How Do I Survive With A Seasonal Business?
Owners of a seasonal-business have a short window to profitability. Some years, that window is even shorter. This income, above the cost of doing business, wages, taxes, and goods must last an entire year. And to make life more complex, many seasonal businesses have annual bills. So how does an owner of a seasonal-business make it work? Short answer: Successful seasonal-business owners have tricks that ensure their seasonal businesses earn money beyond the typical season; they extend the profitability window.
So here are a few tips on how to stay alive and thrive even with a seasonal business.
Minimize and manage off-season expenses
There’s a little phrase “you’d better be a’knowin, where its’a goin.” First and foremost, reduce your burn rate. Track your expenses in the off-season and then cut off-season spending as much as possible, without losing those marketing ideas that run during your season and other expenses that cannot be cut. Minimize off-season spending. You cannot spend like you’re in season 12 months out of the year. One trick we use in our business, Nozak of Harper’s Hut says, “we prepay our off-season rent. This eliminates some stress of portioning out funds during the off-season.”
It holds true for all expenses. Reduce staff, cut back on marketing and advertising and get flat to the ground. Nozak says, “in our never ending journey to flatten out our structure, we’ve renegotiated several contracts to be more off-season friendly. Most vendors and people doing business with you are fairly understanding about these things.”
Re-purpose your equipment
If you can add products that have a cyclical nature to your current product offering, then you will be in better shape each year. “For instance, in the shaved ice business we add coffee during the winters. This also allows us to retain our best employees, even if sometimes it costs our business.” There are more opportunities than increasing your product offerings. Look for novel ways to use your gear in the off-season. When Harper’s Hut seasons end, they re-purpose their machines to high school football stadiums and gain an additional month of revenue past normal operation. This re-purposing can be a three fold advantage Says Nozak. These schools can make money off our equipment, help us pick up additional fans, and increase our cashflow-window. Everyone remembers your business, when you help others succeed at the same time.
We all know cash flow is the life blood. Safari Joe’s H2O comes to mind. Encourage early booking by offering steep discounts to customers when they purchase season tickets, early. Anyone seeking off-season cash flow, should consider incentives for clients to purchase early.
Consider selling older gear and inventory to make large leaps forward
Every small business owner has a garage or shed full of iterations. By this I mean, products that fit the gap from one perfect fit to the next. As your business grows so too will your needs change. You’ll switch POS systems, machines, vendors, and even buildings in some cases. When you make these changes, you will be left with a garage or shed of earlier options. Consider selling these items in order to advance your business into newer gear or possibilities.
For small business owners, sometimes it makes sense to keep your money tied up in gear and supplies that sit around until the following season, but this is not always the case. According to Nozak, in shaved ice the ready-mix flavors have a shelf life of 6 months, so at the end of each season instead of dumping out 20 gallons of flavors, they rent/lend machines out to organizations and sell them the flavors along with the use of the machine, recouping some of their inventory investment. Even if at a loss, it’s still a win. “In shaved ice, we aim to get our inventory to zero. Not including things that have no expiration or a shelf life greater than two years,” nozak states.
Offer your products in different channels or try new product offerings
To extend the season, you might want to consider switching up your offerings in an effort to bring in new business. Run seasonal specials, promote seasonal offerings, or put your inventory in locations that have longer seasons or even no seasonal reduction. There is more than 1 way to skin a cat as they say, and I am not a cliche man. The bottom line is the bottom line, so increase your cash flow beyond your traditional season.
So experiment, but don’t bet the farm on it. Nothing guarantees success when offering new or alternative offerings to your client base. Tread lightly and pay attention to your sales trends. Pull back quickly when it’s obvious you’ve missed the mark.
My final thoughts on how a seasonal-business wins
Look for indoor opportunities if you’re outdoor, break down your setup to a tent or a booth, rent a space in a place that has annual traffic, or make your website into an eCommerce and aim to sell online. ABT – Always be thinking. Check out Harper’s Hut shaved ice business and may you have many successful years ahead of you. Learn more about content writing. Still have questions about How Do I Survive With A Seasonal Business? Fell free to contact us.