In one way or another most businesses are affected by changes in season; whether you sell greeting cards or software, chances are, you’ll notice peaks and troughs in your business or sales. While there’s nothing unusual or wrong with this, you want to avoid only being profitable for a few months of the year and losing out on profit during the other months. With that in mind here are my top 3 tips for overcoming seasonal fluctuations.
Plan and be clever
Break down your business and see what facilities/services can be used elsewhere – For example, the majority of my business caters to hens and stags but during the winter months I’ve noticed that fewer people are going on stag and hen parties and that the staff and our services were being underutilised. To counteract this quiet period I set up Eventa the corporate events section of the business.
This turned out to be the perfect solution; Eventa’s peak periods were during the Christmas party period and the peak periods for stags & hens were during the spring, summer and late summer months. It worked beautifully because I already had the booking system and facilities in place – all I had to do was recruit some knowledgeable events industry professionals to come in and train and manage my existing staff to be able to organise corporate events, as well as stag/hen weekends.
Now my business is profitable all year round and not only that, I’ve managed to turn my company into a more versatile events agency.
Prepare for peak times
Make sure you’ve got enough capacity for staff during peak times; there’s nothing worse than customers loving your product but being incapable of catering for them due to lack of staff. Working out staffing levels is hard – too little and the workforce will be overworked and too many means that you’ll be haemorrhaging money. Think about advertising temporary positions during your peak times or hire interns to help with smaller tasks. That way you’re not only solving your staffing problems, but you’re also giving young people opportunities too. Ensure that you have enough office space for them and if you don’t then consider hiring some temporary space or outsourcing.
Watch that cash flow
It’s easy for me to advise this, but at the end of the day, you need to have money coming in regularly to do these things. Make sure your business achieves that – especially if you need to pay staff, rent and other regular bills. This is where many startups fail! Not because they not profitable, but because they don’t bring in regular money to support the business. I suggest having a business whereby your service demands money from the customer up front, this way you’ll always have money flowing through. Just make sure to budget and allocate funds accordingly – If you’re unsure about this, then ask your finance advisor/business consultant to help you with this.
- Watch that cash flow! The survival of your business depends on it. After all, those wages and bills aren’t going to pay themselves.
- Ensure that your staff/system are flexible enough to be able to run another type of business – without having to make too many changes.
- Consider hiring interns or temporary staff during busy times to help during the peak times.
- Think ahead, how will this new seasonal business develop? Will it simply become an addition to your current business, or has it got strong enough legs to stand on its own? For example, Eventa was initially created to fill the quieter periods for my stag and hen business, but now it’s a profitable company in its own right.
- Make sure you’re mentally prepared, yes it’s a risk setting up a seasonal business, but then as an entrepreneur, you should be used to that by now!
Related: How to manage your cash flow