While all entrepreneurs like to see sales, profits, and cash flow looking healthy year-round, some businesses operate more seasonally. As such, owners and managers must take full advantage of all the sales that occur during the busy seasons to help tide the venture over during the quieter times of the year. If you have a fledgling seasonal firm or plan to start one, here are some tips to help you succeed.
Manage Cashflow Carefully
Managing cash flow carefully and effectively is one of the most important factors in making a seasonal business work long-term. Since you’ll only have money coming in at limited times of the year, you have to stretch these funds to support the venture during times when sales are not happening or are negligible. This means ensuring you save money during the flush periods to cover costs during the lean ones and always know your financial position.
It’s best to create a strict budget to follow so you don’t get over-excited in busy times and spend more than you should on unproven elements. You may also need to utilize a line of credit or some other type of short-term funding to help you cover costs during low-sales periods that can be paid back once orders and, thus, cash flow picks up again.
Strategize and Plan in the Offseason
One benefit of having peak and off-seasons is that you can use more idle time to give you and your team a chance to catch your breath. You can also strategize for the months and years to come and do some concrete planning. Have some downtime to recover after busy periods and avoid burning out, and then get back to work, determining how to improve your venture.
Spend time examining and thinking about what worked well and what didn’t during the previous months and look for ways to fix any problems. Come up with ideas to boost business in the future and do any research you need to complete on elements that will help you solve problems or capitalize on opportunities.
For example, if you run a venture that makes or sells ice cream or other cold food items during the summer months, you might realize that shipping has been a problem and has led to too much spoilage and other loss. If so, you might decide to invest in temperature indicators and trial new cold chain technologies to rectify issues in the future.
You can also use your planning and strategizing time to update your business plan, design new products or packaging, develop improved marketing and sales strategies, and complete financial and accounting tasks. Plus, you could write job advertisements and start finding, interviewing, hiring, and training new candidates so they’re ready to go as soon as your peak season begins again.
Diversify Products or Services
One idea from your planning time might be to find additional revenue streams to help your business grow. To do this, consider diversifying your products or services. For example, is there a different version of some of the products that you could create to make them work in the opposite seasons? Or, can you come up with a product or service related to what you already sell that might be more likely to be used and purchased by people year-round?
If you can expand your offerings in one or more ways, you can then sell these wares to the customers you already have and boost business sales and profits quickly.
Consider Expanding to Other Locations or Markets
Another way to diversify is to expand your business to other locations or markets. For instance, if you sell products that consumers purchase in the spring and summer months in your local area, see if you could target somewhere with different weather patterns in the fall and winter when you’re usually very quiet in the area of your current sales. This might be a place that’s on the other side of the country or even the globe. If this doesn’t seem feasible, see if you could sell a franchise or license your wares to other entrepreneurs in these areas.
Alternatively, consider how you might go after different target markets to expand your business. For instance, if you currently focus on corporate clients, perhaps you could go after traditional consumer ones or vice versa. Or, if you usually target vegans, you could start trying to market to people who have to eat gluten-free or move from a traditional family-focused customer base to a younger single one or retirees instead.
Be creative and do your research to ensure there’s a big enough market in this new area to be worth your time and that there will be plenty of demand for your wares, too, before investing too much into diversifying in these ways.
Other tips for seasonal business owners include staying in touch with customers all year, so they don’t forget about your venture and managing short-term staff members effectively so you don’t end up with employee shortages during the frantically busy times of the year.
All these elements will help you grow your business exponentially over the years and enjoy the success of this expansion.