Many businesses have busy seasons and slow seasons, but small businesses face especially serious challenges from this seasonality. Slow seasons can easily kill small businesses because small businesses don’t have a lot of resources to fall back on.
They can’t always meet operating costs when revenue is low. However, if you run a small business, there are several things you can do to help protect your small business from the negative effects of seasonality.
Planning is Key
There are two key plans you need to make. One involves estimating your operating costs through the slow season, along with the revenues you can likely expect.
You need to take the difference between those figures out of your profits during the busy season before you do anything else with them. Put it in the bank and use it to cover shortfalls during the slow season.
The other plan you need to make is a plan for preparing for the busy season. To be ready for it, you may need to hire seasonal help, increase production, find a new workspace, and do more advertising. You need to work out how you’re going to do all of that before the busy season gets going.
Do What You Can to Lower Costs
You also need to bring operating costs down as low as you can during the slow season. One effective way of doing this is to keep a minimal staff employed year-round and only hire extra, short-term help during the busy season.
It’s even more profitable to hire freelance contractors during the busy season if you can, as you may not need to train them as extensively and can pay per job rather than per hour.
If you’re in a field service business, you can manage your business more efficiently without adding staff with ServiceWorks software. This affordable software package increases your sales by letting customers book services online. The app also optimizes your routes and schedules, improves communication with customers, and even lets you accept credit card payments at a low rate. Try it free and see how much staff time you can save.
If your business produces things instead of offering services, you should buy as much of the raw materials you need during the busy season as possible. That way, you can take advantage of the lower prices that come with large orders. Buying them during the slow season means you could end up paying a lot more in the long run because of smaller orders.
Entice Customers with Special Offers and Events
Try to raise revenue during the slow season by making special offers and holding special events. You may make less money per sale that way, but you could more than make up for it in volume.
Diversify if You Can
If you can, find another line of business you can branch out into that has a different busy season. Ideally, it should be as much like your current line of business as possible so that you don’t have to work too hard or spend too much to repurpose your business resources. If you can’t find something similar, it might cost too much to try this approach.
Armoring Your Small Business Against the Effects of Seasonality
There are many ways to beat your competitors. If you’re running a small business, outlasting them is a pretty likely option if you put the needed thought and effort into armoring your small business against the effects of seasonality.