Surviving The Quiet Periods Of A Seasonal Business
It’s great to be in business for yourself, right? You can set your own hours, take holidays whenever you like, and work with an unprecedented level of freedom and flexibility that is second to none. Of course, it’s not always sunshine and roses; with pros, come cons. A potential downside to working for yourself can be cash flow issues during those loooooong quiet periods. If your business tends to boom seasonally, don’t stress! There are ways you can ensure you have money for the whole year. All it takes is a bit of planning.
Here are some tips to ensure you keep you head above the water, and your bank balance above the red line, during quiet periods.
Set A Budget
The FIRST thing you should do is to create a budget and a cash flow forecast. When you know your numbers, you know where you stand. To create a budget, record all of your incomings and outgoings so you can see at any given time what is leftover. Also, put together a forecast document, which details the guaranteed income you know is coming in, as well as adding a section for your predicted income.
You will then be able to see if the earnings you make (or predict to make, based on your research and history) during your high season will cover you for the quieter periods of the year. If your findings indicate that you will be quiet and low on cash, you can work towards filling the quiet period with other things.
Consider Your Staffing
If you cannot handle the workload during your high season then you will want to employ staff to help you out. But before you undertake this process, explore the employment options. Will you have enough work for this person to do all year round? Or is it better to employ someone on a fixed term contract, or even a casual contractor.
Don’t invest in a full-time wage if you don’t need full time help all year round. You may even consider outsourcing certain aspects of your business. During your busy period you want to maximise your earnings and focus on the work that brings in the revenue. So, you don’t necessarily want to be wasting time crunching numbers. Outsourcing certain business admin tasks to an accountant (like us) or a virtual assistant will free up your time so you have more hours to spend on your core business.
If you know that your business booms at a certain time of the year, then be ready to hit the ground running when that time comes. Complete all of your busy work in your quiet periods to ensure you can efficiently handle the influx of work.
That means tidying your office, having your stock on hand organised and ready to sell, having your filing up to date, having robust systems in place, having your staff on deck (and fully trained), and having your marketing nailed. Don’t waste your time where you could be making money doing these things. Complete them well ahead of the rush period so you can capitalise on this profitable time.
Offer A Complementary Product or Service
You will always have your core business, but you may consider offering a complementary product or service during your off season. For example, if you run a business that sells ice-cream in summertime, you might decide to serve hot chocolate and coffee in winter. It may still be considered a quiet period, but you will have some money coming in.
Do Your Marketing Early
Set your marketing campaigns to run just before your busy period. Then your target market will be informed of your product or service and be ready to buy. You won’t have any downtime, as they will be on your doorstep ready to go when the season starts.
We also suggest remaining in touch with your customers during your quiet time. Just because they aren’t buying from you now does not mean they won’t do so again when your high season kicks off. Use the down time to maintain a good relationship with them and to keep your business fresh in their minds.
Offer Off-Peak Bonuses
Give your customers an incentive to buy from you during the quiet times. Offer discount coupons, or a free gift with purchase that can only be used during your offseason. You could also offer early bird discounts for those that want to pre-book. Just be mindful that the deals you offer don’t cut into your profits too much. There is a fine line between quality and quantity.
Not all businesses are your competitors; some can be your allies. Teaming up with another complementary business can be good for both of you. Just make sure that their busy period does not conflict with yours. Try and align yourself with a brand that is busy when you are quiet, and quiet when you are busy. That way you can boost each other up.
It can be as easy as offering vouchers or referrals to each other during quiet periods or stocking some of each other’s products and taking a commission. You could also offer consulting services to other businesses in your industry to help them up skill.
Just because your business is booming one minute and is quiet the next does not mean you should be out of pocket. As you can see, there are lots of ways to combat the slumps of a seasonal business. If you need help putting together a plan for getting through those quiet periods, then don’t hesitate to get in touch with us here at Accountants Plus. We have plenty of expert knowledge around finance and budgeting, and can provide informed business advice to get you on your way to a more balanced and profitable year.