Slow seasons can be difficult for small business owners. Seasonal setbacks can arise that take a toll on stretched budgets and exploring new growth opportunities. Below are some slow season survival tips for small business owners used by various clients of ours. We hope you find them just as useful!
1. Offer products/services that are applicable all season
A good way to generate extra revenue is to bring on new products/services that extend beyond the seasons. Many business owners can find consistent sales difficult when certain products or services are seasonal. Services such as tanning salons find a higher uptick in the winter, with less volume in the summer; similar can be said about selling patio furniture in the winter months.
In order to circumvent a drop in sales over seasonal products and services, small business owners have traditionally used creative ideas to keep sales up during the off-season. Landscaping business can turn to tree and snow removal services in the winter to keep things running, and food trucks and seasonal restaurants can introduce new menu items to reflect the change of season. Retail stores can rotate new product lines, putting their off-season products in storage (or sell them to resellers and off-price stores) to make way for the upcoming months.
It’s important for small business owners to listen and learn about their customer’s habits. By identifying new areas of opportunity in their daily routine, businesses can sell new seasonal products and services to keep the revenue balanced throughout the sales year.
2. Spread operating costs and other expenditures out.
Seasonal businesses usually find finances to be most strained just before the prime season begins. It is always good for business owners to make a calendar-based budget to keep track of all steps along the way. Points to note should include personal tips such as the best times to hire staff, make business purchases, etc. This allows the business to allot necessary funds proportionately based on prior knowledge, efficiently and with ease. Viewing the budget on a monthly basis, or only focusing annually, is not the best way to ensure a business’ cash flow runs smoothly. Rather, budget for the year ahead, with view of the years to come – as this way the business owner can keep funds in their pocket to buffer any slow seasons ahead.
3. Try to negotiate contract terms with suppliers
It can benefit to speak with suppliers and make an attempt to negotiate contract terms. Talking to suppliers and vendors can help create more favorable credit terms, or to even modify existing contracts so that they work better for the business.
An example would be changing annual advertising contracts to seasonal contracts – saving a lot of money and giving more control over finances. Remember, it doesn’t hurt to ask! Many businesses find that suppliers are willing to grant seasonal businesses extended payment terms or offer similar arrangements to assist during slower business periods. Good relationships with vendors can help make this a possibility, especially when payments are made on time, sales volume is high, and when there has been a long history of business together.
4. Secure flexible working: #1 of all slow season survival tips
My financing institutions prefer to fund businesses just ahead of their busy season, because they know they will collect their money. Similarly, business owners prefer to have funds available just prior to busy season because they can deploy funds into revenue-generating activities. This allows the business owner to pay the financing institution back with new customer money (instead of having to tap into existing cash flow). Please let us know if we can do anything to secure you flexible working capital.