Growing Your Business: Dealing with Seasonality
As a seasonal business owner, you already know the highs and lows of seasonality can get stressful. In fact, you face challenges other businesses don’t have to worry about, such as:
- Saving enough to pay for utilities, employees and other business expenses during your off-season
- Keeping customers engaged all year-round
- Managing your inventory through your slow months
- Maintaining a loyal customer base throughout the year
Whether you own an apple orchard, Christmas shop, or anything in-between, there are ways to overcome the challenges of seasonality. That is – if you’re willing to get out of your comfort zone. With the right preparation, innovation, and research, your seasonal business can become a force all year.
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Ways to overcome seasonality
Your seasonal business doesn’t have to stay seasonal forever. It is possible to transform your seasonal business into a year-round destination for customers. To start overcoming your business’s seasonality, consider these tips:
1. Look for ways to diversify
Instead of surviving the off-season, look for new opportunities. Almost every business can find another product to sell in their off-season. You want to choose new products that compliment your existing products. This will help fortify your brand throughout the year. For example, if you own a plant store that thrives during the summer, consider offering Christmas trees in the winter. Expanding your products in the off-season can help increase your cash flow all year.
Another way to keep customers flowing into your business all year is by hosting events. To make your events have more of an impact on your community you can partner with local charities. Events to consider are:
- Limited-time promotions
- Refer-a-friend programs
If you’re not ready to offer new products or host events, you should at least offer special deals during your off-season. Offering discounts and sales to customers can help keep cash flowing to your business year-round.
2. Keep promoting your business
Staying in touch with your customers throughout the year should be a regular business practice for your team. Some best practices for this include:
- Using social media to interact with customers
- Starting a blog for your business
- Building an email list during your busy season that you can use to communicate during your off-season
- Creating a monthly newsletter to distribute to your customer base
Whichever method you use, you’ll want to create content that your customers can relate to. Stay away from content that’s focused on selling products to customers. You don’t want your customers to feel like you’re only trying to sell products to them. Researching competitor’s social media posts, blogs, and newsletters can be a good way to get a feel for messaging that’s effective. You can also consider these tips for creating social media content for your customers:
- Create messages that your friends would relate to
- Create messages that sound natural, casual, and not forced
- Ask your customers open-ended questions so that they can share their opinions
- Reply to customers comments consistently to make them feel like their voice is heard
3. Watch your cash flow
Overspending in your busy season can have catastrophic results in your off-season. While it can be difficult to predict how much money you’ll need for the off-season, it’s essential you save enough. Without enough savings, you may not be able to afford your utilities, inventory, or other expenses. To avoid this scenario, you can:
Set yearly, quarterly, or even monthly cash flow projections. Cash flow projections estimate how much money will come in and go out of your business for a specific time period. To make these projections, you start with the amount of cash you have at the beginning of the time period you’re estimating. Your starting cash amount is your income minus expenses for that time period. Once you do that, you can then:
- Estimate the amount of cash that will come into your business for the next period
- Estimate the amount of expenses you will pay in the next period
- Subtract your estimated expenses from your estimated income. This will be your projected cash flow.
Calculating cash flow projections can help you make sure you’re on track to save enough for each time period.
4. Reduce your expenses in your off-season
The first way to reduce your business’s off-season expenses is by reducing your inventory. You don’t need to order as much inventory in your off-season. Especially, when you know you’ll have less sales. Some other ways to reduce expenses in your off-season include:
- Adjusting your employees hours
- Cutting back on supplies you use
- Establishing more energy efficient business practices
5. Hire seasonally
For seasonal businesses, hiring for their busiest season can be good for business. This prevents you from having to pay unnecessary workers year-round. For instance, if you own an ice cream shop, you may want to hire more workers for only the summer months. When hiring, you should always advertise temporary positions. This ensures job candidates know they’ll only be hired for a season. Depending on your business type, interns can be another good option to consider. You should always make sure you have workers’ compensation insurance for all workers you hire.
Encourage your seasonal workers to come back to your business for the next busy season. This reduces the amount of training you have to do each year. It can help you save money, time, and energy. If your business is profitable enough, you may want to invest in a year-round manager. They can serve as your assistant and help with your seasonal hiring. You can make it their job to train any new recruits that come your way each season.
6. Find a business partner during your slow-season
Partnering with another business to cross-promote each other can help you turn a larger profit in your slow season. For example, you can offer coupons to each other’s businesses. Essentially, you can send customers to each other.
When you’re looking for a partner, you want to find one that compliments your business. This increases the chances of customers visiting your business from your partner’s business. For example, if you offer hiking and sports equipment, you can partner with a nearby gym. You also want to make sure that the business you partner with shares the same business values as you. For example, you want them to share the same customer service standards as your business. After all, you don’t want customers to go to a business you’re recommending and have a bad experience. That may reflect badly on your business, which is not what you’re hoping for.
7. Improve your existing products and services
The most successful products are those that customers need. They’re also those that adhere to customer expectations. To find areas that your product can improve, ask your customers for feedback. Questions to ask your customers include:
- Did we meet your expectations?
- How likely are you to repeat your business with us?
- What would have made your experience with us better?
- What products of services do you wish we carried?
- Are there any features missing from our current product?
8. Host a sale at the end of your busy season
Sales can help move your excess inventory. It’s important to move extra inventory because you want to make room for new products for your next busy season. You don’t want your inventory to sit on your shelves for the year or have to go into storage. When this happens, you lose money.
9. Look at your hours of operation
Just like a busy season, there are certain times or days that are busier than others. During your slow season, there may be times that you don’t make enough to cover your costs. For example, if you rarely make sales on Monday or Tuesday, you may want to consider closing your business. This allows you to save resources for the days you do make enough profits.
Keep the momentum going
It can be easy to feel locked into the challenges of running your seasonal business. Luckily, there are ways to break free. The key is to anticipate each season and plan accordingly.
Always make sure you are consistently communicating with your customers all year-round. Email marketing can help with that!