How to Prepare Your Seasonal Business For the Slower Months

Jan 3, 2022 | 0 comments

Businessman stands before a slide presentation screen pointing to a business forecast chart in a dark room with at least 3 employees.

To stay operational and profitable as a seasonal business owner, you don’t just need to capitalize on your busy time—you also need to survive the slower months. If you’re not prepared for downtime, you can lose cash flow, customers, and momentum. 

Fortunately, there are practical ways to set your business up for success. Here are six steps to take to prepare for your slow season: 

 

1. Organize your finances

Understanding your business’s financial situation is key to keeping your operation alive when cash is tight. When you have a clear picture of your cash flow, annual sales forecast, and expenses, you can create a more realistic budget and allocate your spending to the right expenditures. It’s a good idea to meet with your business accountant to go over the following areas:

  • Cash flow: Create a cash flow forecast to figure out how much money you have to work with during your slow season. 
  • Expenses: Make a list of your fixed expenses and variable expenses to see what you need to save—and where you could potentially cut costs. You want to ensure you have enough cash to cover your rent, business website, debt obligations, payroll, and equipment maintenance. 
  • Sales or revenue forecast: Based on your data from last year, estimate how much revenue you can generate during the slow period. 
  • Financing: Consider whether or not you need financing. You might need a line of credit to help cover ongoing operating expenses, for example, or a term loan to buy inventory in bulk before your busy season ramps up again. 

2. Get rid of extra inventory

The inventory you carry during your business’s high season can quickly become a burden come the slow season. Depending on the products or services you offer, excess inventory either means wasted revenue potential or extra storage costs—and sometimes both. 

Offloading extra inventory gives you the chance to earn money on slow-moving stock, make the most of products with a short lifespan, and save on storage fees and future marketing expenses. Here are a few ways to get rid of inventory ahead of a slow period:

  • Create promotions: Selling items for a discount or limited time only can help you reduce inventory fast. 
  • Bundle products: Pair slower-moving stock with one or two customer favorites, and sell the package for a slightly higher price. 
  • Re-market inventory: See if you can alter your products slightly, or market them to a different group of customers. 
  • Return inventory to a supplier: Reach out to your supplier to ask if they’ll let you exchange or return unsold inventory. 
  • Sell inventory to another business: Depending on the type of inventory you carry, you may be able to sell extra materials, parts, or products to another business at a discounted rate. 
  • Donate your inventory: Consider the value of giving away your inventory versus paying to store it. You could donate products or supplies to a nonprofit organization, a local school or shelter, or a small business that needs a boost. 

3. Brainstorm off-season revenue streams

If you can find a way to keep the cash coming in when demand is lower, you might save yourself stress during the slow season. First, consider your business model, financial goals, and bandwidth. If you have the time and resources to add another revenue stream to your business, then you can start brainstorming possibilities. Here are just a few options:

  • Turn your service into a product: Putting out a valuable product can help satisfy customers and net you a bit of extra cash. If you run a business that provides ski lessons, for example, you could create and sell an online workout guide with videos and tips to keep skiers in shape during the off-season. 
  • Experiment with a subscription model: You can bring in extra cash by giving your customers the option to sign up for a subscription. Customers could pay a monthly fee to get access to your services year-round, for example, or pay monthly in order to score discounted rates on services. 
  • Partner with other businesses: Reach out to local businesses or complementary online companies to do cross-promotions or strategic partnerships
  • Sublet your business space: If you don’t need your building, storefront, or office for a few months, try subletting it out to another business. 

4. Check in with your customers

One of the most effective ways to maintain your business—especially before a slow period—is to focus on customer retention. After all, it’s generally easier and more affordable to keep the customers you already have than it is to find new ones. Instead of letting your customers fade into the background during your slow months, find ways to stay connected. Here are some ideas:

  • Make a call: If you offer a seasonal service like yard maintenance or holiday light installation, reach out to your customers during the off-season to check in. You can ask if they need any help, or give them a discount code to use on their next service.  
  • Keep customers in the loop: Keep your business’s name top of mind by sending out regular emails with promotion opportunities, industry news, or important business announcements. If you shut down your business for a certain period of time every year, make sure your customers know when you’re opening your doors again. 
  • Create a loyalty program: Show customers you value their business by offering rewards and perks. You can offer discounts for referrals, or create a system where people get additional points with each purchase or service. 

5. Make a marketing plan

You may not need to allocate as much money to marketing if your business has a true off-season, but it’s still smart to have a game plan for the slower months. Consistent marketing is critical to drawing in new customers and keeping current ones engaged. 

To come up with an effective plan, start by laying out your budget for marketing and advertising during peak season. From there, you can work backward and see what’s realistic for the slower season. Here are just a handful of marketing strategies you may want to consider:

  • Double-down on social media as a way to connect with customers and promote your offerings.
  • Put out content (like email newsletters, blog posts, videos, and guides) that help generate brand awareness. 
  • Invest in a few low-cost, high-impact ad placements. 
  • Attend in-person events and online conferences to network and keep your business’s name out there.

6. Invest in business improvements 

Slow periods are the perfect time to invest back into your business. Even a few simple improvements can help you increase revenue, attract more customers during the busy season, and increase operational efficiency. Before you start making changes, consider your goals for the next busy season and beyond. Depending on what you want to achieve, you may decide to:

  • Streamline administrative processes: Assess your internal processes and systems for efficiency and ease. To fix inconveniences or problems, you may need to organize your digital files, invest in customer relationship management software, or change payroll providers. 
  • Train your workforce: Train your employees on proper customer service and job techniques, so you can hit the ground running come busy season. You can also use this time to search for new job candidates.  
  • Update your equipment: Schedule maintenance checks for big-ticket items, like point-of-sale systems, computers, machinery, and vehicles. You may want to replace old models or research new technology and equipment. 
  • Network: Make an effort to connect with business owners in your community and attend virtual or in-person industry conferences.
  • Update your website: Give your site a refresh: fix any bugs, update old content and information, and give your landing page a makeover. 

Running a seasonal operation can be challenging, but with a little planning and preparation, you can thrive all year long. 

If you need working capital to get through a slow period or take advantage of a busy one, check out Fundbox’s line of credit

Disclaimer: Fundbox and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

This post was originally published on How to Prepare Your Seasonal Business For the Slower Months on Fundbox.- Fundbox – Fundbox Forward

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