As summer draws to a close, for the millions of seasonal business operators across the country so does another peak selling period.
Whether you operate a hot dog concession stand on the Jersey shore or run a B&B establishment on the ski slopes of Vermont, choosing to make the bulk of your profits during certain times of the year requires a particularly innovative and tenacious small business owner who knows how to ride the highs and optimize the lows of running a seasonal business.
Whether you are interested in starting, or already own a seasonal business, here are some tips for getting the most out of your business year-round.
1. Manage Cash Flow and Credit
Regardless of whether you keep your doors open, or close for the quiet season, it’s critical that you manage your cash flow and maintain good credit during off-season. There are a number of strategies you can employ to help you achieve this:
- Manage Cash Flow – Managing accounts receivable and accounts payable can help you ensure that cash flow isn’t compromised at any time of year. Seek to secure a percentage of customer payments upfront as often as possible. This will ensure you have cash-in-hand as soon as possible and also help mitigate the problem of slow-paying clients. To help manage the amount of cash that is going out, try to negotiate extended payment terms from suppliers so that you can spread out the amount owed on goods that you purchased before peak season and haven’t sold yet. Get more tips on Understanding and Expanding Cash Flow from Business.gov.
- Consider a Seasonal Business Loan – Another option for addressing seasonal requirements for short-term and cyclical working-capital needs is to consider a government-backed business loan. The SBA offers a Seasonal Line short-term working capital loan program which provides advances against future inventory. The loan is offered under SBA’s CAPLine umbrella loan program. Read more about loan amounts and eligibility requirements here.
- Find Alternative Sources of Income – Many seasonal business owners are able to diversify their core offering to help them do business throughout the year. For example, landscaping companies often morph into snow clearing businesses in the winter. Alternatively, consider re-training and acquiring new skills. For example, if your core business is building decks and patios, could you diversify in the winter by expanding your portfolio to include interior construction? However you choose to diversify, be sure to get the right licenses and permits. Business.gov’s Permit Me tool can point you to what licensing you may need based on your zip code and profession.
2. Get the Most out of your Seasonal Workforce
While hiring temporary employees can provide low-cost help during peak season, this labor model does have its down side in that hiring, training and retaining good employees can get resource intensive for a small business. One step you can take to help overcome this is to encourage employees to return next season. A quality work environment with incentives and soft benefits can make your business a place that seasonal workers will want to return. Continued outreach and incentives during quiet periods will also help you maintain relationships with your best workers even when they aren’t on pay roll. For more tips, read Get More from Your Team – 5 Employee Incentive Program Ideas that Pay Off.
3. Use Off-Peak Seasons Productively
Whether you “close shop for the season” or just engine along at a slower pace, use your off-season productively so that when your peak season comes round again your customers are there with you.
Take stock of your business plan; review your product line-up and market positioning; assess and develop a plan for dealing with any competitive threats, and so on. Use this perspective to start planning and executing your marketing activities and do whatever it takes to maximize the small seasonal window of opportunity that you have to realize the fruits of your labor. Even during quiet seasons there are still ways to stay in front of customers and help keep your business top of mind when it comes time for them to make their purchasing decisions.
- Small Business Loans and Grants Guide – Federal, state and local governments offer a wide range of financing programs to help small businesses start and grow their operations. This guide from Business.gov can help you understand your options and find the right financing for your needs.
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