Managing the highs and lows of a seasonal business

Australia is a country for all seasons. We can have hot dry summers, cold harsh winters, and everything in between.

Almost all businesses experience fluctuations like the weather patterns too. For some, there are small peaks and troughs felt throughout the year; for others, it is more a case of feast or famine.

Businesses that fluctuate strongly according to the weather are known as seasonal businesses. They offer products or services that are primarily used during a specific time of the year. Some seasonal businesses close during the off-season, like ski-fields and fruit stalls, whereas others can ride out the dip in demand (or supply) and stay open year-round.

The best thing about seasonality is that, to some extent, it is predictable, which means you won’t be taken by surprise and at least you can plan for it.

However, almost all businesses fluctuate throughout the year, so the principles for managing those fluctuations apply to all.

Here are some tips to help manage seasonal businesses:

Understand the cycles in your business or industry. If you understand them, you will be able to react quicker and maximise on opportunities.

Don’t be rigid with pricing. Consider reducing prices when demand is low and increase prices when demand is high.

Make sure you have enough stock for your busy season and ensure your suppliers are available should you need top ups.

Consider new products or services to build alternative income streams or boost demand during the off-season. For example, some ski and snowboard importers provide a summer line of beach and surf products for their off-season.

Make the most of your downtime during the off-season. This is when you should do any major stock takes, budget setting, strategic planning, renovations and staff training.

Make sure you have enough staff and that they are up to speed. If you have rosters, prepare them in advance and have back-up plans to avoid last minute staffing issues for busy periods.

Don't forget about marketing during the off-season. You still need to keep your profile up and stay in touch with your customers.

Seasonality can have a big effect on turnover and costs. Run a detailed cash flow forecast to avoid nasty surprises.

In a perfect world, customer demand would be evenly spaced throughout the year – planning would easy, cash flow would be predictable and resourcing wouldn't be a problem.

But that’s just not the reality. If your business experiences highs and lows, planning will help you to not just survive the lows but thrive in the highs.

It could be a good idea to buy a supplementary business to remove the lows? Check out some of our current business for sale options.

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