In a nutshell: Seasonal businesses should be measuring sales and traffic, building relationships with employees, diligently managing cash flow and taking advantage of the downtime.

When you think of a seasonal business, you probably think about the saltwater taffy shop on the boardwalk at the shore or the ski rental lodge on top of a snow-capped mountain. But, most small businesses have some kind of seasonality to be cognizant of – so you can capitalize on it.

Growing up, my family owned a couple of pizzerias. Seasonality was apparent in the business. We’d see a significant slowdown during the summer months – June, July and August. This was because our “regulars” were taking turns going on vacation while their kids were out of school and the “snowbirds” (retired folks who spend their winters in Florida and summers in their hometowns) were back up north.

No matter what kind of seasonality your small business sees, here’s how to make the most of it.

Understand the Ebbs and Flows

The first step in capitalizing on your seasonal business is to identify the busy times, slow periods and off-season. To do this, you must have at least a year’s worth of revenue or attendance data to chart. You can take raw daily revenue data and create a line graph that spans the whole year. In the example of my family’s pizzeria, we would see a lull during the summer with a more consistent fall, winter and spring. When zoomed in on weekly data, we had a significant increase on Friday and a slight increase on Saturday (popular pizza nights in the US). Having more than a year’s worth of data is ideal as some seasonality can occur every two, three or four years (think television advertising revenue due to political elections or the Olympics, for example). Once you’ve charted the data, you’ll be able to pinpoint where, for how long and by how much seasonality affects your business.

The Right People

To keep you afloat in the slow times and maximize opportunity during the busy period, having the right employees will make all the difference. What we found at the pizzerias having a strong core group of employees who are committed is key. These people are willing to ebb and flow with the busy times and understand that seasonality is part of the gig. As for seasonal help, try to keep employees coming back year after year. Turnover is a natural part of seasonal help but if you can make the job attractive and entice last year’s productive workers to come back, you’ll save costs on hiring and training. Here’s how:

  • Make it a “fun” seasonal job.
  • Motivate them with incentives, like contests for sales or attendance.
  • Help people make connections with each other – bonds with other employees will get them excited about coming back year after year.
  • Reach out to them prior to the season starting to gauge their interest and lock them in. It’ll also make them feel like the job they did last year was valued.

Manage Your Cash Flow

When it comes to a seasonal business, budgeting is so important. Accurate forecasting is necessary for you to be successful in managing your cash flow through the year. Know your peak season and how much cash you’ll need to hoard from this time of year to make it through the off-season. Understand what your recurring costs are because you’ll at least need reserves for these expenses. Seasonal businesses often must use lines of credit or small business loans to help prepare for the next busy time. Just be sure to use them conservatively and intelligently.

If you’re dealing in inventory, buy it while cost is lowest. Then cash in when you can get the best retail prices. Balance this concept with not keeping too much inventory during a lull. That is, unless you know you’ll be selling the same thing next year. Often, seasonal businesses are expected to keep up with the times and may be selling something even just slightly different the next year. Don’t get stuck with a bunch of outdated inventory just because it was cheap.

With my family’s pizzerias, we would change some of the menu items (namely, specialty salads) with the seasons. This would allow us to keep costs similar from month to month despite changing prices for local produce. And it freshened up the menu options without doing an overhaul.

Time Promotions Properly

You may think promotions are only appropriate for a seasonal business during its downtime. Not true! In the busy season, focus on increasing customer spend. You already have a captive audience, so trying to upsell even just a few dollars per customer will go a long way. We did this at the pizzerias with bundling specials. A typical family of four may buy a large pizza, but if we offered a large pizza with a dozen garlic knots and a two-liter of soda for a few dollars more, it wasn’t a hard sell. It’s not an excessive amount of food. And we had a great margin on garlic knots, for example. So, be creative to get your customers to spend just a little extra. It’ll make a big impact on your bottom line at the end of the season.

For the slow times, don’t just think about desperately getting people in the door. Consider building different revenue streams. While my family’s pizzeria isn’t a good example of this, the garden center down the street is. The garden center’s busy time was spring, but (even in Florida) winter is not an ideal time to plant. So, it started offering Christmas products to build additional funds during what would be the off-season. If nothing else, it keeps you top of mind (and helps you stay in touch) in the off-season.

Use the Slow Periods

Sure, take a well-earned break during your slow time. But not for too long! You should be using this time to continue improving what you can do better when the boom hits again. It’s also a time to spend a little money on making the improvements. As long as you have a good track record for forecasting accurately, you should feel comfortable taking a little risk and investing in the business. Anything you take the time to do now will only make the busy time go smoother. A few ideas for your off-season include:

  • Create a content calendar to stay in touch with customers all year long.
  • Ask for customer reviews to build your brand reputation. (My family’s pizzeria took the time during the summer lull to create a flyer that went on all the pizza boxes to remind customers to let us know how we’re doing via online review sites.)
  • Keep up your social media presence (and schedule posts for the busy season when you’re busy running your business and can’t be on Twitter).

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