This article was originally published in 2016. Some rules, rates or tools mentioned may have changed since — contact us for current guidance.
Many seasonal businesses are now entering their busiest seasons. While that's great for your current income, it's also critical that you manage income effectively in order to ensure your cash flow for the entire calendar year. If you're struggling with managing a seasonal business, these tips will help.
1. Prepare Your Budget Early
When you run a seasonal business, you need to create a budget forecast for a year at a time. Then, during your busy season, you'll know how much money you can reasonably allocate to incidental expenses and how much money you need to set aside for expenses that may come up during the rest of the year. Be clear about what things really cost during the off season, whether you're dealing with a store that you shut down when the holidays are over or a rented storage space for unsold merchandise.
2. Use Your Off Time Well
Create a plan for what you'll be doing during your off time. Ideally, you don't want to scramble to come up with brochures, send out emails, and other vital tasks when your open season is already in full swing. Instead, use your off time productively to take care of those key tasks.
3. Stay In Touch
You want customers to remember you from one season to the next. When the next holiday season arrives, you want them to know what your business will be offering this year, what sales and promotions you have going on, and where you're going to be located, if your store location changes from year to year. Find creative ways to stay in touch with your customers in the weeks leading up to the holidays. Some of the best times to reach your customers occur when your competitors are silent!
4. Maintain a Cash Cushion
Having a cash cushion on hand is often the best way to handle your off season. If this isn't something you've built in the past, it's time to start working on it! Make sure your business has enough cash available to get through the slow times.
5. Staff Appropriately
Like any other business, you will have times that are busier than others. Develop a projection of the times that are busiest and the times when your business will be quieter and staff appropriately. Paying staff members that you don't really need is an expense that will simply drain your budget.
Managing a seasonal business can be challenging. Developing strategies to handle your cash flow is a great way to keep your business running smoothly no matter what the time of year. If you're looking for more help with your financial management tactics, contact us today!
