Position yourself for growth in 2017—join us live at the Entrepreneur 360™ Conference in Long Beach, Calif. on Nov. 16. Secure Your Seat »
April is the cruelest month. April, and maybe May.
At least, those are the months when sales dip for Humes Crafts LLC in Manhattan, Kansas, because local craftspeople put away their needlepoint and stenciling projects and pick up their trowels to plant their gardens.
Or maybe it's November. That's the month when the various businesses that comprise Joy and Gaylord Staveley's year-round mountain resort in the Grand Canyon are closed. Among the Staveleys' Canyoneers Inc. businesses are a whitewater rafting operation, a summer lodge, a country store, a winter cross-country ski center and a campground.
Early December is not a great time for the Dixie Flag Manufacturing Co. in San Antonio, either. Although he's creatively managed to find work for his company in every other month of the year, president Pete Van de Putte Jr. says he just can't seem to get Texans to buy flags at Christmastime.
Maybe every month has a little cruelty in it. John Hexter of Hudson Integrated Products, a Stow, Ohio, business forms and printing distributor, says he can't quite put his finger on when his downtimes are. He thinks they may be pretty closely related to his customers' vacations. When they go away, they don't order his custom office documents--but as soon as they come back, they want them yesterday.
Downtimes are business bogeys, those strange times during the year when the phone just doesn't seem to ring. Has everyone gone on vacation? Is your phone broken? Have you done something to scare everyone off? Not likely. It's probably just a cycle, caused either by the particular fluctuations of your business or by some outside force such as a change in the economy. The first thing you should know about downtimes is that you're not the only one who has them.
In fact, in many businesses, even ones that aren't obviously seasonal, downtimes are quite common. For example, most people in the crafts business, says Jerry Humes, owner of Humes Crafts, know about the April-and-May problem. Serendipitously, the downtime happens to come several months before the fourth quarter, when sales at Humes' 22-employee retail store are at their most brisk, so he uses the time to take inventory and prepare for busier months.
But even if downtimes are neither obvious nor public information, experts say being aware of and prepared for them is essential to business success. If you're considering starting a new business, don't be afraid to ask potential competitors about the downtimes associated with it. They'll probably be more than happy to share that information with you. People like talking about themselves and their businesses, particularly about things that might be discouraging to the competition.
Down, But Not Out
Some experts say that downtimes should be seen as signposts of opportunity. Management consultant Earl Eisenberg, president of Eisenberg & Associates Inc. in Chagrin Falls, Ohio, says he recently persuaded a manufacturing company with an obviously seasonal schedule to make better use of its downtime. Instead of living off the profit from your high season, he told the company, make another product at cost during the low season so you can at least pay your bills for the rest of the year.
"What it is is taking the blinders off and getting a wider look at your company," Eisenberg says of the benefits of scrutinizing your downtimes. "You specialize in selling to this or that industry? Well, that's dandy--but there are 12 other industries that might buy from you that have different seasonalities."
Van de Putte has followed that strategy, too, actively looking for times during the year when things are slow. "I put my ear to the ground," he says. "What's going on during the time of year when I'm not so busy? I would submit there is something going on year-round--not the same thing, but something."
When Van de Putte took over the company from his parents nearly 17 years ago, the high season stretched from Memorial Day to the Fourth of July, and the briskest business was in U.S. and state flags. Thanks to Van de Putte's efforts to pinpoint other markets, trade shows in the winter, followed by spring and fall conventions and festivals, are now where the company makes its biggest sales. Van de Putte has also added an on-site retail store and expanded his product line to include custom flags.
Ironically, Van de Putte has been so successful at dealing with downtimes that he now has new problems with staffing and inventory. "One ongoing problem is that as we've gotten bigger clients, our rushes get more intense," Van de Putte says. He has been working with his sales staff on developing more efficient ways to assemble inventory during these rushes.
"[Another] problem is taking care of our bread-and-butter business when we're doing a large convention," Van de Putte says. "We've tried a number of strategies. One thing we've done is cross-train and redistribute people, so a seamstress might help with cutting, a cutter with art, and a salesperson with packing. It's helped us balance our workload. We're still playing with it."
Eisenberg suggests you take seasonal concerns into account even when hiring new employees. For example, try to determine if potential workers are flexible enough to be easily cross-trained.
Staffing issues aren't the only thing to take into account when dealing with downtimes. You should also try to negotiate terms with your bankers and suppliers according to your seasonality. If fall and winter are your high seasons, for instance, arrange with your bank to make interest payments plus double principal during those six months and pay interest alone during the rest of the year.
