Almost every business is affected by seasonal fluctuations, whether it’s orders, revenue, staff, marketing expenses or inventory levels.
While no one can prepare for every possible contingency, there is plenty you can do to mitigate the impact. Here are five ways to develop and sustain a season-proof business.
1. Know your seasonality cycles
The first step is to figure out your business cycles. They may not always be obvious at the outset; it could take a year before you understand the impact of seasonality on your business.
For example, if you run a business in a seaside holiday town then it’s important to understand not only how long the tourist season lasts, but whether there’s any demand from locals in the off-season. This information will help you plan and prepare for both the busier periods and the slower times.
You could also research the business cycles of similar businesses that have been in operation longer to gain greater insights into seasonality.
2. Create alternatives to combat seasonality
Just because your business has a natural peak season doesn’t mean you have to sit around twiddling your thumbs for the rest of the year. Seek alternative income streams that also have seasonal fluctuations to complement your business. The advantages of this strategy are two-fold.
Not only will you be able to maintain a steady stream of income, but you may also be able to keep your best staff around, eliminating hiring and training costs when the next high season rolls around.
3. Plan for the drought
Managing cash flow can be a real challenge if you make the majority of your revenue in just a few months of the year. That’s where being able to forecast well becomes a critical skill that can help get you through the rest of the year.
It can be tempting to spend more freely when the money is flowing in, but you should put away a portion to manage the expenses in the slower months. By forecasting, you can identify when you need to be careful with cash flow and understand how your business is tracking all year round.
4. Use digital helping hands
During the busy periods it’s all hands on deck, so it’s sensible to use digital solutions to make life easier. Small business accounting software like QuickBooks Self-Employed can help you track expenses and invoice customers on the go.
Insightly allows you to manage your customer contacts and projects while Dropbox lets you manage all your files online, and Tiny Scanner can be used to scan documents while out and about.
In addition, you can consult an insights platform such as Google Trends to understand the latest trends and hottest topics. This can be useful in developing ideas that could help bring in new customers.
5. Stay up to date!
During the quieter months there’s plenty you can do to make the busier times even more profitable. Focus your marketing efforts to generate new leads and nurture existing customers.
That way you remain top of mind when the season rolls around again. It’s also a good idea to ensure your employees are up to date with their training and your property is maintained – there will be no time once the rush begins.
While managing seasonality in your business can be challenging, these helpful tips will see you weather the storm and make your business even stronger.
Staying on track of your financial obligations is also vital when it comes to surviving seasonality. One of them is managing your accounting on a regular basis, such as QuickBooks Online.
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