If you are a seasonal business owner or operator, you know that you face some special challenges. Sales may slow down significantly during certain times, yet you must manage through the “troughs” to stay profitable (and sane.) But don’t despair. There are many other seasonal business types and many other owners facing and conquering their seasonal challenges.
What is a Seasonal Business?
A seasonal business is a business that generates most of its sales during more limited time periods of a year. Examples of seasonal businesses include snow removal services, ski resorts, lawn care companies, school-related companies, and vacation destination businesses. Also, some sports and recreation facilities, like summer camps and outdoor swimming pools, for example. Some industries are highly seasonal including, for example, farming, and lobstering.
What Are the Pros and Cons of a Seasonal Business?
The pros include:
- Providing owners with more time to develop budgets, refine procedures, train employees, upgrade facilities, and prepare inventories of products or services.
- Giving businesses more time for direct marketing and customization of products and services.
- Allowing more time to secure seasonal labor.
The cons include:
- Hiring may be more difficult since the periods of employment may be shortened, and a higher rate of employee turnover may occur.
- A business may struggle with what may feel like re-starting each busier season.
- Any major economic, or even weather swings, can exacerbate the challenges of seasonal lows.
Slower periods, no doubt, require a great sense of commitment, along with major doses of diligence, good management, and creativity.
How to Survive in a Seasonal Business
Use these tips to survive in a seasonal business, knowing that even when sales slow down, you don’t have to wave the white flag and surrender:
- Manage the business’s cash flow carefully. Have cash reserves available or get a working capital loan to keep needed funds flowing.
- Make sure to develop and nourish good relationships with your banker. You may need a line of credit to carry you through the slow periods.
- Make sure to develop and nourish good relationships with your suppliers. Based on past business performance and with developed trust, you can ask them to provide continued service and good terms even when funds are tight.
- It’s always important to manage expenses wisely. It is even more important in a seasonal business to keep costs as low as possible during slow seasons.
- Stay in touch with your customers year-round. Keep their awareness as top-of-mind as possible.
- Offer slow season incentives and discounts.
- Be creative in attracting customers during slow seasons. That may include offering special seasonal products or services, organizing special events, or finding ways to extend the normal season.
- Use the available time to strategize, plan for, and strengthen your business.
- Use the time wisely to prepare for the busier season just ahead. That can include enhanced training, hiring of stronger team members, making facility repairs, and boosting inventories.
- Look for new business opportunities or niches to serve. Are there ways to diversify your offerings? Can you do some business-sharing with other businesses that have more stable or longer seasons?
- Build your business’s reputation in the community.
Get Expert Accounting and Financial Assistance
Contact Doerhoff & Associates, CPA, based in Jefferson City, MO for professional accounting and financial assistance that you can count on. Doerhoff & Associates has one goal in mind, to provide comprehensive business accounting services designed specifically for your success.