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Have a Seasonal Business? 4 Tips for Year-Round Profitability

Have a Seasonal Business? 4 Tips for Year-Round Profitability
Credit: EMprize/Shutterstock

Being a business owner is stressful, and it can be even more stressful if you're only profitable during part of the year. 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.

As a business owner, you always need to understand and manage your cash flow and expenses, but this is especially important for seasonal businesses. Once you understand your offseason expenses, look for ways to minimize them.

"Every dollar that leaves your bank account is money that can help you better weather the offseason," said Russ Jundt, founder of Conserva Irrigation. "Dedicate yourself to minimizing necessary expenses and eliminating unnecessary costs."

You should also look for ways to expand your sales into slow periods. Gary Fouts, owner of Christmas Decor, offers monthly payments plans to help with offseason expenses. "Offering monthly payment plans can be a great way to help a client afford your services while also helping your business have a consistent source of cash throughout the year," he said.

He promotes seasonal services and incentivizes people to sign up during the offseason.

"This biggest thing to help with this though is to have a budget and stick to it throughout the entire year," Fouts said.

Just because it's your offseason, that doesn't mean you can't accomplish tasks and improve your business. Businesses should use this slow period to strategize, plan and train employees.

"The offseason is a great chance to study what worked successfully and what did not," said Jundt. "We call this our Start, Stop or Continue exercise. What should we start doing differently as a result of last season's performance?  What should we stop doing, and what should we continue doing?"

Brandon Stephens, president of Christmas Decor, also uses the offseason to think about the business's needs and set goals and profit targets for the next season.

"This might include calculating ideal number of clients to retain, adjusting the training process, ordering new equipment, conducting pricing evaluations, updating marketing materials, etc.," he added.

Stephens and Fouts believe the best way to stay profitable year-round is to find another business to offset the busy season.

"When you identify those endeavors, you want to choose the ones that you can purse using the same people and equipment you have for your core business," Stephens said. "This will help to reduce overhead costs and make it easier for you to market your new business to your current client base."  

Fouts agrees and tries to find services with similar equipment and materials. For example, his Christmas decor business has other purposes outside of the holiday season, such as other holidays and special events like weddings.

"Additionally, we look for businesses that also have offsetting offseasons, and build upon our current offering to better serve our clients," he added.   

"Diversifying services of a seasonal business can create annual stability," Stephens said. "If I have an employee that can perform a variety of tasks for all seasons, that person creates more value to the company and can be shifted as the need arrives."

Toffer Grant, founder and CEO of prepaid business Visa provider PEX Card, recommends 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."

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

Saige Driver

Saige received her Bachelor’s degree in Journalism and Telecommunications from Ball State University. She is the social media strategist for Business.com and Business News Daily. She also writes reviews and articles about social media. She loves reading and her beagle mix, Millie. Reach her by email, or follow her on Twitter.