Managing a seasonal business can be rewarding, but it also presents unique challenges that owners of other types of businesses may not face, especially with regard to their financial situations. Here are five small business finance tips to help your business reach its full potential.
- Promote your business even during its off-season.
Many seasonal businesses focus all of their marketing efforts and budget on their busiest times of the year. Although these times certainly require a significant amount of marketing resources, you shouldn’t go radio silent during the off-season. Find creative ways to stay in contact with your customers throughout the year so that you can remain at the top of their minds. Increase your marketing efforts before your busy season begins so that you can get to the customers before your competitors do.
- Find other ways to earn income.
During your off-season, your company’s revenue will usually decline markedly. Depending on how strong your business is and how well you have planned, this may be a financial burden. One way to reduce the impact of the off-season on your financial situation is to build other alternative income streams that will boost revenue during this time. Keep these alternative income streams as closely related to your business’s primary purpose as possible.
- Manage staff carefully.
Carefully a full staff all through the year is rarely a wise decision for the seasonal business, unless your alternative income streams provide you with enough revenue to make this practice worthwhile. However, hiring no full-time employees may also cause you to miss out on some of the best talent in the industry. To get the best of both worlds, offer full-time positions to your most effective employees and hire part-time help during your busiest seasons. To avoid confusion and disappointment, make sure that all employees understand their role in the company, the duration of their contract and whether you will extend another offer to them during the following year.
- Seek external funding.
If necessary, seek funding from outside your business to get you through the off-seasons. Make sure that each investor you choose understands the nature of your business, its typical cycles and the benefits he or she will receive as a result of investing in the company.
- Always think ahead.
When managing a seasonal business, you should be looking at least six months into the future at all times. Even if your business is bringing in high amounts of revenue during its busiest time of the year, remember that a leaner time is coming. Instead of investing or spending all of the revenue your company generates, consider putting some away for the slow season.