It is inevitable that your small business will experience slow times. Some small business owners see these slow times as setbacks, but with careful preparations, you can turn them into opportunities.
Build a Cash Buffer
A slow time doesn’t stop the bills from rolling in. Therefore, you need a cash buffer to help tide you over until the good times roll around again. If you can manage to save some money when business is good, you can build up that cash buffer. Keep the buffer money separate from your normal business funds; consider putting the extra cash in a savings account so you can earn some interest on the funds.
Manage the Overhead Costs
Even though you can’t do much about fixed costs, you can try to reduce certain variable costs during a slow spell. For example, you can hire contractors or part-time staff during the hectic busy seasons, and only extend their contracts if the busy period continues longer than you expected. If you run a multi-site business, it may be a good idea to temporarily close some of the less profitable sites during slow season so you can reduce utility costs.
Develop a Business Plan
Some small business owners spend all their time working in their business rather than on their business, and they neglect to plan for the next slow time. It is important to understand your business and develop a business plan for it. Take a look at the products and services you offer, and see if you can enter another market during slow seasons. For example, if you run a food truck business in Toronto, you may consider offering catering services during the winter when it’s cold and snowy outside.
Use Slow Time for Care and Maintenance
Slow times are opportunities to work on things in your small business that you don’t have time to deal with during your busy seasons. For example, you can use the free time during slow seasons to clean up, fix, and maintain your equipment so that your small business is ready to go once the busy season arrives. You can also take advantage of the extra free time and use it to evaluate the performance of your business and perhaps revisit your branding.
Work on Marketing
Your competitors may be sitting back and relaxing during the slow season, so it may be a good time to double down on your marketing effort. Stay in touch with your current customers to keep them interested in your products and services, while you continue reach out to prospective customers so that they have you in mind when the peak season comes again. Slow seasons don’t have to be setbacks for small businesses. Use them to your advantage, and position your business in a better place for the next upswing.