Three tips for business owners to get through the slow season(Read article summary)
Owners of seasonal businesses have to be particularly careful about planning and budgeting for the year to ensure the survival of their business.
Kaitlin McKeown/The Herald-Sun/AP/File
If you own a seasonal business, you know how tough it can be to get through your business’s low season. Owners of seasonal businesses have to be particularly careful about planning and budgeting for the year to ensure their business’s survival. Below, we offer a few tips and tricks for making the most of your business’s off season.
Manage your inventory during your busy season
Once your busy season ends, you don’t want to be stuck with excess inventory that you can’t sell during your off-season. Ordering the right amount of inventory during your busy season will help you manage it better during your off-season. Look at your sales history from the last few years to see what you’ve typically sold during your busy season. Factor in any expected growth for the year and purchase your inventory accordingly.
Have a financial safety net for the off-season
When sales are less predictable in the off-season, it make sense to have a financial safety net in case of emergencies. This means managing your cash flow carefully during your busy season in preparation for the off-season n and managing your off-season expenses. You can lower low season expenses by reducing business hours or staffing, cutting back on marketing or advertising spending and renegotiating contracts with your suppliers.
You may also want to take out a line of credit to help with any working capital needs, such as accounts payable or wages, or for any emergencies. You shouldn’t rely heavily on a line of credit or loan during your off-season (as you should be managing your expenses), but they can be nice to have in the event that you truly need them.
Broaden or reinvent your current season
Reinventing your current seasonal sales cycle can turn your business into a business with strong year-round sales, alleviating the struggle of staying afloat off-season. There are a few different ways you can broaden your current season. First, you can extend your season by selling early or having sales at the end of the season. For instance, if you sell Christmas trees, you could purchase inventory early and begin selling trees in October instead of November. If you have leftover inventory after Christmas, you could offer discounts on any trees sold into January.
The second way to broaden your season is to go where your season is. Let’s say you sell winter coats and apparel in the United States, and your busy season is typically October through February. If you set up an online store and ship internationally, you could take advantage of the winter months from May to September in the southern hemisphere, gaining new customers and sales cycle in countries like Australia and New Zealand.
A third way to broaden your season is to offer complementary or special edition products for the off-season. If you own an ice cream shop, you could sell seasonal flavors, such as pumpkin or peppermint, during the winter months when sales are lower. If you own a landscaping business, you could offer services to install Christmas lights during the winter or offer snow-blowing services.
This story originally appeared on ValuePenguin.