Proper planning and implementing best practices can help relieve stress due to the seasonality of our industry. From ice-cream stands and landscapers to hotels and feed stores, many small businesses are seasonal — meaning they don’t rake in much cash for some portion of the year. While making seasonality work in a business isn’t typically easy, there are ways to alleviate some of the stress.
“Measure twice, cut once” is an old adage that still rings true, especially for a small business. Look ahead at least six months to plan appropriately. To carry the business through slower periods and complete lulls, consider saving cash during the busy months. Look hard at every element, from inventory to staffing, to avoid tying up cash unnecessarily during slow months. And, don’t forget to take advantage of slow stretches to prepare for the peak season.
One issue for many seasonal businesses is that they lose visibility in the off-season. So part of the challenge is keeping customers connected, and using downtime as a time to regroup, re-evaluate the business plan and expand customer relations.
Many businesses choose to stay open year-round by switching their focus to a different niche. Many ski shops, for instance, sell bicycling gear or kayaks in the summer. Not only does this supplement revenue, but it also hedges the risk since mild winters may inspire people to ride bikes. Other seasonal entrepreneurs start a new business altogether in the off months. Nancy Swenson and Craig White, owners of Beach Farm Inn, a Wells, Maine, bed-and-breakfast, earn 75 percent of the $75,000 to $100,000 of the inn’s annual revenue between the Fourth of July and Labor Day. A rainy summer, Ms. Swenson says, can take a sizable bite out of revenue. While the couple offers various off-season promotions (like cooking-class weekends) to rev up the inn’s guest numbers, they’ve started another venture in the winter months. Mr. White turned a woodworking hobby into a business making wooden furniture. He now makes $30,000 to $40,000 between December and March selling his handmade furniture — or nearly half of the total revenue generated annually by the inn. He uses the inn to help market the furniture, since the rooms are furnished with many of his crafts. “There are years where the weather is terrible or things happen in the world that you just can’t control,” Mr. White says. “Having that extra income…acts as a buffer.”
Some seasonal businesses are able to extend their season by finding creative ways to get customers interested in their offerings year-round.
Wayne Bronner, owner of Bronner’s Christmas Wonderland, a Frankenmuth, Michigan, Christmas decor store with 260 year-round employees, finds he can keep visitors buying Christmas goods all year by tying promotions and marketing to timely holidays and seasons throughout the year. In the days leading up to Mother’s Day, for instance, he decks out the front of the store with ornaments displaying messages for mothers. In summer, the store plays up wedding-inspired gifts, such as Bronner’s Newlywed’s Ornament Collection, a gift set of 12 ornaments for newly married couples that sells for $67.99.
He also offers sales and discounts in the off-season to spur more sales. For Valentines Day, he has a “14-14” sale — 14% off any item that costs more than $14. The store uses quirky advertising on billboards to attract summer travelers who might be looking for a fun stopover. The store “markets the novelty of shopping for Christmas decorations in July,” Mr. Bronner says.
Seasonality doesn’t have to mean no cash or nothing to do. In fact, if you look at it as a time to turn up your workload it can mean new products. HEAT is a perfect BioZyme® example. Historically in June and July our sales would drop to about 20 percent from normal. HEAT has almost gotten those months right up with all the others.
Go get ‘em tigers!