I thought some of you might find this interesting and I’d be interested to hear if you have similar patterns of money throughout the year. This a graph of my company’s checking account balance from 4/1/2021 > 3/17/2022. I picked this range since about March every year is when I feel like a farmer that is finally harvesting crops and making some money. My area (Oregon) is quite seasonal and my company does roughly 2X the volume in a busy month (spring/summer) as we do during our worst winter month (usually Dec).
Anyway, over the years I’ve learned to save the money I make in the summer/fall and let it carry me through the winter. It’s actually taken a few years to be able to do this but I can tell you I rest A LOT easier when the phone doesn’t ring in winter when there’s a few bucks in the bank. I’ve also set up a lot of big expenses to be paid at the end of the summer when I have some cash. Things like a year of Liability/EO insurance for example gets paid in August. I also always look at any company vehicles and do things like tires and maintenance on then before we slow down. The one that always stings is radon machine calibration as I have those set to send away when we’re slow. Honestly, I probably worry more than needed. I have money for unforeseen expenses. It’s just easier to spend a grand or two when it’s coming in the door the next day.
I chopped off the actual dollar values on the graph but you’ll get the idea. In particular you’ll notice the balance stays pretty high in the fall and then drops quickly after the first of the year. Like most years we just started to pick up. I have some large credit lines but really don’t want to play that game. The “heartbeats” each month are when I pay the employees.
Again, I’m curious if you all see similar patterns and/or how you manage seasonal slowdowns? For a bit of context we do about 600K/year in sales.