Making The Most Of It
Not every entrepreneur wants to eliminate downtime, of course. For some, the slow season offers a time to take stock of their business's progress or handle other tasks that get pushed aside during the rush.
Hexter has avoided buying his own printing machines because of business cycles. "I could have a lot of [machines] in my shop that I own and that I'd have to keep busy," he says. Instead, he prefers to contract out the printing, with his 85-person company acting as a broker.
"If it's slow, I'll go out and play a round of golf or put on the answering machine and go out and make sales calls," Hexter says. "If I had a lot of [machines], I couldn't do that."
Other companies use downtimes for employee training sessions or even for a planned business shutdown. When in doubt, ingenuity helps. One particularly slow November, Van de Putte asked employees for suggestions on what to do. "I said, `We really don't have a lot of stuff going on. What would you like to do?' They got real creative and started making Christmas ornaments," he recalls. "It was something to keep them busy, and it generated extra cash."
Creativity was the key for the Staveleys, whose problem was that they couldn't expand during their downtime because there was no business to expand into. The whitewater rafting season is set according to federal guidelines, Joy Staveley explains, so they can't start early. And they can't keep their lodge open in November because the other businesses in the park that might help draw customers and support volume are closed then.
Back when their winter ski operation was just getting off the ground and hadn't yet begun producing much cash, the quandary kept Joy, the company's COO, up at night. She dreamed of a schedule that would pay the bills year-round for the Flagstaff, Arizona-based company and keep her from having to give up the precious part-time employees she hires every summer and fall. The Staveleys' firm employs around 50 people at peak season--in midsummer--and about half that in the winter season. The couple used to have to take out bridge loans guaranteed by the mortgage on their house to keep the business afloat from November through February.
Consultants for businesses that are based on weather advise doing whatever you can to insulate the business from the downtimes--and even surges--caused by the weather. "The first thing you've got to do is analyze the circumstance that your business creates," says John Frado, founder of Nordic Group International, the Winchester, New Hampshire, recreation facilities consulting firm the Staveleys hired to devise a master plan for improving business at their cross-country ski center and country store. "Study the peaks and demand." Then, Frado says, find ways to use your facilities to capacity even if weather conditions aren't ideal.
Frado advised the Staveleys to winterize their summer lodge so it could double as their wintertime Nordic Center, expanding their ski season capacity. He also suggested expanding their peak summer season even more by using temporary shelters, called "yurts," to house overflow visitors. The Staveleys are also adding more rooms to make both winter and summer seasons more profitable.
Finally, Frado suggested the Staveleys expand beyond their traditional business to offer additional recreational activities such as mountain biking and horseback riding, or add educational programs where guests could learn about plants, astronomy or photography, or even go on archaeological digs.
As receipts have improved, Joy Staveley says, she has begun to view November differently. Instead of downtime, she now sees it as a time for planning, marketing, employee vacations and needed repairs on her various facilities.
She's also realized that her seasonal staffing problem wasn't really a problem at all. Once the ski center began bringing in more money and she was able to offer her summer part-time workers winter jobs there, she discovered they didn't really want year-round work and viewed their off-season as a perk rather than a problem.
Freed from her worries, Joy Staveley realized she could make her employees happier by paying them better during the months they do work for her. Now that the ski center is producing crucial extra cash, she and her husband have raised pay and benefits, particularly for their few year-round workers. And today, Joy actually looks forward to her downtime.
"It's a great relief to have a month on either end [of the season] when we can catch our breath and see where we're heading," Joy Staveley says. "What used to be a real problem has become a real breathing space."
And sometimes, a little space for creativity is all you need. "The biggest shortfall in American business is the lack of fun, the lack of humor," says Frado. "Have fun with it. Creativity is an outstanding tool when you're pushed into a corner--or a slow season.
Try it, and you'll agree with Joy Staveley: "Downtime has actually helped our business."
Jonathan Sapers lives in New York City and has written for numerous national and local publications.
Canyoneers Inc., P.O. Box 2997, Flagstaff, AZ 86003, (800) 525-0924
Dixie Flag Manufacturing Co., P.O. Box 8618, San Antonio, TX 78208, http://www. dixieflag.com
Eisenberg & Associates Inc., 375 Park Pl., Chagrin Falls, OH 44022, (216) 247-6696
Hudson Integrated Products, fax: (216) 831-9111, email@example.com
Nordic Group International, 259 Bolton Rd., Winchester, NH 03470, fax: (603) 239-6387
U.S. Chamber of Commerce, (202) 463-5503.