January slow period for a cafe or bakery: a cash flow plan to rebuild the buffer

The tills have stopped ringing for Christmas, the pre-order pickups are done, and the diary looks very empty. January is where many cafes and bakeries find out whether December’s good work actually left any cash behind. This guide gives you a way to put numbers on the trough, a sensible order for trimming costs, and the dates that matter before February’s BAS arrives.

How do you work out your January runway?

Runway is the number of weeks your cash can cover the gap between what a quiet week earns and what it costs to keep the doors open. You need three figures:

1. Expected January weekly sales. Use last January’s takings if you have them, then adjust for any changes. If you are new, assume a dip and test it.
2. Gross profit on those sales. Sales minus ingredients, packaging and card fees. Food businesses often keep somewhere between half and two-thirds of each sale after these costs, but use your own margin.
3. Fixed weekly costs. Rent, core wages, super, insurance, loan repayments, power, software and anything else that lands whether you trade or not.

Weekly shortfall is fixed costs minus gross profit. Runway is the cash you can safely use divided by that shortfall. Our Dough gap calculator does the arithmetic and shows the result in weeks. The working capital gap explained guide covers the logic behind it.

A worked illustration (not a real business)

Picture a neighbourhood bakery-cafe with these numbers:

Item	Per week
January sales	$9,000
Ingredients, packaging and fees (about 32%)	$2,880
Gross profit	$6,120
Fixed costs (rent, rostered wages, super, power, insurance, repayments)	$7,800
Weekly shortfall	$1,680

The owner starts January with $7,500 in the buffer account. That is about four and a half weeks of runway. If trade stays flat until the first week of February and then returns to break-even, the total burn is around $8,900, so the bakery runs about $1,400 short before the shortfall closes.

Now add the BAS. If the owner kept the quarter’s GST and PAYG withholding in a separate account, it is covered, and the gap is the $1,400. If that money was folded into the everyday account during December, a roughly $5,200 BAS lands on top, and the gap becomes closer to $6,600. Same shop, same sales, very different January. Your numbers will differ, but that is the shape of the problem.

What dates should you have in the diary?

Four dates shape the first quarter of 2027:

• Public holidays. Christmas Day 2026 falls on a Friday and Boxing Day on a Saturday, so most states observe a substitute day on Monday 28 December. New Year’s Day is Friday 1 January 2027, and Australia Day is Tuesday 26 January. Holiday pay is higher under most awards, and the Fair Work Ombudsman’s public holiday guide explains how it works. A quiet public holiday can still cost more in wages than the takings bring in.
• Super timing. From 1 July 2026, Payday Super means employers generally need to get super to the fund within seven business days of payday, as set out on the ATO’s Payday Super page. There is no longer a 28 January quarterly lump, so super leaves the account with each pay run. Build it into the weekly fixed cost, not into a January surprise.
• BAS for October to December. For quarterly lodgers the ATO due date is 28 February. In 2027 that is a Sunday, so the practical date is Monday 1 March. Confirm your own date with your agent.
• Your busiest-to-quietest handover. Mark the first week your takings return to normal. It tells you how long the trough really is.

Christmas also means a large chunk of your quarter’s GST sits in December sales. Our tax dough jars guide shows how to keep that money apart.

In what order should you cut costs?

Not every saving is worth making. A sensible order is:

1. Ingredients and waste. Shrink the bake list and menu for the slower days. Make less of what sells slowly, and use the freezer for what keeps.
2. Rostered hours. Match shifts to real trade, day by day. Check your award for minimum shift lengths and notice before changing anyone’s roster.
3. Optional spending. Pause new equipment, refits, ads that are not working and subscriptions you do not use.
4. Supplier terms. Ask early for a different order schedule or a short extension. Suppliers usually prefer a conversation to a late payment.
5. Last of all, the fixed items. Rent, insurance and tax money are the wrong places to find savings. They either cannot move or cost more when they do.

Resist the urge to cut the things that keep customers coming back. A bakery that runs out of its best-seller by 10am in January loses the loyalty that carries it through February.

How do you rebuild the buffer after Christmas?

Rebuilding is about the order you pay yourself and others back, not how fast:

1. Pay the tax money first. Move the quarter’s GST and PAYG withholding into its own account before anything else.
2. Rebuild a small starter buffer, such as a week of fixed costs, before paying down anything optional.
3. Restore supplier terms and any catch-up payments you agreed.
4. Grow the buffer towards four to six weeks of fixed costs over the rest of the year. Peak weeks, such as Mother’s Day and Easter, are the natural moments to top it up.

Our funding a busy season before it arrives guide covers the other side of the calendar, when the cash goes out before it comes in.

If your runway comes out shorter than the trough, you can check your options in about a minute, well before the quiet weeks begin.

When does short-term funding make sense for January?

Funding is worth considering when:

• the gap is predictable and short, with a clear return to normal trade;
• last year’s takings show a stronger February and March;
• repayments still work in your quietest week, not just your average one;
• the money protects something that earns, such as keeping a trained team or ordering for a profitable season.

It is a warning sign when the weekly shortfall is large every month of the year, or when last year’s buffer was gone by March. That points to pricing, rent or margin, and borrowing only delays it.

For trading businesses, unsecured and cash-flow options typically run from $5,000 to $500,000, depending on turnover and bank statements. Smaller unsecured amounts can sometimes be arranged the same day, but December is still the better time to ask. Choices to compare include a business line of credit you draw only when needed, a short-term business loan sized to the trough, or seasonal business loans designed around your calendar. Lenders will read your statements, so it helps to know what lenders see in your bank statements before you apply. The cafes and restaurants page covers how a hospitality business is assessed.

What mistakes make January worse?

• Spending the GST. Christmas sales carry the quarter’s GST, and the bill arrives about eight weeks after the rush.
• Waiting for February. Gaps are easier to fix at week one than at week five.
• Cutting the best trading hours. Hours that still earn money are not the ones to trim.
• Skipping the runway calculation. A feeling that things will pick up is not a plan.
• Borrowing without a repayment test. Work out what the repayment is in your worst week, not your best.

Let January be a pause, not a panic

A quiet January is normal for plenty of food businesses. The ones that come through well are those who counted the weeks in November, kept the tax money untouched and asked for help while there was still time to choose.

If your numbers show a gap, telling us takes about 60 seconds, and there is no credit check when you first enquire, so your credit file stays untouched just for asking. We don’t send your details to a pile of lenders, which means no flood of calls in your quiet week. A real person looks at your situation, including your takings and the dates above, and calls you to talk it through. Please fill the form in accurately, with your real turnover and the amount you need, so we can match the right option first time.

Find out where you stand before the quiet weeks →