Salon owners often forced to borrow money to cover Christmas costs
While the festive period offers an almost guaranteed boost in income from sales, nearly half of owners of small businesses like salons have to borrow money to cover essential Christmas outgoings.
Extra costs associated with this time of year for businesses include taking on temporary staff, ordering higher volumes of stock and the hit from reduced working days in December and January.
Research from IGF Invoice Finance has found that 44% of SMEs are affected by these strains on cash flow and are forced to borrow money to avoid losing out. The company advised business to seek financial guidance in preparation.
Tracy Ewen, managing director at IGF, said: “Outgoings such as wages are essential to any business and a cost that must be met. In the winter season we see many businesses experience an increase in these costs and a reduction in the efficiency of managing their income.
“This year, the bank holidays around Christmas further reduce our working days, so we are imploring SMEs to avoid the difficulties of the season. By seeking advice in to the options available, short-term and unsustainable forms of borrowing can be avoided in place of practical and reliable solutions; enabling everyone to enjoy the festivities.”