There are a few unique challenges to owning and running a seasonal business: preparing for the busy season, making the most of your busy season and making sure you have enough money to cover the offseason. Planning and managing your business’s cash flow is essential to sustaining a successful business. Here are 6 things you can do to increase and manage your business’ cash flow throughout the year.
- Fully know and understand your business. If you don’t have a business plan, create one. A great way to learn the ins and outs of your business is by studying your competitors. Be honest about the seasonality of your business and what products and services sell during which time of the year.
- Keep a calendar. Efficient record keeping will save you time and money. Note when all expenses are due throughout the year (e.g., payroll, utilities, inventory, rent, etc) and match your incoming revenue to cover these expenses.
- Budget, plan and forecast. Figure out how much revenue you need to make money to cover your operational expenses and make a plan to save. Looking at past financial statements, forecast your company’s expenses and revenue for the next 5 years. This will show you where you need to save and possibly where you can cut back on costs.
- Staff appropriately. Having the right staff is super important, but be aware of the costs required to have full-time employees. Consider hiring seasonal employees or consultants during the busy season that compliments the full-time personnel. Full-time personnel should operate in multiple capacities to keep the business running smoothly and efficiently. If your busy season falls along summer or winter, consider hiring high school or college students.
- Add additional streams of revenue. Enhancing your current products and services is a great way to add additional income to your seasonal business. Consider tailoring your services or offering a personalized and private experience. Offering in-person lessons or online classes or courses that tie in with your business is a great way to increase your cash flow while staying within your expertise.
- Think about outside financing. Having a business line of credit or a credit card is not a bad way to cover expenses during your offseason especially if you negotiate terms with your lender. Being able to pay lower fees or premiums during your offseason and then make larger payments during your busy season will help to even out your cash flow. These arrangements are common with vendors and suppliers as well so don’t be afraid to ask.
When owning and maintaining a seasonal business, focus is a necessity. Properly using your offseason to plan, practice and implement will ensure success during your busy season. For more advice on how to manage your business’ cash flow, contact Growth Capital Team today.