Would-be entrepreneurs may be nervous about starting a business which thrives in one part of the year and is at risk of withering in another.
Rest assured, it can be done. Here are a few quick tips on how to handle your seasonal business throughout the year.
Keep your social accounts active, even during the off-season
It’ll help to keep your followers around and encourage them to think of you when it’s peak season and your sales are active again. Make sure you work on your marketing strategy to maximise your traffic and interactions too.
Partner with a venue or other company who needs your products at other points at the year
This can help you to diversify your offering. For example, if you’re a company that sells warm clothing, could you target companies in other parts of the globe during the British summer months? Australia and South America are good examples.
Sublet your space
If you run your business in a physical space, sublet your premises when you don’t need them. Check with your landlord if this is a possibility first.
You should be networking all year round, but this is especially true off-season. Find people who will give your business a lift when you’re less busy, like an accountant or business coach.
Sort out the practical stuff
As well as social media, plan the practical elements of your business like staffing, inventory, maintenance and supplier. Take a look at what your best sellers were during peak season, how supplier costs are changing and the predicted trends in your market for the coming year.
How the entrepreneurs have cracked it
Anna Jordan speaks to four entrepreneurs about they run their seasonal businesses.
Baboo Gelato‘s founder Annie Hanbury celebrates seasonality and lets her staff relax more in the winter.
There are few businesses more seasonal than the ice cream business. As an artisanal producer on the Dorset coast, more than 80 per cent of our sales come between April and September. The trickiest challenge for us is how to retain flexibility in staffing while maintaining our core team. Cash flow is also difficult as many of our costs like rent are fixed and we need to build up raw material stock during our leanest period.
We have three responses: accept it, celebrate it or fight it. Firstly, we have to accept that our business is always going to be seasonal. It is ludicrous to expect that a beachfront kiosk can sell as much ice cream in November as August. It is critical that we structure our model around this, building the most flexible cost base possible.
Getting the cash flow right
This means having a relatively small core team that are permanently employed. We have sophisticated recipes which take time to learn, so we need to maintain a highly-skilled and happy core team.
We supplement this with a much larger seasonal team. In April each year we recruit our gang for the summer, usually students who have worked for us or who have friends or siblings that have. We offer them generous retention bonuses if they work the whole season, so although they are only seasonal employees, they are still loyal and dependable. This is very important as we want to stand out for our friendly and professional service.
Cash flow is a challenge, particularly as we are growing so fast. We groan when yet another bill comes through in January for an event in August, but this is the reality and we have to embrace it. We would like to take on a short-term loan to cover this mismatch, but that is typically not available to a small company, so we have to build up a nest egg over the summer.
The key is disciplined cash flow planning. We use cloud accounting software for our accounts as it gives us an instantaneous view of our business and is so user-friendly that it doesn’t need to be filtered through a bookkeeper.
Secondly, we celebrate seasonality. We don’t believe in the ‘always available’ mantra of supermarkets, with their cotton wool strawberries in December. We buy our ingredients when they’re at the peak of their season, make them into ice cream and when it’s finished, it’s finished.
Looking after the staff
For our permanent staff we try to make the winter a time to recoup energy and have fun. The manufacturing employees get to work a four-day week (on the same annual pay) and work short days during the winter. They can also take ample holiday during this period.
Work is relaxed. There are lots of sessions of experimentation and tasting. This is a big contrast to the summer when we’re working seven days a week with all hands to the pumps.
The low season is also when we can take time to review our recipes and design new flavours. It gives us time to visit our trade customers and discuss plans for the coming year. We travel to Italy to the Gelato World Trade Fair to get new ideas, meet suppliers and have a much-needed break – yes, for us a holiday is eating ice cream in Italy and talking about ice cream!
Although we recommend embracing seasonality and tailoring one’s business model to it, we do also try to fight it by finding counter-cyclical customers and flavours.
Surprisingly, we’ve added more new trade customers in October than August. There are also customers like cinemas and theatres that are busier in the winter than the summer, so they’re a focus for us.
All in all, we enjoy the seasonality of our business; the challenges are outweighed by the enjoyment of the ever-changing flavours and the different rhythms of the working year.
Chris Rea from Harlyn Surf School in Cornwall runs other classes and courses to help keep his business afloat when it’s chilly outside.
We specialise in providing stand up paddleboard (SUP), surfing and coasteering instructor training courses as well as beach lifeguard training courses throughout Europe. In addition, we offer SUP adventure holidays to Scotland, Nepal and Norway.
The main challenges we face are staff retention and cash flow issues. It’s a very short season, so it’s hard to make a profit and secure shoulder month trade. We also struggle with lack of affordable accommodation for school groups, rising expenditure costs, licences, insurances and kit.
Our season runs from Easter to the end of October and we are shut during the winter months – enquiries start coming in by mid-January. We have had to diversify to help sustain a reasonable level of cash flow; I also run a water sports training company during the off-season.
“We carry out limited ad word campaigns and focus more on TripAdvisor and Google reviews for our local area”
Our cash flow is managed mainly through overdraft facilities and deposit payments from school and corporate groups that book with us. We need to be pretty regimented with our summer income and allocation of expenditure to help us survive the off season too.
As for staff, I have a full-time manager that is employed on an annual contract. Once the season starts, we recruit staff for the main season. These can be from the ski industry where timing is perfect as the ski season finishes mainly in April. Other staff are university students and I also get to cherry-pick potential staff from the training courses that I run in late autumn and early spring.
There is a joint marketing effort between ourselves and a third-party digital marketing agency. This involves targeted Facebook campaigns, Instagram posts and links with third-party providers. both nationally and in the local area. We use leaflet distribution companies and focus on building relationships with quality accommodation providers within our local area.
