How to Effectively Manage the Seasonal Business Slowdowns in Dubai?
Most businesses pass through a recurring cycle of a business slowdown, especially in Dubai. We call it the business cycle and it is a natural part of any economy though it may seem strange to newbie entrepreneurs. If you are new to entrepreneurship, you should first understand the business cycle in the UAE and be prepared in advance to successfully tackle the seasonal slowdown challenges. If you outsourced your accounting process to top accounting firms in Dubai, talk to them and make a robust plan to secure your business from being hit by such slowdowns.
Here is a list of some strategies that may effectively shield your business from seasonal blues:
1. Understand the Business Cycle in Dubai
Established businesses are well aware of the Business cycles or the periods of slower business activity in the UAE and most of them have a plan in place for such periods. You should also develop a strategy for the May-July period due to the Ramadan effect as well as the period from October to December. Holidays are the major contributor to the lull experienced during a business cycle in almost all the economies. So, understand how the business cycle works in the UAE and make a plan instead of letting yourself fall prey to the shock of the off-season blues.
2. Make Room for Fixed Expenses
You need to focus on your expenses even when your business is on a pause mode as you cannot ignore your tax obligations, rent, utilities, and salaries for the year-round employees. This creates the need for generating an accurate project cash flow and professional accountants in Dubai will assist you in the process. This is a tried and tested strategy that will help you implement a strategy to cover all your expenses well ahead of the seasonal business slowdown.
3. Track Customers’ Payment Trends
Your previous experiences of customer payment trends would come handy during the off-season. Review the payment history of the clients and you will come to know that the payments slow done during certain periods of the year. With this knowledge, you can track down such customers and move their invoices to the top of the list to pay. The payment period of such invoices should be fixed at a time that is earlier in the cycle so that the payment would be done before the business starts slowing down. You can plan this out efficiently with the assistance of the best accounting firms in Dubai, UAE.
4. Keep Your Operating Costs Down
When your business activity slows down during an off-season, make sure that you are consistent in collecting the receivables and cutting down unnecessary expenses. Find out ways to minimize the operating costs without compromising the quality of your products or services. You can resort to effective strategies like hiring part-time employees, negotiating with vendors for better payment terms, hiring contract staff instead of full-time employees, etc. You can also study the methods used by your competitors to navigate the days of business inactivity or seek the advice of the experienced accountants in Dubai, UAE.
5. Generate Alternative Revenue Streams
While running a business in Dubai you need to be conscious about the long holidays and there should always be a contingent plan that will generate revenues. You need to be creative at developing an effective revenue-generating plan that would serve as an effective source of income during the slowdown. For example, businesses can think about renting out their equipment or inventory temporarily during the business lull.
6. Prepare for Financial Transaction Delays
You need to keep an eye on the financial transactions when a long holiday falls. Bank-related transactions including deposits will be affected during long holidays. You need to plan your financial transactions accordingly to save you from long transaction delays. If you have outsourced your accounting requirements to the best accounting firms in Dubai, they will advise you on having a robust plan to counter the delays.
7. Identify Anchor Clients & Stay in Touch with Them
An offseason is the most crucial time of the year that requires you to keep in touch with your existing customers. You need to try all possible avenues to ensure that your company is still receiving attention from your current customers. Identify your anchor customers well before the seasonal cycle begins and keep them on the loop. Your anchor customers are those clients who provide you with a constant stream of revenue and they are the ones who carry you during a business slow down. Keep in touch with such clients through social media, emails, or by sending holiday cards as they are the ones who help you cover your bills.
8. Have Extra Cash on Hand for Your Slow Season
So, you have made your plans for a slow season with utmost care but that doesn’t ensure everything will go smooth. You still run the risks of facing financial gaps even after minimizing the expenses and diversifying the revenue streams. You need to set aside additional cash during your busy season, which will allow you to maintain your company’s operations smoothly during your slow season. Creating a line of credit before the slow season is also a good method to ensure you have enough cash when you need it the most. Outsourcing your accounting requirements to the best accounting firms in Dubai is the best way to implement all the strategies mentioned in this article that will help you successfully navigate the seasonal pangs.
Seek Advice From Accounting Firms in Dubai
Running a business in Dubai when during periods of business lull can be challenging and it becomes tougher if you are operating a seasonal business. Cash flow becomes a serious concern when there is a seasonal pause in your business. The lull in the business will leave you wondering how you will survive or cover the bills and other costs. Thankfully, there are experienced accounting firms in Dubai such as Jitendra Chartered Accountants (JCA) that assist you in resolving the seasonal challenges faced by your business. JCA provides you with the expert guidance and services of the best accountants in Dubai who will guide you in implementing the best accounting & bookkeeping practices in your firm.