Many businesses thrive in the summer months, especially if they operate in vacation areas that benefit from lots of tourists. However, for many other businesses, summer is their off-season. Operating a small business during off-season months can be challenging and stressful, especially if you’re not sure how to bring customers through your doors.
Fortunately, hope isn’t lost for seasonal businesses! There are plenty of strategies you can use to maintain a stable cash flow and keep customers coming to generate consistent profit. Use these six tips as you prepare for your off-season.
- Build a cash flow strategy: Managing cash flow is priority number one for seasonal small businesses. Because you won’t have as many customers patronizing your store in the off-season, you’ll need to be mindful of how much money is coming in and going out each month. Examine your cash flow and be diligent about plugging financial leaks, minimizing unnecessary expenses and collecting past-due invoices promptly. Remember, cash flow management might be difficult during your first year of operation but should get easier once you have seasonal data to examine.
- Offer off-season incentives: Your business may be able to bolster off-season sales by giving customers an incentive to purchase your products or services early. Consider hosting end-of-season sales to move last season’s inventory and bring customers in with a promise of a good deal. You might also encourage early service sign-ups by offering a discount or maximizing your service package for off-season buyers.
- Utilize payment plans: It can be tempting to rake in as much cash as possible during peak season, but this type of strategy puts your business in a series of extreme highs and extreme lows in terms of cash flow. If your product or service line is amenable to it, consider offering extended payment plans to customers who purchase during peak season. This can help space out your business’s income, offering more predictable and stable cash flow through the off-season.
- Diversify your product line: If your business’s current products or services are largely seasonal, get creative and think about how you could diversify your offerings to be more relevant in the off-season. New products or services that are in an adjacent industry may allow you to use your existing equipment and skill sets with minimal transition. It’s easiest if this new product line is ideal for the opposite season, meaning you’ll be able to focus on one, then the other routinely throughout the year.
- Expand your sales area: Some businesses are forced into operating seasonally because of customer behavior in their geographical location. If this applies to you, consider how you might sell your products to customers in other regions where it might be peak season. You might be able to open an e-commerce store and ship directly from your location or drop-ship products with little to no added expense.
- Lean into off-season marketing: When business is slower in the off-season, use your extra time and capacity to identify new clients and market to them. Craft an off-season sales and marketing strategy and focus on building strong business relationships during this time. You might close a big sale in the off-season itself, or you might ensure the client returns during peak season.
Navigating the off-season can be challenging for small businesses—particularly ones that have recently launched. Having a capitalization strategy in place can ensure that your business maintains a stable cash flow, even if foot traffic and sales are slow. Reach out to Tenet Financial Group today to learn more about SBA loans and ROBS funding strategies to keep your business running strong.