Running a seasonal business can be very tricky. Keeping up-to-date and remaining relevant even when the season your business thrives in is over can be quite a struggle, as fixed overhead expenses need to be paid throughout the entire year – including off-peak months.
Here are some tips on how to manage your cash flow when running a seasonal business:
- Create variety and diversity in your offerings
Try products that can build your main business and attract the same kind of customers even during your slow months. Make sure, though, that this side offering doesn’t kill the main brand or remove focus from your main business.
- Consider a line of credit
Let’s say you have all the ideas to diversify your products or services, you’d still need funds to market these ideas to your existing and new customers. In this case, you might need to consider signing up for a small business loan.
A line of credit can become quite beneficial because it can provide you with ready access to funds whenever you need it so you can move forward with your business, even during off-peak months.
- Plan expenses
Cash management is key when running seasonal businesses. You will need to come up with an expense sheet that reflects all of the bills and expenses that need to be paid throughout the year. There is no room for unplanned expenses in this type of business.
- Rent out your shop, or just close
If none of the other options will work for you, you can always rent out your shop to other seasonal businesses who thrive during your slow months. You can always explain this decision to your customers, helping them understand that you are still actually in business but will be back when your season is up and that it wouldn’t make sense for you to keep going during quieter months.
Many seasonal businesses produce great incomes – it all boils down to cash management. You will need some really great skills to make sure you increase profits and minimize losses.