Seasoning Your Sales
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Each June, 450 children from across the country head for Camp Echo Lake in Warrensburg, New York. Under the guidance of 200 camp counselors and staff members, children, ages 7 to 17, enjoy tennis, windsurfing, rock climbing, backpacking, theater, woodworking, photography and other activities. Eight weeks later, campers and staff return home, and the 150-acre camp in the heart of the Adirondack Mountains is quiet once again--until next summer.
A mid-August break might be just what camp owners, brothers George and Tony Stein, and mother, Amy Stein, deserve. Rather than taking vacations, though, the trio immediately begins planning another camp season that won't begin for 44 weeks. As the Stein family has learned since founding Camp Echo Lake 50 years ago, running a successful seasonal business is a year-round venture.
"The lion's share of our work occurs in the summer, but don't think we don't have stressful days in October or May," Tony says. "That's when we're figuring out new programs and changes we can make to run an even more successful summer camp. When you're running what amounts to a small town with nearly 700 people for two months, anything short of intensive planning--months in advance--won't allow you to manage effectively."
Thinking about starting a seasonal business, one with a selling season that doesn't last more than a few months? Whether you're considering a river-rafting tour company, a cross-country skiing school, a business selling custom-designed Easter baskets or another seasonal enterprise, you'll maximize your peak season with proper planning. If you're starting a brand-new seasonal business, talk with owners of similar businesses. Ask how they hire seasonal workers, promote their products or services and prepare for their peak seasons.
Here are seven basic steps you'll want to take to guide your seasonal business down the road to success:
1. Review your past season. When one season ends at Camp Echo Lake, the Steins start planning another. They begin by evaluating the past eight weeks of summer camp. Head personnel submit written reports and recommend program improvements and staff to be rehired. "We look at the overall performance of each program," Tony says. "We want to know how many kids played tennis, baseball or archery, how often, and what their experiences were. We look at our food service and transportation, take an inventory of supplies and see what equipment needs to be renovated or replaced."
Campers fill out questionnaires, staffers are surveyed through the mail and, in October, random telephone interviews are conducted with parents. "The telephone interviews confirm things we already knew or point out things we hadn't given much credence," he says. "Most names are selected at random, but we add a few parents we know have negative feelings about the camp. You can always learn from people who liked your operation, and you can learn even more from those who didn't."
2. Evaluate areas for improvement. The Steins' next step is determining how to maintain or improve the quality of their seasonal business. In March, key staff members from around the country are flown to Elmsford, New York, for a weekend work session at the camp's off-season headquarters. "We review all the input from campers, parents and staff, and develop one or two general themes for improvement for the upcoming season," Tony notes. "For instance, Camp Echo Lake has a strong reputation as a nurturing and caring community, and that reputation is important to us. So we look at how we can enhance it." The same planning group meets again in early June. "That's when we take our general themes and develop specific game plans to implement the improvements we want," he says.
Finally, the results are presented at the annual staff-orientation meeting, two weeks before camp begins. "By the time camp opens in late June, the staff knows our expectations, who the campers are and what they want to do this summer," Tony says. "We've done our homework and have set the stage for a successful season."
3. Keep the cash flowing. Every seasonal business faces the perennial challenge of maintaining a steady cash flow throughout the year. Money is needed to pay ongoing expenses such as salaries, utilities, insurance and taxes. "Even though we deliver our service in the summer, there are plenty of costs built into delivering that service," Tony says. "Last September, we built two brand-new swimming pools. We have some cash reserves and could draw from them to pay for the pools and other improvements, but we prefer to operate out of our cash flow."
To generate cash when the camp is closed, the Steins require prepayment of the camp tuition. Parents pay a $750 deposit with their October 1 reservation. The $4,750 balance is payable in three equal installments in December, February and May. The Steins draw additional income during the off-season by hosting college sports teams' training camps and by operating wilderness and ski getaways.
Businesses that manufacture and market seasonal products for wholesale and retail markets have other ways of boosting off-season cash flow. Marge Dethloff, owner of Specialities in Wool, has a particularly short selling season for her hand-loomed Christmas stockings, which she's been marketing from her Montpelier, Vermont, home since 1986. While deparment-store buyers place their Christmas orders from January to May, and production of her stockings begins as orders are received, Dethloff doesn't collect payment for these orders until August or September.
