Forecourt Trader - 30 years at the heart of the fuel retailing community

Money Talk: Holiday times can be stressful... so planning is vital

There are two periods in the year when odd things tend to happen around some smaller businesses and that includes most forecourts. Both are holiday times: one is the extended Christmas/New Year break, and the other is the height of summer; from around now until the end of August.

One issue which pops up this time every year is that of breaching overdraft limits. Typically a site owner/operator keeps a close eye on their bank account to ensure that they don't exceed any existing overdraft arrangement when the direct debit (DD) for the next tanker or latest dry stock supplier invoice is due to be paid. In many small/medium businesses this balancing act can be the most important single thing that the owner/operator does on a daily basis. The holiday period can itself make this balancing more tricky than usual. Depending on the seasonality of the site, holiday time can mean either that there's going to be a need for additional fuel orders to be considered, or conversely that there could be a considerable lull in turnover for a few weeks causing a drop in funds going to the bank for a while.

An experienced operator will use their judgement to predict the cash flow requirements in either case. But anything from roadworks to unseasonal weather can cause a glitch to trading patterns which will throw even the most careful balancing into the red that's when it's time to call the bank, urgently.

Not many years ago, an unanticipated need for short-term additional funding didn't always provoke a crisis. Usually there were staff at the local bank with the authority to make a quick decision, who knew their customers' business well enough to allow something exceptional to go through as a one off.

Today you'll have to deal with some regional office where your 'relationship manager' is based. Even if you get to know his/her name before they almost inevitably move on in the next bank shake up, what happens if that one individual is on holiday just when you need some immediate help? And that's when the crunch comes. Don't expect someone who doesn't know you or your business to put their career on the line for you. By the time they tell you that you'll need to apply in writing, including the last three years complete financial accounts and your latest management accounts; you could have any number of bounced DDs. And that can stop your business. Dead. Permanently.

insurance limits

Even without looking at that worst case scenario, consider some of the other things that can happen during holiday times. Still thinking of cash normally your business insurance will have some limit to how much cash you can leave on-site overnight. At most forecourts the banking is done by the owner/operator or maybe one or two senior staff. What happens when any of those people are on holiday?

At many sites the answer is that instead of daily banking, the cash is put in the safe for several days at a time. Then, you can suddenly find that the amount in the safe exceeds the limit in your insurance policy. Of course this doesn't just apply to cash most insurers put similar limits on the value of tobacco and alcohol that can be left in the shop and/or in a designated safe.

That leads on to some very basic issues just who is allowed access to any safe or locked storage area when the usual manager or supervisory staff are away? Who is given authority over any alarm or CCTV systems, or has any access to pos menus when the manager is on holiday? And it may just be a coincidence, but anecdotal evidence over many years suggests that if there's going to be a break-in at the site, it will happen during a holiday period.

Then there are practical issues which arise when regular staff take a holiday: think health, safety and other compliance matters. From trained people available to see in every tanker delivery to who's the nominated first aider on the premises during all working hours, forget to put proper cover in place for any of them, and you could come back to expensive and time-consuming legal issues. And it's worth remembering that during this time the people delivering to site may not be regulars they could be complete strangers who'll be more likely to notice any shortcomings in paperwork or procedures.

Everyone needs a holiday at some time you, your staff, even your accountant. If nothing else, holidays can just prove that no individual is completely indispensible to any business 24/7, 52 weeks a year. The point is that every business needs to plan for contingencies.That's part of the art of management. Have a good holiday!

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Weekly retail fuel prices: 2 September 2019
RegionDieselLPGSuper ULUL
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