If you own and run a small business, you know being “busy” can be a very good thing, if busy means demand is strong, and you and your team are being productive and meeting customer needs. Then it only serves to follow that if busy is good, then being very busy is even better, right? It can be. If there is a minimal variance in the amount of business you do seasonally, it is relatively easy to predict, budget and plan. But if you operate a business that has wild fluctuations in revenue depending on the time of year, being very busy can be a real challenge.
According to Sarah Kingsland, co-owner of Junkluggers of Baltimore, a junk removal company, “After the holiday season is when things slow down. We say that people tend to go into “hibernation” when it gets cold. Our business’s highs and lows follow closely to the real estate market.”
Kingsland and her husband and partner Brian Thurston, Junklugger’s Chief Lugging Officer, have a strategy, “Our approach to seasonality from a sales standpoint, is to budget accordingly throughout the year. Mapping out our sales goals for each month allows us to better handle those typically lower revenue months and work harder to capture that revenue when the demand is higher. From a marketing standpoint, we maintain our digital marketing efforts, and focus on increasing our guerrilla marketing efforts through door hangers and yard signs. Anything to stay top of mind and in front of people’s faces so they remember us when they need us.” Kingsland says,” we capture money when we can in the busy months and operate as lean as possible when we hit the slower months.”
Some other industries historically challenged by seasonality include:
- Landscaping businesses
- General contracting
- Holiday related
Running this kind of seasonal business comes with a distinct set of challenges and opportunities. A collection of expert tips from around the web:
Plan. Write up the business plan by season, make judgments about inventory, marketing, staffing by traditional volume. Seek to expand the high season with promotional activity. Analyze your suppliers’ seasonality and find common ground.
Manage Cash Flow. Identify those months where there will be more money going out in business development than is coming in as revenue, budget for those shortfalls with windfalls in the stronger seasons.
Innovate. Assess your business and imagine how you could add something new to your offerings that you could do well and might serve you in the off months. Explore how you could barter or co-market services to expand your network and value proposition to new and old clients.
Market Spend Realistically. Allocate your marketing dollars where and when they get the best return.
Build Your Network and Awareness. Use your professional networks, past customers and friends and partners in the off season and “invest” time and energy in your relationships. Commit to an aggressive organic (unpaid) social media presence, collect the content for your off-season communications campaign during the heavy season, e.g., photographs, video and other testimonials, blog posts, industry news. Find people who can refer customers to you, and that you can refer business to you and explore partnerships.
Learn. Do your homework. Study your customers, study the marketplace. Engage your staff. Use the data you already own to understand who they are, where they live, how did they choose you. Understand the reasons these customers chose you.
Take Care of your Team
The ups and downs of a seasonal business can be very stressful for your staff, slower times may heighten their concerns about keeping the job and get them looking elsewhere for employment. Show them a culture of caring and teamwork. Show them they are valuable in the slow times and that you will get help when times are busy so that you can continue to maintain your standards of professional service without burnout. Make sure they feel valued with recognition and benefits like retirement savings programs, professional development, and PTO. Provide them meaningful ways to contribute when business is slow—such as compensation for business development, social media networking and customer relationship management.
In a recent article in Forbes, and expert panel was convened on this subject and the group identified 14 strategies to help a seasonal business avoid a “sales slump.”
Here are the 14 strategies suggested by the Forbes expert panel:
1. Ensure A Positive Operational Cash Flow
2. Carefully Manage Cash Cycle
3. Continue Pursuing New Clients
4. Increase Marketing Efforts in The New Year
5. Work Closely with Vendors and Look For Cost Savings Through Technology
6. Diversify Your Products or Services
7. Break Up Large Expenditures and Save A Portion Of Seasonal Revenues
8. Focus On Long-Term Planning
9. Be Prepared Financially and Mentally
10. Increase Your Brand Visibility Online
11. Secure Access to Working Capital
12. Expand Into New Markets
13. Overestimate Necessary Reserves
14. Be Smart with Cash in Q4
You can see the entire article here( opens in a new window ).
High seasons can make for high profits, but also high stress on your team and business. Plan not only to maintain your key staff in low seasons, but to also maintain their connection to your business success, and the culture of quality and service that is the bedrock of your company.