It’s autumn and that means warm-weather seasonal businesses are winding down and many will close or slow down operations for the winter. If your business is seasonal, do you know how to maintain and keep your business growing during the off-season? And how to get your business ready for a strong start next year?
In this overview, you’ll learn five key tips to help you make the most of year-end down time, manage seasonal cash flow with ease and put yourself in a better position for next year’s busy season.
1. Automate year-round bill payments
While the off-season may give your business a temporary halt to expenses like payroll or seasonal inventory, many bills must be paid year-round. This can include rent, utilities and insurances. You can set up automated payments for these expenses so you won’t forget about them while you’re taking advantage of some much-needed off-season rest.
To help you keep track of transactions, you can use a bookkeeping program like QuickBooks®. In addition to tracking payments, you’ll have better records for your year-end financials, which can help decrease your taxable income. This will also better position your business for an influx of working capital – through business loans and lines of credit – when you need them.
2. Review your past season’s financial projections to find missed opportunities or errors
It’s never too soon to start planning for next season. By reviewing your past financial projections now, you’ll be better positioned to leverage more opportunities for revenue and growth next year. Start by conducting a thorough and honest review of your previous busy season:
- Were you well-prepared for the start of the busy season? With cash in-hand for updated marketing and advertising pieces, bulk inventory purchases and well-trained staff? If not, was it because of insufficient working capital or business planning? Now’s the time to address these issues and any others that you identify.
- When income started flowing again, were you able to invest it into growing your business and taking on new opportunities, or did you have to use it to catch up on past expenses? If you find that much of your in-season revenue is spent catching up on off-season expenses, then you need to plan more strategically to keep your business growing. If that’s the case – and it often is for small businesses – it’s a good idea to look into your options, whether it’s a business loan or line of credit.
3. Open a line of credit or secure a loan to increase working capital
Don’t wait until your cash flow is too tight and you fall behind on bills in the off-season or you’re not ready to ramp-up for the busy season because of insufficient working capital.
Now’s the time to meet with your banker or a certified alternative lender for guidance on securing a working capital loan or line of credit. Doing so now means that you won’t be in panic mode later and you’ll be less vulnerable to falling towards predatory lenders. With proper planning and plenty of time, you’ll be able to secure a loan or line of credit with lower interest rates and reasonable terms.
You may even find it beneficial to negotiate for interest-only payments during slow months and make full monthly payments, with both interest and principal, during busy seasons. Your accountant can advise you on how to best negotiate this type of arrangement.
Whatever you choose to do, make sure you thoroughly understand the terms of the loan or line of credit and any prepayment penalties or fees that you could receive. Getting this information in advance will allow you to shop around for the best terms.
4. Adjust staffing appropriately
It’s important to manage your seasonal employees efficiently – especially when money’s tight – and optimize your staffing level. If you’ve let your seasonal help go but find that you need help managing the day-to-day administrative work, hiring someone on a part-time and temporary basis can be a good idea. If you develop a clear understanding of your staffing needs for the off-season, you will be better equipped to make more informed and cost-effective decisions.
If you’re considering staying open but limiting your hours throughout the off-season, have you done a cost-benefit analysis to decide whether it’s smarter to close? If you have staff through the winter, can they work on a commission-only basis? What are your competitors doing? Consider all your options to save on this significant expense.
5. Come up with low-cost, low-overhead ideas to generate off-season revenue
Even if your business closes for six months of the year, there are easy ways to create income throughout the off-season. For example, if your business’s brand is popular (and you should be working to make it so), offer items that you can sell online as holiday gifts like branded t-shirts, mugs or Christmas tree ornaments. These sales can help cover off-season costs, build brand loyalty and keep your business front-of-mind, even when it’s closed for months at a time.
The off-season is a great time to work on educating your current and future customers. You could write blog posts for your website, or publish video content about your products. You can use this “down time” to show the benefits and uses for your products or services. This will help to keep your audience engaged and excited for the business to reopen in the “on season.”
Cost-effective marketing initiatives are a great way to communicate with your target audience, especially during the off-season. Email marketing is known to be one of the most effective and cheapest approaches to reach your clients. This way you can stay in communication with your audience during the off-season, whether it’s through email or social media.
It’s easy and inexpensive to set up online stores through plug-ins on your website or through sites like Shopify®. If you already work with vendors on souvenir-type items, this is a great strategy to generate sales and stay in touch with your customers. You can also offer off-season specials for your loyal customers to use once the business opens again. This allows you to still bring in revenue, while your customers stay engaged and receive a special price for buying ahead of time.
Take time to reevaluate for next year
Seasonal business owners who approach slower months as a time to evaluate their work and prepare for the next busy season greatly improve their odds of success. Set yourself on the right track by using this time to organize, plan, and learn as much as you can about strategies to grow your business next year.
Having the right financial systems in place is crucial to evaluating your current and future business performance. Will you need additional financing in the future? Should you hire more employees? Would a marketing initiative bring in more sales? These are all questions that should be address in your off-season downtime, with the help of your historical and projected financial statements.
Pursuit has financing available to help your business during the off-season
Pursuit is a leading small business lender throughout New York, New Jersey, Pennsylvania, Connecticut, Illinois, Nevada, and Washington. We have a line of credit and business loan options that can help you finance your business needs during the off-season to support growth.
Contact us to learn more about how we can help you grow your business.
