As we move from a dark and dreary winter to a warmer spring, a number of seasonal businesses will be kicking into action, while others will be preparing for their quieter period after a busy few months.
The changing of the season will affect a surprising number of businesses, with event planners, landscape gardeners and snow clearance companies all having very distinct periods when they make most of their cash for the year.
Running this type of business requires excellent organisation and planning to ensure cashflow is kept in check throughout the year.
Here are a few ways such firms can ensure they stay in the black 365 days a year.
Plan, plan, plan
Keeping a seasonal business afloat requires thorough planning and there’s plenty of time to do it in the quieter months of the year. Use any downtime to make sure you have sufficient stock levels and manpower in place during peak season so you don’t have to turn down any work. A clear budget is also essential. You should know what your minimum cashflow level is and have a reserve of cash in case you need a safety blanket during slower months.
It’s also a good idea to spend your off-season encouraging clients to plan ahead. If you know they’ll be in need of your services next summer/winter, get them to commit now so that you have a better idea what turnover you’ll have during peak months.
As mentioned before, carefully managing your cashflow is key to running successful seasonal businesses and there are a number of ways you can ensure that some cash is coming in all year round. One effective way of doing this is to ask clients to give you a deposit when the service is booked, with further instalments to be paid in the lead up to delivering the service, or asking for payment in two instalments, one to be received in high season and one when things are quieter to help keep you ticking over.
It’s also essential to be on top of payment issues. Send out invoices promptly and with clear payment instructions and nip any problems with late payers in the bud as soon as possible.
Cut down on costs
As with any business it’s important to cut costs down, especially in the low season. Think about whether you need office space all year round, would you be better with a virtual office rather than paying out rent and other overheads on an office which is largely quiet or even empty for big chunks of the year?
One way to ride out the off-peak season is to see if there are any areas you can diversify into which would make use of the skills and expertise you already have at your fingertips but would prove popular either year-round or in the months when your existing business is quieter.
Posted by the Secret Businessman