One of the challenges of owning your own business is identifying and overcoming a seasonal business. In an ideal world, your customers would walk through your doors at evenly spaced intervals timed to make the best use of your staff and resources. Unfortunately, in the real world, high demand tends to peak at a level above what your systems and staff can easily handle. For some businesses, this ebb and flow is directly tied to a calendar and is known as seasonality.
While this happens annually to a person who owns a seasonal business, many owners don’t quite know how to handle seasonality properly and lose money as a result. Worse yet, some business owners don’t even recognize their business is seasonal. The first step to recognizing the possible seasonality of your business is to run a revenue forecast for 12 months. Once you determine if you’re experiencing a summer slowdown or winter waning on any other seasonal slowdown, here’s what you can do to weather the storm.
Don’t leave money on the table
One common mistake businesses faced with seasonality make is neglecting to change their pricing structure. While you don’t want to gouge customers, the best time to raise prices is when your product or service is in demand, says Entrepreneur Magazine. In your case, that’s during your busy season. When you hit your slow months, reduce the prices on the products or services that tend to be the hardest hit by the seasonal change.
By the same token, don’t be afraid to close when necessary. Ice cream stands, for example, in cold areas tend to close during the winter months because the cost of staying open isn’t justified. If you do decide to close during your slow times, make sure you inform customers by using signs, social media and other contact methods that give accurate closing and reopening dates. If you have a physical location and closing is an option for you, look into renting out your location to another seasonal business during your off months.
Tap into your resources
Think of ways to generate more revenue in slow times by tapping into your existing resources. A landscape company, for example, could attach a plow to its current trucks during snowy times and sell snowplow services to local businesses and residents. Think out of the box, what might your customers need in the off peak season? If you’re not sure, ask them, survey your customers to find out what they need during different times of the year.
A level pricing model is another approach that works in service-oriented businesses. A landscaper who works in a warm climate where snow removal isn’t a option, for example, could offer his customers a flat rate per month for signing a year-long contact.
Develop alternative revenue streams
Develop new products and services in your off-seasons that make use of your business assets. A camp, for example, could hold haunted events in the fall to generate revenue. An ice cream shop could offer more sweets, such as candies and cakes, year-round to keep customers coming in.
Think about possible joint venture opportunities, could you partner with another company to offer other products and services during your slow time.
However you decide to boost your seasonal business, always prepare for the off-times by saving up money in advance. By having something to fall back on, you’ll be able to handle a slowdown even if your plans to minimize it don’t work out.