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Managing the ups and downs of a seasonal business print Print

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Seasonal businesses require good planning to ensure that there’s enough stock, staff and resource when it’s busy, and that the cash flow is managed well during the busy and quiet times. We look at ways to effectively manage your seasonal business so you can get the most out of it.

Seasonal Demand

What are seasonal businesses?

Seasonal businesses are popular in New Zealand. There are many of all shapes and sizes – orchardists, ski shops, beach hotels, fruit stalls. Seasonal businesses are determined by a number of triggers, such as Christmas, school holidays, summer and winter, and the end of the financial year.

There are two main kinds:

  • The business that closes completely during the ‘off season’. For example, the ski lessons business that closes during the summer months.
  • The business that stays open all year but has quiet months, such as an online store that sells summer surf merchandise.

What to do when you’re busy

Christmas is a really busy time for most Kiwi businesses. Retail and tourism are booming, builders and painters are completing renovations in the lead up to Christmas, mechanics are getting cars ready for summer holidays.

To make the most of the festive season, it’s important to be prepared, so consider the following:

  • Make sure you have plenty of stock to carry you through this period. You can’t sell off empty shelves. A good way to work out how much stock will be enough is to review your stock levels and sales from last year’s holiday season.
  • Some of your suppliers may shut down for a period over Christmas and New Year period, so find out when they’re available to deliver stock, and if necessary contact other suppliers to see if they are able to help plug any gaps.
  • It can be a stressful time for your staff, so offer them a quick refresher in providing a great customer experience.
  • Make sure your Christmas roster is prepared well in advance, so you can maximise your staff resources and cope with the increase in demand. Another reason why it’s good to give your staff plenty of notice and options of the roster over the Christmas period, as they’ll likely want to take time off to be with their family.

What to do when it’s quiet

Use that off-season time to plan, so that you can hit the ground running when the busy season kicks off. There are some really productive ways to put that quiet time to use:

  1. Get your budget sorted out. If you need cash from the busy period to carry you through the quiet time, budget accordingly. More on this below.
  2. Give your business a facelift – there’s nothing like a lick of paint and some new signage to freshen things up.
  3. Start organising the staff you’re going to need. If the season starts in December, you could consider starting the recruitment process in October. That way you’ve got enough time to train your new employees so that they’re ready to roll from day one.
  4. Consider some professional development. If there are courses you could take to give you an edge in your business, such as a free ANZ business workshop, take advantage of the quiet time to hone your skills.
  5. Review your marketing plan and make sure your website and other advertising materials are up-to-date.
  6. And of course, take time to put your feet up and enjoy the quiet period – after a busy season, you deserve it.

Don’t forget about your customers and prospects

Just because your business isn’t open doesn’t mean you can’t continue to market it. Keep your profile up so you’re in the front of potential customers’ minds when the season kicks off. Some ways to do this are:

  • Stay in touch with your customers and prospects through e-newsletters or media. This social media article has some tips such as the need to focus on engaging your followers rather than just pushing your products or services at them.
  • If your business is service-based, it could be worthwhile encouraging customers to use a pre-booking service. For example, if you run a lawn moving business, at the end of your season take time to make bookings for the first appointment of the summer with your customers. You can let your customers know you take bookings in advance by communicating it on your website and social media.
  • Kick the season off with a bang by having a launch event. It’s a great way to hit the ground running and get the season off on the right foot.

Manage your cash flow

Seasonal businesses are a bit of a cash flow rollercoaster. You'll have money rolling in during the busy season, like Christmas, but by New Year that will have slowed down, and you'll need to make sure you have enough working capital to pay the bills when they hit – which may not be when the income is flowing in. So make sure you understand the seasonal effect on your turnover and costs, and manage your cash flow carefully with these tips:

      • Run a detailed cash flow forecast so you’re less likely to face any nasty surprises. We have a cash flow forecast calculator and an article which takes you through the principles of good cash flow management.
      • Try to avoid overtrading. Some examples of this include buying unusually large amounts of stock or stretching yourself by taking on new staff, and it can leave you short of cash. Remember that booming holiday sales don’t necessarily mean good cash flow.
      • Review your credit management of customers, and look at whether you can negotiate when you pay your suppliers. Here’s an article on understanding and managing working capital.

Tools & resources

The season will soon fly by, so check out our article attracting customers over winter for tips on making the most of winter opportunities.

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