Some small businesses owners live for “Black Friday” in November, the time when holiday shopping shifts into high gear. Others count the weeks to Memorial Day, when the promise of summer will have families and other vacationers on the go.
Small businesses dependent on seasonal sales cycles know well the implications of their inherent “feast or famine” environment.
The high times, though hectic, are also highly profitable. Slow periods, however, can compound the stress of surviving until the next sales uptick. But these businesses also have the advantage of planning ahead to better manage the good and not-so-good sides of the cycle.
As finances are critical any time of the year, a conservative approach to budgeting will provide an extra measure of safety in the event your busy season results fall short of expectations. Create a special cash reserve account dedicated for off-season expenses, and make minimum contributions on a weekly basis. (If you can contribute more, all the better.) Many banks offer automatic transfers between accounts to do this function for you. It may also be helpful to have a financial plan in place for a “worst-case” scenario.
If you do see the need for additional financing to bridge off-season cash flow fall-offs, consider CAPLines, a special SBA-backed short-term loan program designed to help qualified small businesses meet short-term and cyclical working capital needs such as financing specific contracts, purchasing inventory, property construction or rehabilitation, and short-term working capital. Details on CAPLine programs are available at http://www.sba.gov/content/caplines.
Seasonal business owners also typically expect to make up for the long hours when the sales cycle wanes. But don’t allow these stresses to take a toll on your physical and mental health. Hiring temporary workers is a good way to avoid burnout and ensure top-quality customer service. Also have a plan for managing your time as things wind down, and to ramp up in advance of the next cycle.
And though seasons come and go, don’t assume your customers will too. Keep in touch with them throughout the year with well-timed e-mail newsletters or ads, or a blog. They may not be ready to buy December holiday gifts in May or make beach restaurant reservations in November, but keeping them abreast of new product or menu offerings, facility improvements, or just a note to say hi will keep your business uppermost in their minds when it is time to spend seasonal dollars.
To learn more about operating a seasonal business, contact Raleigh SCORE. We provide free, confidential business mentoring and training workshops to small business owners. To schedule a free appointment with our experienced counselors, go to http://raleigh.score.org, or call us at 919-856-4739.