What is Blue Monday?
Blue Monday is an invention of the media to characterise the most depressing day of the year. There is some debate about whether it is the third or fourth Monday in January but the point is that many people find the end of January pretty dire on many fronts. It is also a tough time for many businesses which experience their own mini credit crunch and reach a low point.
Why do businesses get the Blue Monday blues?
- Trading cycle dips
Many businesses trade best in the run up to Christmas. Everyone wants everything done by then and when January arrives, the phone stops ringing and new contracts are thin on the ground. Business owners take stock and don't necessarily like what they see.
- Cashflow dries up
If you are not in retail the month of December is a short working month when the sales hit a seasonal low and depending on whether or not sales invoices are factored/discounted this either hits cashflow in early January or at about the same time as high supplier payments fall due.
- Taxes become due
A variety of taxes tend to fall due in January. Self assessment tax VAT if your business has a calendar quarter return date and corporation tax if the company has a 31 March financial year end, which are all quite common.
- The calendar cycle
Even if your business does not have a 31 December calendar year end the Christmas break and New Year brings a rush of New Year resolutions and provides an opportunity to re-assess. Many businesses finalise their management accounts in the third week of the following month and if these are disappointing or worse they can add to the gloom.
Business owners that can relate to some or all of the above to their own business circumstances need not face these issues alone. The important thing is to act before the pressure on cash flow becomes overwhelming - that way there are many more options and potentially better outcomes available.
What you can do
A problem shared is a problem halved. If you are concerned whether your company is insolvent or whether you might become personally liable for your company's debts and would like a free no obligation business health check call 0800 331 7417.