To generate operating capital in the meantime, Dethloff appeals to her individual repeat customers by offering them a discount on last year's merchandise. "Few people are looking to buy Christmas stockings in the summer, so I create interest and some cash flow with a mass mailing to my retail customers for a special mid-February sale," Dethloff explains. She gets the names for her mailing list from customers who have purchased stockings in the past or have attended the craft fair in Burlington, Vermont, where Dethloff displays her Christmas stockings each fall.
The extra cash comes in handy to help Dethloff pay for the printing of an annual catalog, which she mails to wholesale buyers in April with a special promotion: Buy 12 stockings and get one free. Wholesale buyers who place their orders within 30 days pay last year's prices. "It's a great way to get cash to come in a little earlier," she says. Her promotions give Dethloff another big advantage: "If I can convince buyers to order early, then I can produce stockings for orders I actually have in hand, rather than for orders I project I'll get later on," she says. This information helps Dethloff more accurately plan her production schedule and make work assignments with knitters she hires as independent contractors to produce her stockings.
Another way to augment your seasonal business's cash flow is to introduce a sideline product during your off-season. At Pumpkin Masters Inc. in Denver, the company's main focus is high-quality pumpkin-carving kits, which generate about $7 million in sales annually. Because most of the company's revenues are received during the fourth quarter of the calendar year, vice president Kea Bardeen has introduced watermelon-carving kits to generate summer sales. "This helps improve our cash flow by giving us a product we can sell before Halloween," she explains.
4. Recruit employees. Running a seasonal business can mean scrambling to find qualified staff members to fill temporary positions during your peak season. At Camp Echo Lake, contracts with former staff members are written and signed by January for the next season. In January, the camp's full-time recruiter begins visiting universities and job fairs to hire more camp counselors. The Steins also receive employment inquiries via their Web page, and run ads in publicatons such as Nursing Journal and Backpacking Magazine.
At Pumpkin Masters, where much of the company's product is produced by outside contractors, Bardeen has less need to hire a large temporary staff for the busy season. "We might hire a few individuals to answer phones and carve pumpkins," she says. Instead, Bardeen's 14 permanent employees meet the business's needs by periodically performing different tasks. "We're a small company and have a need for our employees to perform a number of different tasks during the year as the demands of our business change," Bardeen says.
One employee, for example, manages the company's media relations and promotional efforts, such as arranging for Bardeen to demonstrate pumpkin-carving techniques on national TV shows such as "Today," "Our Home" and "News for Kids." When the employee isn't busy with promotional assignments, she assists Bardeen with product development. Another employee, who's responsible for personnel, works with the company's independent sales representatives during the selling season and also works on promotions, including pumpkin displays.
5. Maintain customer contact. To ensure strong repeat business year after year, develop plans to stay in contact with customers beyond your peak selling season. As Dethloff has learned, off-season sales of her Christmas stockings are a great way to stay in touch with her customers. Also consider offering your regular customers a sneak preview of your new merchandise, and let them purchase items at an attractive pre-season discount.
At Camp Echo Lake, the Steins maintain year-round contact with campers, parents and staff by publishing a quarterly newsletter. They also host winter alumni gatherings for campers in Montreal, Washington, DC, and the New York City area. "We don't advertise the camp or participate in camp fairs. Rather, our marketing efforts rely primarily on word-of-mouth referrals," Tony explains. "Staying in contact with campers and their parents throughout the year helps build those referrals."
6. Take care of housekeeping. Need to update the computer programs you use to manage your seasonal business? Time to rethink how you promote your business' selling season? Need to write new job descriptions before you advertise for temporary help? The best time to accomplish these and other tasks is, of course, when you're not in the heat of your peak season. "Some people believe that when their peak season ends, they don't have to work or think about their business," Tony says. "Not true. Do your thinking and planning when you're not behind the eight ball. Once your busy season begins, the day-to-day demands of running your business will take precedence."
7. Plan year-round. Dethloff doesn't think twice about preparing months in advance for her company's big pre-Christmas selling season. The benefits, she says, are considerable. "The earlier you can start planning, the less reactive your marketing will be and the more control you'll have over your sales and production," says Dethloff. "The best time for any seasonal business owner to start planning next year's season is today."
Carla Goodman revealed the secrets to sparking your imagination in the September issue of Business Start-Ups.
Camp Echo Lake, 3 W. Main St., Elmsford, NY 10523, (914) 345-9099
Pumpkin Masters Inc., P.O. Box 61456, Denver, CO 80206
Specialties in Wool, HCR 32, Box 100, Worcester, VT 05682, (800) 242-9427