How to Run a Seasonal Business Without Going Broke in the Off-Season
A seasonal business is one that earns the majority of its income during a particular part of the year. The annual business cycle of a company that runs seasonally is typically predictable, and follows trends in weather, culture, and recreation. While the business is on-season, the company should be operating at peak performance to capture as much profit as possible during its peak annual sales cycle.
The off-season for many seasonal companies is an opportunity to instigate a new business venture, reshape structure, or implement a new marketing strategy. Making a holistic and year-round financial strategy is important to staying financially stable throughout the year, especially for those that have seasonal peaks and depressions in profit.
Be Financially Ready In Season and Out Of Season
Create a comprehensive plan to budget holistically for those less profitable seasons. Budgeting is something all companies should be familiar with, but for those with seasonal incomes, it may take some flexibility, frugality, and determination. In a survey by the Chamber of Commerce, nearly half of failed small business owners contribute the failure to lack of profit. The second most common issues were related to poor planning and bad management. Keeping a calendar and planning ahead for varying and off-season expenses may help to create a budget for a small or seasonal business that guards against the company going broke in the off-season.
Increase Business and Profits in the Off-Season
Look for ways to increase business opportunities and diversify services. As a lawn care and maintenance company, are there ways to develop winterizing products or services? If a company rents wedding decor, can the decor be repurposed for the winter holiday? Perhaps seasonal eateries, novelty, or mobile food services can cater events in the slow months. Finding ways to adapt to clients may stretch profitable seasons, or just create a cash flow that defends against the desolate months. Here are some more ideas on how to keep the income rolling through the slow times.
Offer Off-Season Specials
This can be a great opportunity to slash prices and get rid of older stock. Utilize marketing tactics that create a sense of urgency to improve sales. Provide a “one-day-only” or “flash sale” which might entice customers with the limited time offer. Holding a giveaway or contest might also be a way to influence potential customers to make purchases for off-season items. This can also be a great opportunity to collect email addresses and contact information for entrants (with permission and full disclosure) to create an email list for marketing purposes.
Offer Payment Plans or Early Payment Specials
If your company offers expensive products, consider creating monthly payment plans. Spreading payments out may help your clients or consumers afford your service or product, while simultaneously generating income for the company over a range of time. Early payment specials can also generate income in the slow months by offering discounts for early purchases for the upcoming season.
Rent Out Retail Space and Store Your Products
Rather than renting out a retail or office space during your off-season, put your seasonal business assets into storage to save money during the slow times. If the company owns a physical location, consider the storefront as an asset. Store items during the slow season and rent or sublet the space to another seasonal company to gain income throughout the year.
Create a Seasonal Marketing Plan
Take the downtime to focus and hone the business structure and marketing plan. Analyze the budget and reflect on what worked and what didn’t over the past season to strategize for the next busy season. Utilize the slow months to stay in touch with customers year-round by sending informative newsletters and monthly emails that provide relevant information.
Upkeep a blog and put work into creating or continued development of the company’s online presence. The content doesn’t have to be directly related to the product that you sell, but should be relevant to the topic. As an example, an outdoor adventure company could write articles on National and State Parks, or what work it takes to keep up a trail, or trail etiquette. Having an online presence may also create the capability to do business with customers in other locations that may be in season for the items you wish you sell.
Build a Financial Back-Up
Even the best of budgets can be out-done with an unforeseen crisis or event. Building and obtaining good credit may be essential to a business’s survival. The ability to rely on credit built from a healthy financial portfolio may save a company from the high interest rates that usually accompany dire times.