Running a seasonal business certainly has its ups and downs. But there are numerous ways to remain productive and profitable while sustaining your primary workforce even when your core business slows down. Cash-flow management is one of the most critical aspects of a successful business. You must plan and anticipate your business flow so you can save money during the busy times to cover expenses during the down-times. Here are some tips for doing just that.
5 Tips for Managing Cash Flow
1. Diversify your income stream
Consider expanding your services in a way that would utilize your current employees. What would be a natural extension of your company? An example of extended services for a lawn maintenance company could be to add leaf and snow removal, weatherization of water features, and gutter cleaning. For a wedding planner, it could mean expanding into event planning and catering.
2. Increase income without expanding
During slow times, you might be able to sell excess inventory, offer discounts, or offer an annual contract to seasonal customers so their monthly cash flow and yours are consistent throughout the year.
3. Improve your business practices
Reach out to your suppliers for more flexible terms to accommodate those times when business is slow. Review what your company might be wasting. Consider a just-in-time approach, described here, to manage your inventory during the peak season. This will help keep your inventory low, as you’ll be relying on your suppliers to have inventory ready to ship to you as you need it.
4. Consider a seasonal business loan
Alternative lenders like BriteCap will work with you to find the best financing solutions and get you the cash you need in as quickly as one business day. The needed cash you get can help you with such things like payroll, taxes or to prepare for next season.
5. Reduce staff
Staff reduction is another possible way to minimize off-season expenses. If you go this route, you should discuss it with potential new employees so they fully understand that there is a defined season of employment.
Don’t Forget About Marketing
Marketing is vitally important, and a good time to increase your marketing efforts is during the off-season. If your customers don’t think about you, you won’t be successful, says Debbie Allen, author of Success Is Easy. You want your customers to look to you as a thought leader in your business category. A host of marketing tools can help your company stay top of mind, even in the off-season. Blogging and e-newsletters can provide your customers with educational information on a diverse range of topics. Email surveys asking what services your clients value can show your interest in meeting their needs, as well as provide valuable insight into future business expansion or partnerships. Discount offers on six or 12-month contracts before the season begins can boost your income. Research what successful competitors are doing, or not doing, to maintain relationships with their customers.
For more tips and advice, visit our small business resource center.