As we approach the corner of a new season--both back-to-school and autumn--people's minds automatically turn to a new buying season. New clothes, school supplies, new decorations for the home, pumpkins, seasonal foods, Halloween costumes. There's a lot to buy, and many opportunities for a seasonal business to boom.
Operating a seasonal business holds its own set of obstacles. There's the gearing-up time before the season begins, the long hours during peak season, wrapping up the business at the close of season. Operators have to consider marketing timeframes, finding employees willing to work the condensed season and long hours and a facility willing to rent seasonally.
A marketable idea and the ability to capture the shifting desires of consumers from one season into another make a seasonal business potentially lucrative. With the right planning and budgeting, you can make your seasonal business a boom that sustains you for the year.
Define Your Cash Flow
Defining what "seasonal" means to your business is tricky. You may have a peak season, but is your business one that you truly shut down during off season, leaving you to rely on your profits from the season to last the year? Or do you diversify the rest of the year to maintain consistent cash flow?
Service-based businesses with little inventory and non-permanent staff can often shut operations down with greater ease. It takes discipline and strong budgeting, but can allow you extended time off until your season starts up again. If you're attempting to ride through slower months by diversifying, the SBA offers a seasonal line short-term loan program, and there are alternative lending options that suit short-term financing needs.
Though your operations may shut down after the season ends, the planning and marketing continue. A campground may close for winter months, but take reservations and payments for the upcoming season. Mailings in advance of a store opening, summer camp registration, winter snowboard lessons or a landscaping service are sent out in advance of the season. The off time also gives you opportunity to improve your service, streamline operations, service equipment and train new employees.
Cover Your Legal Bases
Seasonal or part-time operations don't excuse you from the regulations, tax burden and licensing requirements that apply to year-round businesses. Often a business arises out of a hobby, and as sales improve or the business grows, the owner gets caught up in improved sales and busy days without stepping back to ensure insurance policies are up to date, he or she is meeting workplace health and safety regulations, and paying proper business taxes. Small business resources like SCORE can help the seasonal business owner ensure he or she is following the proper guidelines to stay legal.
The Art of Living Lean
Entrepreneurs choose a to run a seasonal business for a variety of reasons: as a supplement to full-time employment, to capitalize on consumer's spending habits on seasonal items or services, to fulfill a creative outlet they don't have in their regular employment, or to enjoy an extended off-season without a 9-5 grind. Whatever the reason, seasonal business owners must learn to be lean. Unsold inventory is a liability at the end of a season, so careful attention to inventory management is crucial. Spending too much with a supplier cuts into profits that may have to sustain for a year.
Becoming a seasonal entrepreneur requires exceptional discipline, attention to balance sheets, financial and time-management planning and expertise in the industry that fuels profits for a short window of time. The returns, however, can be exceptional: months of relaxation and freedom, time to pursue other interests or a lucrative side business.
Are you a seasonal business owner? What have you found to be the pitfalls and benefits of running a seasonal business?