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Have a Seasonal Business? 5 Tips for Year-Round Profitability

Have a Seasonal Business? 5 Tips for Year-Round Profitability
Credit: EMprize/Shutterstock

By their nature, seasonal businesses only have a few months to generate enough money to sustain themselves all year long. However, being a seasonal business doesn't mean you're doomed to zero cash flow in the offseason: It's all about careful planning and creating a strategy to keep you going long after peak season.  

Whether you're gearing up for the holiday season or slowing down after your summertime rush, here's how to keep your business afloat throughout the year.

The first and most important step in managing your finances is getting a good understanding of your expenses in the offseason, and then thinking of ways to minimize them, said David Goldin, president and CEO of business financing provider Capify.

Goldin advised reducing your business hours and days, lowering your staffing requirements, and cutting back your marketing and ad budgets to save money. You can also renegotiate some of your vendor contracts and recurring services to see where you can scale back, he said.

Damon Millotte, vice president of Tailor Made Lawns, suggests spanning out commission or sales as a way to receive income during the offseason. Tailor Made Lawns offers different payment options, which helps with year-round profitability.

"In the lawn care industry, it's not unusual to offer a prepay discount for customers who would like to pay for the entire upcoming year of service all at once," Millotte told Business News Daily. "The prepay also helps us stay profitable year-round when we aren't actually making money." 

Business owners should make the best of their slow time so they are prepared when the busy season hits. For example, Millotte trains employees during the offseason, while Christopher Tabone, CEO and founder of Koda Sail, uses this time for strategic planning.

"Being a seasonal business, we know that for two months out of the year, we are so busy and have no time to think of strategies to grow and improve, so we use the offseason for this," he said.

"Business owners should also be utilizing their time to access business needs and set goals and profit targets for the next season," said Brandon Stephens, president of Christmas Decor. "This might include calculating ideal number of clients to retain, adjusting the training process, ordering new equipment, conducting pricing evaluations, updating marketing materials, etc."

Gary Fouts, owner of multiple seasonal small businesses, said the best way to keep a seasonal business profitable is to operate two or more businesses whose offseasons complement each other and that can share equipment. For example, Fouts runs a landscape management company, an outdoor lighting company (Principle Lighting Inc.) and a Christmas lighting add-on service through Christmas Decor, all of which drive referrals for one another.

Fouts also noted that his Christmas decor business has many other purposes outside of the holiday season, such as other holidays and special events like weddings.

"We also get creative – offering lighting designs for other festive occasions outside the holidays like Valentine's Day, St. Patrick's Day, sporting events," added Stephens. "Make sure to never lose sight of potential business opportunities that may arise with a bit of creativity."

Toffer Grant, founder and CEO of prepaid business Visa provider PEX Card, recommended looking through your inventory at the end of your peak season to see if anything can be sold off.

"A business has to determine [if] it is worth keeping money tied up in gear and supplies that sit around until the following season," Grant said. "Recoup some of the money by selling materials for what was paid, or even at a small loss [to] cash out those items."

Fouts said his objective is to get the inventory as close to zero as possible before the end of the season.

"We'll run a special on whatever color or type of lights we have in excess, sell off inventory to franchisees in the network or other companies," Fouts said. "If, at the end of the season, there is still an excess of a certain color or type of lights, we'll store them during the offseason."

To extend the season of your business, you might want to consider switching up your offerings to bring in new business. Kona Ice, a gourmet shaved-ice company, began selling Kona Cocoa and coffee at some of its franchises during the winter months as a way to continue relationships with customers throughout the year.

"Introduce the product as a seasonal special, [such as] coffee shops that sell limited-time pumpkin spice lattes, said Tony Lamb, founder and CEO of Kona Ice. "It allows a brand to experiment, but people don't start accepting that as [standard]. See what catches on."

"You don't want to go all in; you want to test," Goldin added. "Tread lightly and experiment to see if you can increase business. If it works, expand it next year. You may be pleasantly surprised."

Additional reporting by Nicole Fallon and Jennifer Post. Some source interviews were conducted for a previous version of this article.

Saige Driver

Saige Driver graduated from Ball State University in 2015 with a degree in journalism. She started her career at a radio station in Indiana, and is currently the social media strategist at Business News Daily. She loves reading and her beagle mix, Millie. Reach her by email, or follow her on Twitter.

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