No matter what industry you’re in, it’s important to ensure that you have enough capital to maintain your business year-round. However, this is especially important if demand for your products or services ebbs and flows based on seasonality, such as with pool accessories or holiday decorations.
To that end, a panel of Young Entrepreneur Council (YEC) members answered the following question:
“If you run a seasonal business or one that earns more profit during a certain time of year, what’s one step you can take to ensure you’re financially stable all 12 months of the year? Why is this effective?”
Here’s what they recommend you do to give yourself more financial peace of mind.
1. Allocate Time to Development and Sales Cycles
“Seventy percent of our revenue occurs within four months. For 12 years, we’ve facilitated a predictable two-part cycle: seven months of development and five months of sales. By stabilizing our burn rate, we are able to make incredibly accurate predictions. All 12 full-time employees have tasks associated with the development and sales seasons. At this point, we prefer this hyper-seasonality over a less-segmented timeline.” ~ Carmine Silano, CheerSounds Music
2. Offer Exclusive Coupons During the Off-Season
“You’ll have a better chance of staying financially stable all 12 months of the year if you offer your customers exclusive coupons during the off-season. For instance, a gardening website could still do a Black Friday sale and bring in a ton of profits even if most customers can’t plant the seeds immediately.” ~ John Brackett, Smash Balloon LLC
3. Introduce Budget Billing
“Introduce budget billing where customers can spread their costs over the whole year rather than paying large payments during the peak season. That way, you will also safeguard yourself against the drive to splurge on discretionary expenses. You would also ensure a steady cash flow by doing a yearly billing. This will be feasible for your customers too, especially with high-rate purchases.” ~ Brian David Crane, Spread Great Ideas
4. Outdo the Competition
“If you’re running a seasonal business, a viable strategy to ensure stability throughout the year is to outdo the competition. Research is the key. You’re active during a certain time of the year, so you should spend the rest of the months preparing for it. It’s effective because customer preferences change over time, but no matter what the industry throws at you, you’re prepared.” ~ Stephanie Wells, Formidable Forms
5. Develop a Long-Term Financial Plan
“The best way to ensure you’re financially stable all year, even if you run a seasonal business, is to develop a long-term financial plan. In other words, you should know your costs during peak periods and outside the holiday season. If you understand your expenses, you can effectively budget and make sure your business remains profitable.” ~ John Turner, SeedProd LLC
6. Diversify Your Product Line
“I believe in critical and innovative leadership. Envisioning creative solutions should be in your job description. So, diversify your product line to cushion yourself in tough financial times. For example, if you sell Christmas trees, sell wreaths and garlands. Your customers will have a reason to come back throughout the year, keeping your business afloat and increasing your profits even in busier months.” ~ Tonika Bruce, Lead Nicely, Inc.
7. Collaborate With Another Business
“Collaborating with other businesses is a great way to ensure financial stability all year round. You can promote each other’s products, which will help bring in more business. This is especially effective if your businesses are complementary to each other. For example, a clothing store could team up with a local tailor. By collaborating, you can reach a wider audience and generate more revenue.” ~ Syed Balkhi, WPBeginner
8. Offer a Subscription
“One effective step is to add a subscription to your offer. This way, you will be able to bring in revenue on a monthly basis, which can help offset any slow periods during the year. This also allows you to build up a base of loyal customers who are more likely to continue using your services or products even during the off-season.” ~ Adam Preiser, WPCrafter
9. Build an Email List
“I suggest building an email list so you can stay in touch with prospects and existing customers all year. This strategy will allow you to connect with your target audience months before your seasonal brand swings into action. If used correctly, consistent emails can help you build rapport and ensure that your selling window is profitable and sustainable.” ~ Chris Christoff, MonsterInsights
Image: Envato Elements
This article, "9 Strategies for Year-Round Financial Stability as a Seasonal Business" was first published on Small Business Trends
via https://www.aiupnow.com
The Young Entrepreneur Council, Khareem Sudlow
