Despite the challenges, seasonal businesses can offer equal parts challenge and opportunity. They can be an excellent way for entrepreneurs to dip their toes into small business ownership, and for those looking for a change of pace, running a seasonal business can be a great option.
What is Seasonality?
Seasonality refers to the variability of sales throughout a year. Many retailers experience their peak season around the Christmas holiday season in November and December.
Follow these tips, and you’ll be well on your way to making the seasonal business roller coaster a bit more predictable.
Create a plan
One of the biggest advantages of running a seasonal business is knowing exactly when it will wind down. This gives you time to schedule and plan for the next season. During your offseason, take some time to think about what you could do to improve your business for the next go-around. Maybe you can offer new products or services or ways to market your business more effectively.
Perhaps the most challenging aspect of managing a seasonal business is cash flow, particularly before the arrival of customers and after the purchase of inventory. Short-term loans or a line of credit can help fill the gaps created by seasonal sales fluctuations.
Some seasonal entrepreneurs avoid starting the season with completely full shelves and storerooms. Starting slowly is smart for two reasons: it’s more accessible financially, allowing you to see what is actually selling and what is not. Trends and tastes can change, and what flew off the shelf last year may be old news for this season. The best approach is to solidify your relationships with your vendors and suppliers so they will be responsive when you do need something, and then start slowly and ramp up as business dictates.
It’s essential to be realistic about the ups and downs of running a seasonal business. Don’t expect to make a fortune during your busy season, and don’t be discouraged if sales are slow during your offseason. Planning for these seasonal fluctuations will help you stay sane during your most active and slowest times.
Know your numbers
Accurate cash flow projections are essential and will provide the insights needed to succeed. Have your accountant help you put together a cash flow projection for the season. This will give you an accurate picture of how much money you need to make or save and when you will need it.
Using historical data to predict your revenue, expenses, and slowest and busy times of the year, you can plan your clear road map for the entire year.
Staffing presents many issues. On the one hand, having seasonal employees is excellent because it cuts down labor costs. However, the downside is that retaining good employees from previous seasons is challenging, which means conducting time-consuming training each year.
Seasonal employees are not likely to stick around for another season, so one way to increase the pool of applicants is by offering temporary jobs during slower seasons, which can be a win-win situation. Seasonal businesses have certain advantages: they can provide employees with quick, short-term work opportunities and be very flexible when hiring.
Another solution is to provide a bonus to those who return and offer incentives to those who train new employees. One more way you can maintain quality and consistency from one season to the next.
Keeping your customers happy is one of the best ways to keep them coming back, bringing us another challenge for seasonal businesses: customer service. Providing excellent customer service during high-volume seasons can be difficult because employees typically work long hours. Making sure you have enough staff on hand during this time will help ease some stress and provide excellent service.
It is challenging to market your business if you are only open for a few months out of the year. You can use social media to attract customers, but it takes time and patience. Other little things go along with marketing, such as writing blogs or press releases that keep people interested in what you have at your store.
Partnering with local business groups, such as your chamber or downtown business association, offers the opportunity to cross-promote or collaborate on marketing can be another way to market. Work together to create advertising campaigns or group discounts.
Seasonal businesses can even lengthen their sales cycle by adding services during the slow months. For instance, a lawn care company that is busier in the spring and summer months could provide gutter cleaning or snow removal in the winter months.
Now that you know the basics of managing a seasonal business, it’s time to start putting them into practice. Planning ahead and being realistic about the ebbs and flows of your seasonal business will help you succeed during your busiest and slowest times. You can have a successful season by knowing your numbers, staffing needs, and what marketing strategies work best for you.