Some small business owners walk around all year with an invisible cloud overhead. Unlike other entrepreneurs, these brave people own seasonal business ventures that see a surge of demand one season, and a relatively bone-dry lead list the rest of the year.
If you’re in a seasonal industry, you know the feeling. There’s a small window of time to earn the amount that’ll sustain you all year. Here’s how to keep your head above water — both when your inbox is flooded with requests, and when you hear nothing but crickets.
1. Cut Expenses During the Slump
When things slow down and you can catch your breath, it’s tempting to loosen your grip on finances. Instead, transfer your mindset from making money to saving money. For example, give your accountant a break and administer your own accounting to cut expenses. Reevaluate vendor contracts, like your outsourced social media work or email newsletter automation.
Year-round companies need constant service, so to them, the pricey annual payments make sense. Seasonal businesses like yours, on the other hand, may save more by opting for shorter, month-to-month options. Handling these tasks is extra work, sure, but when you manage them during the slow months, you’ll always be aware of how much value each service really adds.
2. Save, Save, Save
Cutting costs is great, but you’ll still have off-season business expenses. Plan early — even before the busy season hits — so you won’t have to calculate your savings rate when the phone is ringing off the hook. Act decisively by determining the exact amount you need to save before the surge. Here’s how:
- Set your minimum. At very least, plan to save your gross burn rate. What are your average expenditures throughout the last year?
- Forecast the next year’s expenditures. Be conservative by including a cushion for surprise costs and occasional slow days. Include potential investments if you want to upgrade. This number is your savings goal.
- Establish how long it’ll take you to raise more capital if needed. Leveraging a bank loan or tapping investors takes time, and this contingency counts.
- Use the resultant numbers to compute how much you should keep in reserves. Experts at nonprofit SCORE recommend calculating the time-to-borrow against your projected expenditures. If you’ll need a month to raise capital, then you should keep a month of projected expenditures liquid.
Setting aside both your projected needs and your contingency fund ensures that your small business is ready for the expected slow time as well as unanticipated setbacks.
3. Run an Off-Season Sale
Get creative with your down time. Wedding photographers can offer to photograph families for holiday cards long after the busy spring and summer wedding season has come and gone, and engagement shoots are year-round affair. Landscapers can hang holiday lights and cater to interior landscaping for businesses and organization — or go all-out and relocate for a couple months to another locale with a completely different climate. The possibilities are endless for cross-seasonal sales and side gigs, limited only by your own imagination.
4. Stay Plugged In
When your enterprise is hustling and bustling, you’ll have no problem engaging with clients, collaborating with teammates and jumping into online industry conversations. But when all goes quiet, you shouldn’t follow suit. Instead, ping colleagues with relevant headlines, send seasonal employees personal cards and become an online thought leader by encouraging other seasonal business owners who may need a shot of motivation.
The U.S. Small Business Administration lists a few pros and cons of starting and operating a business that relies on the changing seasons. Check your passion against the realities of a seasonal business so you can decide whether this adventurous route is for you. Ski instructors, sustainable farmers, academic tutors, festival planners, income tax specialists and travel agents are all sources of inspiration. If they can do it, so can you.