Does your business suffer from peaks and troughs throughout the year? Known as seasonal fluctuations, these periods of high and low growth can cause havoc for your venture – that is unless you come prepared.
From planning ahead and diversifying your income streams to acquiring funding to manage your cash flow disruptions, there are a number of things you can do to manage your seasonal business successfully.
We’ve written about each of these below to ensure your business thrives all year long, no matter what season it is.
1. Research the Market
Before you embark on launching a business, you should carry out the necessary industry research to determine if seasonal fluctuations affect your field. Many businesses will be affected by seasonality to some extent, such as a spike in sales at the end of the year. Others may have to scale back entirely, such as a beachside resort during the winter.
Focus on industry trends while performing your research and be sure to ask other businesses within your field if they experience increases or decreases in demand throughout the year. Gain a thorough idea of how significant these fluctuations are, as well as their methods for coping with them.
The more knowledge you acquire during this stage, the better, as it allows you to plan around these challenging times.
2. Consider a Flexible Workforce
Permanent workers are invaluable to a business, yet for those experiencing seasonal fluctuations, having temporary workers on-hand may be the best choice. Of course, every small business needs to have some permanent base staff working within their business, but don’t feel the need to hire more of these during your peak periods.
Temporary and contract workers are up for the challenge and will be hired with the expectation that they’re only there for a specific period of time. This saves you the horrible scenario of having to let go of permanent employees when (or if) business slows down again.
3. Diversify Your Revenue Streams
If you operate a highly seasonal business, your goal might not be to ride the wave but to overcome it altogether. For businesses wishing to eradicate seasonal fluctuations from their operation, diversifying revenue streams is a great place to start.
What relevant products or services could you offer during your downtime? Many shops selling surfboards and swimwear have expanded their product offering to snowboarding and ski gear during winter, for example.
Test out potential demand through effective market research first. Additionally, try to concentrate on expanding your brand through products or services that still make sense to your target audience. Ideally, you want to work with resources you already have or can easily obtain.
4. Consider Temporarily Closing or Renting Your Shop
If you would prefer to approach slow seasons in your business by cutting back your budget, then temporarily suspending operations from your shop may be beneficial. This allows you to operate online or from home instead, so you don’t miss out on sales entirely.
If possible, you could then rent out your shop to another business that needs it in the meantime. This allows you to continue earning additional money while your operations are scaled back.
5. Plan Your Expenses Ahead of Time
Cash management is extremely important in business, particularly because it helps you to forecast and plan your future expenses. Even during slower periods, your business will still need to pay staff wages, utility costs, insurance, rent, and more.
Draft up these costs within a spreadsheet, then calculate the minimum amount your business needs on-hand to be able to continue running. Ensure that you factor in less frequent costs that may be incurred during this time too, such as equipment repair.
6. Acquire Funding to Manage Cash Flow Fluctuations
Although it’s vital that you plan for upcoming expenses, sometimes unexpected scenarios can affect your business without warning. The global pandemic is a great example, as this unprecedented event caught the world off guard.
If seasonal fluctuations are wearing your business down, then help is available. Seasonal business loans can provide affected businesses with a boost in working capital and help them to maintain the day-to-day operations of their business.
Contact us at (714) 500-6622 to learn more about your options. You could qualify for up to $250,000 in just 24 hours.
