Halloween (or Hallowe’en) is celebrated after darkness descends on 31 October, the day before All Hallows Day (aka All Saints Day). In the UK, the custom dates back thousands of years to the ancient Celtic festival of Samhain, which marked the end of summer and the harvest, and the beginning of winter.
The Celts built large bonfires to ward off spirits they believed revisited the mortal world on Samhain, and pumpkins were carved originally in the USA for the same reason. In the UK pumpkins have largely replaced turnips, which were more commonly used.
As regards to UK consumer spending, Halloween has overtaken Valentine’s Day to become the UK’s third-biggest event after Christmas and Easter. Last year, Britons spent an estimated £310m on Halloween, up 5 per cent from £295m in 2015 (in 2002 it was just £12m). About 10m pumpkins are grown in the UK every year, with 95 per cent of them reportedly bought in the run-up to Halloween.
The lifeblood of business
The surge in Halloween spending, which will no doubt take place again this year, will benefit many UK retail and agricultural businesses. However, other businesses could get an unexpected scare if they’re not careful – and one that isn’t caused by ghosts or ghouls.
Whether at Halloween or any other time of year, suddenly running out of cash is one of the most worrying – if not frightening – experiences a business owner can have. Cash flow problem can suddenly creep up on you, while others businesses are continually haunted by them. Even seemingly successful businesses with healthy sales and margins can fail if they can’t access enough cash to pay their bills when they need to.
Cash is the lifeblood of all businesses, which is why sound cash flow management should be a key priority for your business. It begins with firmly controlling your costs, so that your spending never reaches scary levels. Your business must remain lean and efficient if it is to stay alive and avoid joining the entrepreneurial spirit world.
Your margins should also be as high as possible, while sound credit control is essential, which means being cautious when granting credit to customers, sending your invoices out promptly and chasing payment as soon as it’s due. Week to week, you should have a good idea how much cash is in your business bank account, roughly how much your business owes, how much it’s owed and when significant sums of money will enter and leave your business bank account.
Keeping your business alive
Working with sound cash flow forecasts can help to ensure that your business remains in the land of the living. Based on realistic assumptions of likely sales and costs, making cash flow forecasts allows you to look ahead and predict what cash will enter and leave your business in the months to come.
And if you can look ahead and see something scary heading your way, because your costs will be higher than your sales and you’re likely to run out of cash, you at least have time to act now to cut your costs, boost you sales or find short-term funding to ensure that your business doesn’t come to a gruesome, premature end.
Read our guide to effective cash flow management HERE
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