How cash flow shapes our marketing
Cash flow dictates how much we can spend on campaigns. Unfortunately, we are not in a position to spend as much as we know we probably need to do, so we rely on organic search results and have achieved 1st page visibility and often #1 ranking for much of the services we provide.
This has been achieved from having been in the industry for over 20 years. We carry out limited ad word campaigns and focus more on TripAdvisor and Google reviews for our local area. There has been an explosion of surf schools during the last decade with most beaches now hosting a surf school, so our focus is on being recognised as the #1 activity provider for visitors within a certain radius of our location.
Carina Lawson’s company, Ponderlily, sells planners. It focuses on other products during the slower months.
Managing mindset is a key challenge in my business – it can be quite easy to have a myopic view of where you are during a slump. This is why you should make sure you have an annual plan in place so that you can prepare for peaks in your industry.
Globalisation is prevalent to businesses of all sizes, so working with manufacturers across different time zones and different continents can be difficult because they may be closed when it’s your peak season. To counteract this issue, it’s important to work with multiple suppliers who will be able to deliver during our peak seasons.
Standing out from the crowd when peak season comes is important. It’s crucial to have a marketing plan in place that will deliver when all businesses are competing for the same spot.
I look at trends from the previous years to help me forecast for the year ahead. As the founder and managing director, I also know the importance of regularly revisiting our strategy.
At Ponderlily, our business strategic plan isn’t something we need to dust off at annual meetings; instead, it’s a living document we refer to at the start of every meeting. During the times when things are quieter in our business, we make sure that we scale down to what’s financially necessary to run our business profitably. For example, subscription services to key software are turned down to basic instead of premium plans.
We have a range of products which are evergreen and can be sold throughout the year. This helps generate an even income stream we can operate with.
Of course, we need to keep our spirits up during slower months and make sure that we’re giving ourselves a break to think of innovative ideas and initiatives we want to actively pursue.
Managing cash flow with data
I’m a business analyst by training, so I rely heavily on data to manage our cash flow efficiently.
In the stationery industry, we typically work six months in advance to manufacture a line of products so we can pinpoint exactly when payments need to be made and when we need to invest to market our product line.
We use an automated accounting system for accounting purposes. Making certain we track all our expenses and income is absolutely key. This allows us to centralise our budget and know our financial needs for the following year. We’ve found that checking our accounts on a monthly basis gives us a very clear picture on the overall health of our company.
The importance of holidays
We’re lucky that Ponderlily is a family business and we don’t mess around with our family vacation! While we don’t work together in the same physical location, we discuss our vacation plans every quarter.
It’s great that we work ahead of time so we can anticipate when we’ll be away and manage it accordingly. This year, we’ll all be away for two weeks during Christmas, our peak season. We’ve known this for months, so we’ve enlisted the help of another family member to fulfil orders.
Marketing is at its peak during the holiday season and yet we don’t want to compromise our holiday to work all the time. To handle this, we will automate some of our marketing and make sure that we have a contactor to manage that for us.
We scale back on the number of marketing channels we use during quiet times but choose the most profitable one and make a higher investment there so we’re not out of sight.
We keep in touch with customers throughout the year and make sure we deliver a lot of value to them during those times. We also use our off-season period to improve and/or implement new business processes. For instance, we chose October to work on our website just in time to begin our busy season.
Lastly, but perhaps the most importantly, we use quiet times to make space to refresh and renew our business by taking some real time off. This gives us space to seek inspiration, think of ways to really connect with our customers and create a real and lasting impact with our business.
Vicky Lopez is co-owner of De-Ice, a gritting and snow clearance firm. She talks about the inherent challenges of staying interesting and relevant all year.
Obviously, managing budgets and costs when you are only invoicing for five months of the year is a challenge.
However, we always look holistically at the business and our growth and investment is sustainable.
While our service provision is only focused on five months of the year our business operates all year long. The necessary planning, maintenance and sales cycles are such that when winter hits we are prepared. We have to aim for a right-first-time approach to get the most out of our short service period.
Sometimes, no matter how much you plan, there is something that pops up needing paying or investment and a solid relationship with your bankers are important to riding some of those storms. Where possible I would go with a bank that still have business/relationship managers; invite them into your business so they can understand more about what you do and where you might struggle.
“We have to aim for a right-first-time approach to get the most out of our short service period”
Don’t be afraid to ask for help they are in the business of helping businesses. Investment should be made into the maintenance and upkeep of key machinery – planning for a replacement part must be on your agenda well before it stops working two days into your biggest job of the year.
Having something interesting to say
We are a slightly different business as our winter season has a definitive beginning and end date, so we retain off-season customers by trying to be as visible as possible and always having something interesting to say. Building relationships takes time and is sometimes hard work.
Keeping low level marketing that can be done by a current staff member during your off-season is a good way of maintaining your presence without wasting investment. When you do invest, ensure you measure the ROI as closely as possible so you don’t waste money.
Our staff are professional people and our service is a valuable addition and sometimes a necessity in keeping businesses moving, therefore we can engage with our clients throughout the year but understand their focus is not always on winter gritting during July and August.
The core staff work in the business all year and, as the focus shifts from month to month, they generally find this interesting and are able to keep motivated as they are not doing the same thing every day. For the seasonal staff, ensure you leave enough time to recruit. Too early and you may have to wait until they are available. Too late and they may well have other placements by the time you get round to contacting them.
Keep conversations going and don’t assume they are just sitting at home waiting for you to call. Be clear in what you want, when you want it and how much you are willing to pay.