December 29, 2020 | 4-minute read (640 words)
Every seasonal business, whether it’s a winter ski camp or a Christmas décor store, has a short timeframe and must scale back operations during the off season. It’s challenging for them to deal with declining sales, a drop in cash flow and long expense sheets. What they need is a plan to keep their business afloat during the slower months.
Below are some tips for seasonal business owners to consider so they can make the off-season work for them.
Know the Business Cycle
Before venturing into any business, you need to do a significant amount of research on the industry and understand how the business cycle functions. What’s the income that you expect? When are the sales most likely to drop? What’s the level of fluctuation you’ll experience? You need to study the market and speak with industry sources, customers and peers. When considering business seasonality, you need to also manage your costs so that you have enough to meet your expenses during slower times.
Find New Revenue Streams
During the off-season, your business doesn’t have to come to a halt if you can explore other opportunities and diversify your services. To remain profitable year-round, you need to offer and sell related products or services that your customers seek. Look for alternatives that can sustain your business and bring in annual stability. You can use the same resources, cut down overhead costs and market your new business to your existing customers.
Market Your Business
Marketing is not short term. Even if you have a seasonal business, you need to market your product throughout the year. It is crucial for you to stay in touch with your customers – existing and prospective. You need to keep the conversations alive so that your business has a higher recall and stays relevant. This is an excellent opportunity for you to reach out to your target audience before the season gets busy.
Manage Your Staff
Hiring for a seasonal business is not easy. You may face issues if you have to hire staff for every season. You’ll end up spending an enormous amount of money, and investing time and resources, to train new employees. Therefore, you should manage their expectations well, and be clear about the time period of service, wages, rules and regulations. Motivate them, and build a strong and long-term relationship so that when the season ends, they look forward to the next one. If you make them feel valued, they’ll stand by you.
Have a Strategic Plan
Use the downtime to observe, plan and strategize. Look at the business figures, study the market, set targets, make an expense sheet and list the requirements you expect to face during the next season. You also need to evaluate your last season’s performance and make a list of things you learned from it. The plan here is to be prepared for the worst-case scenario so you’re ready for anything.
Connect and Network
In this digital era, you have the advantage of connecting with your target audience at the tap of a finger. Use the off season to create quality content for your customers, because content will ensure that customers remember you. Build your own community, write blog posts, participate in forums, conferences and trade shows, remain active on social media, and attend business events that will help you find new partners and investors.
When you have a seasonal business, you need to ensure that you have people to fall back on. The most important person involved is your funding partner. They should be aware and understand the kind of business you are in. An experienced funder knows the market dynamics, and can facilitate capital investments and loans when needed.
Most importantly, if business is at its slow period, reduce your spending. Cut down expenses wherever you can.