Whether we like it or not, not all businesses have a constant cash flow. Seasonality creeps in on every business like bright green leaves turning to dark brown. It’s a business reality that at times you’ll have a high demand for your product, and at other times your sales experience dips and slowdowns.
Seasonal businesses are often seen in travel and tourism businesses. Summer is almost always a peak period during which people schedule a vacation and have more money to spend. Other seasonal businesses include those that rely on holidays. For instance, Christmas stores and gift shops peak during the holidays and decline afterwards. Flower shops see profitability during Valentine’s Day, Mother’s Day, etc., but there are many others, not as obvious to outsiders, who see this tough fluctuation as well.
As a business, these seasonal fluctuations may pose a problem to your profitability, especially if you’re not prepared for them. You’re probably weighing your options as to what you can do during the offseason. If you haven’t figured out which direction you should bring your business, here are some seasonal business tips to survive your offseason.
1. Understand how your seasonality works.
The simplest way how to track your seasonality is by gathering data on your sales graphed versus time. Whether you’re an e-commerce business or a mom and pop shop, sales are a good indicator of your seasonality. However, if you’re just starting your business, it should be expected that your business would experience a high growth, if not a rapid one. This might hide the effect of seasonality on your business.
As a rule of thumb, you should gather data for 2-3 years to confirm a seasonal trend. If your business is still young, refer to industry sources so you’ll at least have a guideline. It doesn’t beat actual experience, however, as every business can be unique.
2. Save money for a rainy day.
That Aesop fable about the ant saving up for a rainy day is not only a source of a valuable life lesson for kids but for business owners as well. The business boom brought about by the peak months might give you a huge inflow of cash, and it’s tempting to spend a substantial amount of it.
However, the rainy days of a seasonal business will certainly come. It can be hard to maintain a business through the slower days. Thus, consider stocking some money in reserve to serve as a cushion just in case you’ll need it.
3. Diversify your product line.
This might just be the most important in this set of seasonal business tips. You would need to look for an alternative source of income, preferably a business that is the opposite of the seasonality of your core business. Your goal is to expand to a larger customer base and regulate your cash flow all year round. As a simple example, a business that sells heaters will find it hard to sell one during the summer. To diversify, the business should sell air conditioners to counteract the seasonality.
Do take note that you should not take away the focus from your core business, especially if your alternative revenue stream is not related. Your diversification should serve only to support you until your sales pick back up.
4. Consider changing business hours.
Maintenance of a business, especially if you have a physical store, can be a costly expense. Aside from that, the expense on wages can hit hard especially if you have zero sales during a week. Conversely, peak months would translate to higher demand for your product. Your business should take advantage of this rise in demand to compensate for your offseason.
Thus, consider shortening your hours during slow months and increasing them during peak ones. However, make sure you consult your employees with regard to changes in business hours and make it agreeable for all. Be clear about what they should expect of the job. After all, transparency is key to make you and your business trustworthy, for both customers and employees.
5. Stay active in social media.
It might be your offseason but that doesn’t mean your social media marketing should take a break too. Being active in social media can engage your target consumers any time of the year. There might not be enough demand for your product but your customers still exist. The idea is to create hype for the coming peak season by staying relevant.
There are a lot of things to do in social. Publish new blog content and share them with your followers. Create a social media contest to increase your followers. The thing with seasonal business is that customers will plan ahead even months in advance. Being relevant keeps you at the top of their minds.
6. Keep in touch through email and direct mail.
Aside from social media, you can use the not-so-busy season to create a mailing list and generate leads. As I mentioned earlier, people plan ahead, especially for the holidays. Stay in touch via email and offer early bird discounts. Promote your blog content and social media pages. Deliver valuable content that is relevant to your buyer.
To complement your email campaign, integrate an offline direct mail marketing campaign to your target market. Seasonality, after all, thrives on special occasions. Your business can tap into seasonal events and holidays to reconnect to your consumers. Greeting cards, postcards, and holiday cards can go a long way in keeping you and your business relevant to your customers. Your email and direct mail engagement may not be as high as during your peak months. However, as with all the items in our seasonal business tips list, this will serve to prepare for the coming peak months.
Do you have more seasonal business tips? Share your techniques in the comments below.