Owning and operating a seasonal business presents challenges that are not encountered by owners of traditional businesses. One of the most notable issues involves fluctuations in cash flow. During the business's high season, your productivity increases and you bring in high levels of revenue. During the off-season, however, cash flow slumps and financial problems can ensue. Seasonal businesses also face unique issues with regard to inventory management, staffing and advertising.
Here are some tips to help you keep your seasonal business healthy and thriving all throughout the year:
- Know when your seasons begin and end.
Use data from past years to determine when your most productive seasons begin and end. Having this information on hand will help you to plan more effectively in the future.
- Look for income-earning opportunities in the off-season.
If you'd rather not deal with the collapse of your cash flow during the off-season, look for alternative income streams that can keep money coming in even when your company isn't at its most productive. If possible, seek out income-earning opportunities that are related to your business's primary purpose. For example, if your business's primary purpose is to sell pool equipment during the spring and summer months, consider selling winter sports equipment during your off-season.
- Plan ahead.
All businesses require financial planning. However, this type of planning is even more important for the seasonal business. Always look at least six months into the future when analyzing your finances, planning inventory and managing staff.
- Stay on consumers' minds.
During the off-season, it may seem like you need to eliminate advertising from your budget entirely. However, many of your target consumers are still paying attention, especially as the beginning of your productive season draws closer. Feel free to cut back on advertising during the off-season, but stay at the top of your consumers' minds by communicating with them sporadically throughout this time.
- Seek out professional advice.
Managing the cash flow of a seasonal business is complicated. Lighten the burden by seeking help from the professionals.
Do you have the support you need to manage your small business bookkeeping?
Schedule a 30-minute appointment to speak with a local small business adviser.