Tips for Managing Your Seasonal Business
- July 17, 2019
- By Aidan Dwyer
Running a small business is challenging enough as it is, but seasonality adds an entirely different level of challenges. Only making money during part of the year means that you have to figure out how to stretch your capital to make it until next season. Below we have come up with a few tips to help seasonal small business owners succeed.
Know Your Market
There are 12 months in the year. If you are only making money during a portion of them, you want to make sure that you will make enough money to last you the entire year. To do this you have to make sure your busy months are going to be extremely profitable. Conducting some simple market research can help you better plan out your business. Conduct customer surveys to determine price points. Look into how many competitors are in your market and what they are offering. Also, research your market as a whole so you understand current changes and trends.
Hire Enough Seasonal Employees
When it’s your busy season, the last thing you want to worry about is staffing. You want to have enough employees on hand to make sure that your business is running smoothly. To do this, you want to begin recruiting temporary and seasonal employees during the off-season. You also want to make it clear the role is only temporary. So you donâ€™t want to have employees on payroll year-round if you only need them for the busy season. A great way to do this is to target employees who are only available during your busy season. For example, if you run a summer business such as a pool or ice cream shop, you should look into hiring high school or college students, conveniently on break during the season.
While you may only be making money during part of the year, you may still have expenses year-round. You want to make sure that the money that you are making during your busy season will be able to cover your expenses year-round. Come up with a comprehensive budget that includes all of your expenses and allocate money to each month in order to make sure that you are covered. If you notice that your budget is looking thin, you may want to consider alternative financing options such as a Term Loan or a Line of Credit to make sure that you have enough capital to cover all of your expenses.
Forecasting demand is important for any business. Especially for seasonal businesses that only sell during part of the year. Being left with unsold inventory can be a huge waste of money. For example, let’s say that you own a flower shop and want to make sure that you have enough products for Mother’s day. This is one of the biggest days of the year for flowers. If you overestimate how many flowers you are going to sell, you can end up wasting a lot of money because unsold flowers are perishable.
In order to get an accurate forecast. You want to look at yearly trends and compare what your business, and other businesses in the industry have done in the past and prepare accordingly. You also want to find the right time to purchase inventory. So that you get the best prices and make the most profit. If you own a holiday decoration store, purchasing your inventory in late November and early December probably won’t get you the best prices. Research when your inventory is the cheapest and order accordingly.Â
Use the Off-Season to Improve Your Business
Even though you may only be making money during one season. Treat your business as a year round business and find ways to improve during the off-season. This could be anything from making improvements to your shop, diversifying your product or service offers to make your season last longer, or planning out new marketing campaigns.
Working with a Financial Advisor – Like Us!
No matter how you decide to manage your seasonal business, there is always a constant need for one thing: financing. Whether it be for purchasing inventory or making off-season improvements. Having working capital on hand is essential for the management and growth of your business. At REIL Capital, we understand how seasonal business owners operate their business. Thus, we have come up with many seasonal business financing options to suit their needs. If you want to see how we can help you seasonal business gain the financing that it needs, fill out our commitment free application and one of our small business representatives will contact you.