2018-05-31 08:25:40Business DevelopmentEnglishSlow seasons are an inevitability of seasonal businesses. But, instead of dreading the slow season, business owners can proactively prepare...https://quickbooks.intuit.com/r/us_qrc/uploads/2018/05/How-to-Prepare-Your-Business-for-the-Slow-Season_featured.jpghttps://quickbooks.intuit.com/r/business-development/prepare-business-slow-season/How to Prepare Your Business for the Slow Season

How to Prepare Your Business for the Slow Season

6 min read

If you operate a seasonal business, the slow season is always around the corner.

The slow season means less customers and less revenue. You may be tempted to react to the slow season with a panicked rush to find new business.

Before you do, remember, you knew the slow season was coming. You have the Seasonal Business Preparation Guide & Checklist. As the slow season approaches, prepare with four goals in mind:

Stick to the Plan

The slow season should not take you by surprise. It happens every year. You should prepare for your slow season just as you prepare for the busy season.

Your slow season plan must account for less customers, and less revenue. Don’t base your slowest season’s plans on your busiest season’s results. Doing so doesn’t reflect reality. It won’t take long for this type of planning to cause serious problems for your business. Such as cost overruns and inventory surpluses

Your plan should anticipate seasonal fluctuations and adjust accordingly. If revenue is lower, you will need to cut costs. Potential areas for seasonal cost savings include:

  • Fewer operating hours
  • Reduced workforce
  • Fewer or smaller inventory buys

In addition to cutting costs, consider where you can leverage existing assets and sunk costs. Potential methods to leverage assets include:

  • Selling off excess or aging inventory at a discount
  • Securing a line of credit against inventory, equipment, and property
  • Renting unused equipment to other businesses

Take Advantage of the Slow Season

During the busy season, do you find yourself wishing for more time? The slow season is the one period of year when you might find some. As you get close to the slow season, prepare yourself to take advantage of the time it provides.

Plan to Plan

The slow season is a great time to develop roadmaps for your business. But, before you can develop plans, you need to determine what aspects of your business need attention.

An obvious candidate is planning for the busy season. Just like the slow season, the busy season is always just around the corner.

How can you best prepare your business for the uptick in customers, transactions, complaints, and everything else that comes with the busy season? Be prepared to plan for these busy season realities as the slow season arrives.

The busy season isn’t the only area of your business that needs planning. There are some common areas that often go overlooked as you grow your business:

  • Employee benefit packages
  • Updated business plans
  • Marketing strategies
  • Organizational roadmaps

Areas that deserve your attention vary depending on your business’ industry, maturity, growth, and other unique factors. The best way to prepare for your slow season planning is to select the areas of your business that deserve your attention.

Administrative Tasks

In addition to planning, the slow season allows you some breathing room to complete some administrative tasks that take a backseat during the busy season.

Before the slow season begins, identify administrative tasks that need your attention.

Your administrative tasks will vary depending on the nature and stage of your business. But, there are some common administrative tasks that many business owners avoid during the busy season because they are either too time consuming or boring:

  • Tax strategy
  • Staff growth and outsourcing needs
  • Internal policies and procedures development

Before you enter the slow season, have some administrative tasks identified. Whether you have neglected these tasks in the past, or you simply need a good chunk of time to get these tasks completed, be ready to knock them out when the slow season provides time.

Get Ready for the Busy Season

Once the busy season arrives, it’s too late to prepare for it. The slow season is a perfect time to ensure that you make the preparations and adjustments needed to hit the ground running when the busy season comes back around.

Train Employees

All employees benefit from training, but finding time to train isn’t easy. The slow season gives you the opportunity to train all of your employees, from new hires to seasoned professionals. During the slow season, you have the time to offer training options that meet your employees’ needs.

Your newer employees may need some basic onboarding training. Your more seasoned employees likely need more advanced training to improve their skills.

Identify the training needed across your workforce, and plan that training before the slow season hits. Don’t wait for the slow season to arrive before you develop a training strategy. This will lead to at best an inefficient use of time, or worse, ineffective training.

Inventory Strategy

The slow season is a good time to dive into your inventory strategy. The goal of an effective inventory strategy is to identify the most effective and profitable inventory method for your business.

While the slow season is the time to conduct the inventory analysis, you must develop a plan beforehand that will serve as your roadmap to execute the inventory analysis.

There are some common metrics and processes to consider when reviewing your inventory practices:

  • Inventory turns
  • Average shipping time
  • Cost of inventory
  • Volume discounts
  • Fill rate
  • Shipping accuracy

The list above is a starting point for analyzing your inventory practices. Before the slow season arrives, determine which metrics make sense to review when the slow season gives you a window of time to do so.

During the busy season, track the metrics applicable to your inventory strategy to ensure you are ready to execute your review when the slow season arrives.

An effective inventory strategy will be unique to your business. The key is to uncover which metrics are most impactful to your business and prepare to review those metrics during the slow season.

Learn and Relearn

Perhaps the best rule of thumb when preparing for the slow season is to remember what you did to prepare for the last slow season.

Did you stick to the plan? Did you take advantage of the slow season? Did you utilize the slow season to prepare for the busy season?

In answering these questions, repeat successful behaviors and identify your opportunities to improve.

Adjust the Plan

Did your plan allow for enough cash on hand to get you through the slow season? Did you cut enough costs during the last slow season to ensure you could continue paying your expenses when revenue was lower?

If the answer to either one of these questions was “no”, you need to adjust your plan in preparation for the next slow season. You may need to increase your cash reserves, or you may want to cut more costs to comfortably make it through the slow season.

Evaluate you inventory strategy. Did you use the slow season to make a large inventory buy, or did you trim inventory to prepare for the slow season? Did your inventory strategy work? If your slow season inventory strategy worked, how can you refine it further to build on your success? If it didn’t work, try taking the alternative approach moving into the coming slow season.

It always helps to remember, you have been through this before. Can you execute better this time around?

Hold Yourself Accountable

Mike Tyson famously said, “everyone has a plan until they get punched in the mouth.” You can plan for the slow season with the best intentions. In reality, the slow season will always feel like somewhat of a punch in the mouth.

Slow seasons are tough. Cutting costs. Reducing operating hours. Trimming your workforce. Slow season preparations are never fun. But, don’t ignore their reality.

Set goals in preparation for the slow season, but keep realistic expectations. Don’t expect a slow season to propel your business to greatness. Do the best you can. Weather the storm. And be ready to crush the busy season when it comes back around.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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