For many seasonal businesses, especially those that boom in the summer, the changing of the seasons can bring mixed emotions of relief (less work after a busy season) and the inevitable anxiety that comes with a decreased income – what now?! Seasonal business challenges are definitely no walk in the park…
Don’t fret! There are plenty of ways to keep cash flowing and get on top of your off season market strategy. With a pinch of imagination and a scoop of determination, you can get your seasonal business picking up the pace in the slower seasons. Keep reading for some top tips for seasonal businesses.
What is a seasonal business?
A seasonal business is one that faces drastic differences in cash flow from one time of year to the next. There are plenty of examples of seasonal businesses, such as:
- Holiday retail
- Food truck
- Moving service
- Pool cleaning
It should come as no surprise that experiencing big fluctuations in revenue can result in serious concerns as far as business management goes. The volatility of seasonal businesses also makes it difficult for owners to get approved for small business loans – but not impossible.
With that said, funding odds have improved dramatically for small business owners over recent years largely thanks to the increase in the number of online lenders. In fact, since 2017, both the number of applicants who sought loans through online lenders as well as the number of business loans approved by online lenders have grown by 13%. For Become specifically, financial technology (in the form of LendingScore™) has played an essential role in their efforts to boost fundability for SMBs. Thanks to the power of fintech, business owners can now match with dozens of the country’s top online lenders through the Become marketplace.
No matter which way you slice it, the successful seasonal business owner will be aware of the risks involved ahead of time and prepare accordingly. There are many ways to handle big fluctuations in revenue. Before we get to that, let’s discuss just how sustainable seasonal businesses are.
Are seasonal businesses sustainable?
The short answer is: yes, seasonal businesses are sustainable. Otherwise, they wouldn’t exist! But it is, of course, more complicated than that. Some businesses that experience drastic ups and downs in cash flow throughout the year have an easier time handling it than others.
But why do seasonal changes make such a difference to business operations?
A report by the Small Business Institute Journal found that the periods between high seasons and low seasons are actually shorter than the seasons themselves. In other words, seasonal business owners don’t have much time to change to compensate for the increase (or decrease) in cash flow. That can spell double-trouble for season-specific businesses, especially when considering the next point.
14% of businesses experience a year-round peak in sales over a period of just 4 weeks. With such profound imbalances, what can businesses do to survive the other 11 months of the year? Click To Tweet
Another obstacle that seasonal businesses face is how concentrated the peak season is for them. The same report mentioned above found that roughly 14% of businesses experience a year-round peak in sales over a period of just 4 weeks. With such profound imbalances, what can businesses do to survive the other 11 months of the year?
5 ways to survive business seasonality
1. Extend the season
We aren’t talking about playing god and trying to make the sun shine longer, but there are ways to extend your operating season, though of course, it depends on your business. If for example, you’re a landscape designer, you could consider offering retainer packages rather than charging per project. You could agree to check in every now, offer upkeep services and so on, despite the majority of work being in the summer to help get a more consistent cash flow.
Any seasonal business could also get ahead of the competition by simply offering services a little sooner than the busy season or even continuing a little later. If most of your services (or products) do better over the summer, you should up your seasonal marketing strategy during the months leading up to summer and you could even lower the rates giving a ‘Spring Discount’ for earlier (or later – ‘Autumn Discount’) in the year. This will allow you to lock clients early, or later.
Think outside the box – one example could be to switch things up. For example, if you own a bikes store, you’ll know too well that the Spring and Summer months are booming with Winter and Fall dragging behind. You could consider switching up your products and selling wintery equipment too such as skis, sleds, ice-skates for example. Both are sporty and will keep you going all year-round.
2. Build an off season marketing strategy
An off season marketing strategy is key to help you capitalize on the off-seasons! There are many ways you can go about this, and it all comes down to your business and industry, here we’ll focus on a few general, all-rounder strategies.
- Invest in an email seasonal marketing strategy – you want to remind your customers that you’re still there, offering advice, discounts and more but without being too spammy.
- Create irresistible low-season packages – if you’re a hotel owner you could give some great off-season packages and with a simple change of words, the rainy season could become ‘the green-season’. It’s amazing what a small word change can do.
- Grow your database while the season is still hot – while you’re business is busy during the summer (quick, it’s not over yet), make sure you’re gathering data on your customers, we’re talking emails and phone numbers at the very least.
- Make your website user-friendly with many calls-to-action (if you don’t have a website, you should).
- Gather customer reviews – follow up on customers asking them for a short review of your services/product.
- Create content and keep the hype going – this will remind your customers who you are, give them useful information, and with the right SEO and social media marketing, attract new ones when the busy season returns.
3. Stay social
Now that you’ve thought about your seasonal marketing strategy, you should make sure to spread this to your social media marketing strategy. It may feel like your customers have vanished into thin air as the season slows down, but believe it or not, they’re still out there!
It’s extremely important to keep in contact with your existing leads and generate new ones throughout the year, and what better way than social media? Your customers are sure to be in cyberspace no matter the time of year.
If you aren’t social media savvy, consider doing a quick course so that you can leverage the power of Facebook, Twitter, LinkedIn, Instagram and so on. This is a great place to post your reviews to gain more trust, offer discounts, share what you’re up to in the year, ask your audience questions and keep your audience interested.
4. Get on top of your finances
We’re sure you don’t need reminding, but seasonal business challenges involve slow periods where funds can get pretty tight. It may seem strange, but the best time to apply for business loans or more specifically, line of credit is when you don’t need it.
When you’re business is profitable and your finances are looking good, you’ll be able to attract the eyes of lenders and seal better deals with them. You can think of them as insurance for your business providing a lifeline, should you ever need it.
It’s always best to get one of these before you need it but why? This is because you’ll need to prove to lenders that you have a healthy cash flow to get one in the first place, something that is unlikely during the slow season. With a line of credit you’ll only ever pay interest on the money that you draw, which makes it a great solution to help even out cash flow and provide you with funds in times of need.
Note: the type of business you have will affect the type of industry loans a business needs, as well as the specific circumstances that that business finds itself in. Be sure to weigh your options carefully when choosing the right funding solution for your business.
Where can I get a line of credit for my seasonal business?
Become uses financial technology to provide SMBs with tailored funding solutions in the simplest way possible, including lines of credit. It’s two-folded solution not only matches businesses with ideal lenders but is the first of its kind to increase funding potential for each business! The service is free, so you could get loan and line of credit offers with no obligation to accept.
5. Stay active and positive
Unless you seriously cannot operate off-season, perhaps if you’re selling Halloween decorations or Christmas trees you may have an excuse, it’s important to stay positive, and active with your clients while working to gain new ones as well. Set goals including finding ways to spread your products and services around the slower seasons with all of the tips we’ve given here and you will find that when there’s a will there’s certainly a way.
On the plus side, you can use this downtime as a great window to plan, get on top of your finances and focus on the bigger picture.
We hope you found these tips for seasonal businesses helpful, let us know in the comments below if you have any questions or other suggestions!