Seasonality is an often overlooked aspect of business for budding entrepreneurs, yet one that is a very large threat to success if not adequately managed. To help manage this, here are some of our favourite tips to help you manage the unique challenge of seasonality.
Know your industry
This sounds obvious, but it’s surprising how often this step is neglected by small business owners. Knowing the industry your business operates in is absolutely essential to dealing with the challenges that seasonality brings. Understanding the natural peaks and dips in each industry allows business owners to predict sales whilst having various flow-on effects such as ordering costs and stock control.
Consider alternate revenue streams
Unfortunately, in certain industries, seasonality is inevitable and as such, there could be sustained periods of time with little to no income. In these instances, consider how you can alter your resources during off-periods to create additional revenue streams. For example, a restaurant heavily reliant on tourists during summer months could potentially provide catering services during the colder, quieter periods. For business owners inexperienced in certain facets of running a business, this flexible approach can simplify certain aspects such as stock control which can fluctuate less when repurposed. One thing to keep in mind with alternate revenue streams is to not let this detract from your main business.
Don’t neglect your customers during the off-season
Often, customers can be just as accessible before peak periods as they are during. Be methodical in your marketing efforts and use quiet periods to get the edge on your competition. Email marketing, social media marketing and website updates can be incredibly useful ways to let customers know what you are up to and how you can help them whilst simultaneously turning one-off customers into repeat customers.
Hire according to demand
Whilst many business owners want to hire and provide stable employment for our workers, unfortunately sometimes contractual or casual work is unavoidable. Part-time employees can be a valuable asset in the numerous industries that are majorly affected by seasonality.
A great example of an industry that deals with seasonality well is orchardists. Fixed-term, casual and part-time workers are used to great effect to pick during the in season and is widely renowned in New Zealand as a great option for students and tourists looking to pick up a bit of extra cash.
Plan, Plan, Plan
“Measure twice, cut once” is a famous adage that can be applied to the businesses affected by seasonality. Put simply, know how busy your good season is and how quiet your off-peak season is. One way to do this is by analysing the previous two to three years of financial reports, which can provide an insight into what to expect. For new businesses, what are the industry norms?
Consider all the elements of your business when planning ahead. Staff costs, stock control, inventory space, assets and cash reserves are just some of the aspects that should be known and accounted for in order to make sure you are not left with any nasty surprises come the off-peak period.
So there you have it! With these five tips, you will be well-placed to deal with the challenging issue of seasonality and can look ahead to the future with confidence and optimism.