It’s finally the first day of the season and you’re ready to open up shop at the local farmer’s market. However, this year, you decided to do a few things differently. Instead of operating a cash-only stall, you settled on a point of sale system with a card reader to make shopping easier for your buyers. Since this is your first time bringing tech behind the counter, you’re not quite sure how to manage your cash flow. Does your POS calculate all of your purchases or do you have to tally up cash manually? How do you know how much you’ve made over a day, week, or month?
It can definitely get a little confusing, regardless of your industry and even if you’re not new to POS technology for your business.
For many seasonal business entrepreneurs, cash flow struggles are often far too real to ignore. Developing and following a seasonal business cash flow management plan often gets overlooked. Why wouldn’t it? Seasonal businesses have enough moving parts already, right? Unique as the nature of your business is, managing cash flow does not have to be as complex as you might imagine.
Maximizing Sales Through Increased Product Availability
One great way to get the most out of your seasonal business cash flow management is to ensure that your product lines are readily available or easy to locate. By increasing the availability of your products, especially your most popular sellers, you can increase and maintain cash flows even when your official season ends. While related to streamlining inventory management, you will do yourself a disservice if you stop there. Rather, it is here where you can utilize and stretch your seasonal inventory to seek advantageous markets throughout the year.
A potential client approached looking for a way to use a technical solution to resolve their offseason cash flow issues. During the summer farmers market season, the money flowed in as fresh egg, meat, and produce seekers flocked to their stand. The issues they were encountering were twofold; one was that some of their items would spoil before the sale (inventory leakage) and the other was that they would have too much of one item but not enough of another. This led to missed sales and rotting inventories, both of which hampered their cash flows.
Upon joint analysis of their sales and inventory data, it was discovered that many of their items could be salvageable by expanding their canning and specialty recipe business functions. Additionally, we found that most of their preserves and meats could be ordered and shipped throughout the year, which would double their selling season from four months to eight months.
We worked with them to implement a modern, streamlined POS solution that provided real-time inventory and sales data, giving them increased insights into what products should be preserved or used in recipes and which were best left in their natural form for sales. This increase of the sales season solved some of their initial cash flow management issues but still left holes in the areas of sales forecasting and data centralization.
Deepening Analysis and Securing Data Through the Cloud
As most seasonal businesses are prone to do, your data is most likely stored in a collection of paper ledgers, spiral notebooks, or an Excel or Google spreadsheet. This serves a purpose to a point but quickly becomes clunky and hard to use when trying to take a deeper look at your revenue streams, sales reporting, and analytics. Adding to the risk of manual or legacy POS data analysis, you are a handful of misplaced receipts or a crashed hard drive away from losing large chunks of valuable information.
At the farmers market, missing and nonexistent receipts were the biggest contributors towards missing revenue and inconsistent cash flow. The owners would count the cash box before and after the market to track finances and would record this in a Google spreadsheet in the cloud. While the cloud-based aspect of this was encouraging, the cash box counting was not.
Often times, goods were exchanged as trades with other vendors at the markets, and regular customers were given too much change or too much product due to miscounts. They had no idea where the money was going, and the general consensus was that they were losing 10-15% of their expected revenue at each market.
There was a lot of painstaking data entry in order to convert what historical data they had into digital form, but what we found surpassed expectations. They were most likely losing up to 30% of the cash they should have been driving home with. Using the cloud-based POS solution we implemented, we added a couple of tablets to the mix as well as a USB driven scale to increase weight accuracy. All transactions were tapped into the tablet upon checkout, giving them a very concise view into where the cash flow holes were in their operation. They found that not only were their legacy scales off by 40% but that the trades and freebies offered accounted for more than 20% of their product inventory.
Using this updated POS solution, they were quickly able to reign in the freebies and stopped the bleeding due to inaccurate scales. Additionally, the new cloud-based options gained worked to keep all sales data centralized for real-time, in-depth analysis. This allowed them to increase or decrease prices as the market day moved along, eliminating product leakage (less than 5% now) while elevating inventory management to an optimal level.
Modernizing Operations for Payment and Inventory Management
This all sounds wonderful for our farmers market client, but there is still one critical aspect missing from their overall seasonal business cash flow management. Manually entering in cash transactions is still prone for a mistake, as a misplaced decimal point or a fat-fingered “6” instead of “9” can still cause havoc in your data analysis. Additionally, manual entry of items can have an adverse effect on reported levels of inventory versus actual levels of inventory. Can these be resolved using a modern POS solution?
Thankfully, this answer is yes. Modern POS solutions have innovative abilities to update inventory data in real-time once a transaction has occurred. This does depend, though, on you offering various forms of payment, including EMV chip-enabled card readers, digital wallets, and internet payment options such as PayPal. Offering a wide variety of payment options works to increase your cash flow in many ways.
First, you can better accommodate internet or phone-based sales, so that you can have more freedom in expanding your seasonal sales season as we discussed earlier. Second, these transactions are automated and immediately sent to the cloud, making your books more accurate and less prone to fat-fingered data entry mistakes. Lastly, a modern, cloud-based POS solution will bring with it flexible and non-committal card payment processing services, letting you shop around and change your payment processor as your business needs dictate.
Take Control of your Seasonal Business Cash Flow Management
Let’s face it: These are all great points but come with challenges of their own. Moving from a non-technical POS system to a one that is innovative and with a variety of automated options can be intimidating. Perhaps the most important aspect of using a modern POS solution to streamline your cash flow is to enlist the skills of an experienced provider. The right provider will take the time to learn about your business and your industry. In the end, you are presented with a cloud-based POS solution that takes your seasonal business to the next level.
Implementing a POS system for your seasonal business is a complex undertaking, one that requires expert assistance. Seasonal business operations must obtain the data needed to ensure efficient cash flow management and talech is here to help. The solution we devise for you will match your flexible needs in a volatile business environment, and we will ensure that it becomes a valuable asset in your toolbox. Reach out to us today to sign up for a demo and to learn more about how talech can be your professional POS provider.