7/3/12

Christmas in July Brings Dollars in December

Christmas in July (Part 1)


Almost every business has cycles, some less obvious than others but they are still there.  In some businesses the cycle is related to the closing period from the opening of a transaction until it is closed. Others are tied to weather conditions and time of year.  There are also cycles related to consumer spending practices.  Retail cycles are in many ways easier to predict and plan for than those of service businesses, especially those that offer services that would not be considered a necessity.  

Non-retail business owners seem to find December an especially challenging month in terms of revenue, expenses and, in many cases, focus on the business.  Traditional business plans are often written with each month equal, in most cases because it is simply easier to divide by 12 and hope that the highs and lows equal out over the year.  That is fine on paper but does not pay the bills unless you are really good at building reserves and not spending when you have money.


One way to mitigate the impact is to do mid-year planning.  Creating this as a midyear event where milestones are celebrated, budgets re-examined and strategies realigned, taking into account dependencies that may not have been known before, can change the dollars in December.  Most financial impact to a business is the result of efforts executed well in advance of seeing the dollars; hence July becomes a perfect time to reevaluate.


A few things you may want to look at include:

1.  Annualized or large expenses most likely to occur in low revenue months.
2.  Products and services most impacted by discretionary consumer spending.
3.  Subscription and recurring income renewal periods.
4.  Timing, promotion and introduction of new products and services.
5.  Building your pipeline for future revenue.



There are many more actions and activities businesses using the Christmas in July strategies employ that go well beyond this starter set.  We will be showcasing many of these throughout this series.  Whether you own a business or are a decision maker, July is a great month to celebrate wins, reward people and put energy into the business.


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