Most companies experience seasonal surges and dips in revenue. For example, online retailers may enjoy higher sales during the holiday season than they experience in August. However, some businesses really focus on seasonal items, so they collect most of their revenue during a certain set of weeks during the year. Some examples of seasonal businesses include Halloween costume stores, Christmas tree farms, and even swim shops.
4 Tips to Manage Seasonal Companies
During the off-peak season, these companies may not take in much revenue. So, while some of these companies may do very well overall, they face challenges when they need to manage operating costs during slow parts of the year. Employees still need to get paid, products need to get manufactured or stocked, and other fixed expenses must get handled. Consider these tips to help your seasonal business prosper during the on-season and the off-season.
1. Understand Your Industry’s Seasonal Cycles
You can only be ready for seasonal cycles if you prepare for them. People who own successful Christmas tree farms probably don’t expect to sell a lot of trees in January. This means they plan for a drop in revenue and therefore manage operating expenses with this in mind. These low-revenue periods might be the time when seasonal companies make repairs, plan for production, or even schedule vacations.
If your company is fairly new, you should probably consider industry-wide data for other companies in your industry as it can be difficult to plot trends when you have little to no actual information about your own business. [Read more…]