christmas period in your contract. Christmas may be slightly slower for a few days but then this doesn’t mean clients should suddenly put everything on hold, or have the right to do so.

The wheels of industry still turn in December, despite the fact people are enjoying themselves a bit more. So include a clause about December in your contracts, especially if you offer discretionary services.

And if you don’t have clients in contracts, and have over-serviced them throughout the year, tell them this if they suddenly ask to take a break. Don’t be afraid to say you are unhappy with their proposal after all the work you have done over the past 11 months.

Offer A Discount Or Deal

Well, it is the season of goodwill. You want your clients’ money before Christmas – they want to hang onto it. So think about sweetening the deal with a seasonal discount for early settlement of invoices during December.

Any small saving you can offer your clients could be seen as a benevolent gesture while also making sure your bank balance remains topped-up right to the end of the year — rather than in the red. Good and long-term clients will generally respond to you if you approach them about early payment in December in the right way.

Plan Well Ahead

If you’re susceptible to the December drop-off, whether of clients or revenue, factor it into your overall financial position, i.e. prepare for a lean month or two so that you have the funds to cover it. Think about it in the summer, even.

If you can predict how far trade is likely to fall over the festive season, and imagine a worst case scenario, then you can be ready for it. Essentially, you want to have a financial buffer in place to bridge you through to the New Year by which point everything should be firing again. And if you are in a sector where things get a bit quieter then make use of it. Take advantage of the winter slowdown to turn your attention to aspects of your business that may be overlooked during the busier months of the year.

For example, the second half of December can be a great time for strategy and setting targets for the year ahead, or staff reviews and any other admin that continually gets bumped when everything is hectic. In short, if there is a drop-off, make sure you turn it into a positive rather than let it get you down.

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John Hoskin

John Hoskin initially trained and worked as an accountant and consultant at Deloitte for five years. He then spent the next 13 years working as a Financial Director in businesses across the transport, outsourcing and healthcare sectors and running his own accountancy practice, before founding CleverAccounts. John and his co-founder Chris Mollan, wanted to provide a service that used modern technology to give small businesses and self-employed individuals access to all the accountancy functions they needed but without the crippling costs of a larger firm.