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This Australian small business has found a solution for managing their cashflow


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Cash flow – for businesses both large and small – can be a make or break issue, but it’s particularly important for small businesses trying to take the next steps towards growth.

For businesses that have peaks and troughs in their sales and operations managing cash flow while also being able to invest in planning for busy periods is crucial.

Like most florists, Lily’s Florist Australia has huge peaks in demand before certain dates every year – with Valentine’s Day and Mother’s Day leading the charge, making up a huge proportion of annual sales despite being only two calendar days.

Owner of Lily’s Florist Australia, Andrew Thomson, uses PayPal Working Capital to support his business operations before and after these peaks, like Valentine’s Day.

“Depending on what day of the week Valentine’s Day falls … we usually see the week contributing roughly 7% to our annual turnover,” Mr Thomson told Business Insider.

Without flexible access to capital, businesses like Lily’s Florist Australia would have to save up their own funds in the lead up to days like this in order to meet demand – essentially taking capital risk on their own performance on the day.

PayPal Working Capital is an alternative option for businesses that use PayPal. Businesses are assessed for a loan amount on their PayPal sales history, and then agree to pay the loan back as a percentage of their PayPal sales.

“By leveraging PayPal Working Capital, Lily’s Florist Australia has been able to get flexible access to funding at the most important times of the year for my business,” Mr Thomson said.

“The ability to quickly access capital and pay it back, on a percentage per order basis, means I have been able to invest properly in marketing activities for big events like Valentine’s & Mother’s Day, and to ensure our website uses all the latest and safest technologies, without needing to stress about cash flow.”

Peter Cowan, PayPal’s Director of Mid-Market, Small Business and Partners, said that this kind of access to capital is one way small businesses can compete with bigger players – by investing in marketing materials, having their inventory prepared and their staff trained and resourced appropriately.

“In order to compete with larger retailers, small businesses need to be thinking outside the box,” Mr Cowan said.

“They need to take advantage of alternative lending solutions like PayPal Working Capital so that they can avoid cash flow pressures and capitalise on increased demand at peak moments.”

Mr Thomson agrees, with marketing being “vital” to his business; “the investment into SEM & Marketing ranges from 5%-7% of total sales.”

PayPal Working Capital is just one of the financial platforms changing capital access for Australian businesses, as fintech’s entering the space seek to redefine what a ‘loan’ looks like.

The other big change for many businesses is the move away from competing with their fellow bricks and mortar retailers, and instead looking out for e-commerce threats.

“Our competitors are other online florists, while bricks and mortar florists are our partners,” Mr Thomson said.

“The biggest shift online in the last 10 years is not how much [online sales have] grown but the way shopping has changed – that is mobile-commerce.

“For Lily’s Florist Australia, 2014 mobile sales represented about 12% of all online sales, in 2018 that figure was close to 50%, and by 2020 I predict it to be closer to 60% due to improvements in ‘frictionless transactions’.”

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