There are thousands of seasonal businesses operating in the country, including those focused on Halloween, Christmas, fireworks, food trucks, sports, lawn care, and more. These businesses are important to local economies because they provide a crucial service, support communities, and offer part-time employment.
Unfortunately, such businesses can be vulnerable during their offseason and many close every year. However, studies suggest that those with sustainable business models easily keep their doors open for at least five years.
While different types of seasonal businesses offer different services, they can all adopt a few common strategies to improve their business model. Here are a few tips that can help a seasonal business thrive:
1. Get the Financing in Order
A seasonal business must maintain healthy cash flow to take advantage of the peak season. Unfortunately, lines of credit from traditional sources can be difficult to obtain for a small enterprise that hasn’t been operational for over a decade or doesn’t boast high revenues.
That’s why many fresh seasonal businesses utilize alternative funding options that have lower restrictions and specialize in providing short term financing. In a pinch, many seasonal businesses turn to reputable online funders like sharpshooterfunding.com where they can get quick access to cash at transparent rates.
Such short-term business loans are ideal in the offseason when money is needed to pay debts or to take advantage of business opportunities that can improve the long-term cash flow position.
2. Manage Offseason Expenses
Seasonal businesses need to have a clear understanding of their expenses and cash flow, especially in the offseason. A good strategy is to lease extra equipment in time for peak sales, rather than buy it. Not only can unused equipment be costly to maintain throughout the year, but it can be expensive to store. It can also become obsolete overnight.
3. Diversify Income Streams
After a particularly fruitful peak season, many seasonal businesses make the mistake of growing complacent during the rest of the year. Business is unpredictable, and unforeseen expenses can dent any seasonal business.
Alternatively, seasonal businesses can sell excess equipment and merchandise during the offseason at a small loss to generate funds.
It’s a good idea to diversify income streams, even if the profit margin is thinner. For example, a snow removal company can provide lawn care services in the other three seasons. Not only does diversification improve profitability but it can help lower employee turnover.
For example, the same snow removal company can retrain its valuable employees to provide lawn care services. Keeping the same employees throughout the year can result in significant savings. After all, hiring and training new employees every year costs time and money.
4. Use Their Time Better
Aside from diversifying their income streams, seasonal businesses can also use the offseason to strategize and set new profit targets. They can invest further in goods and services that were successful and draw valuable resources away from low performing ones.
The offseason can also be a good time to train and hire future employees.
Although managing a seasonal business can be tricky, companies that strategize for the future and have good cash flow can easily thrive in the long term.