Running a Seasonal Business
Find out what smart tactics these entrepreneurs use to ensure the success of their seasonal businesses.
No matter what industry they're involved in, most businesses have seasonal highs and lows. Yet like Santa, some companies--summer camps, ski schools and Christmas stores, for example--depend heavily on the revenue generated during a single season to carry them through the year.
Typically, seasonal businesses fall into one of two categories: those that can shut down in the off-season and those whose owners have to find another way to maintain cash flow during the rest of the year.
Scott Stillings' business firmly falls into the first category. Owner of Winter Sports School at Nub's Nob ski resort in Harbor Springs, Michigan, Stillings says his business is a model of great cash flow. 'This is such an open-and-shut business," he says. "We balance our books every week, pay every bill and everybody each week, and when we close the door at the end of the season, we know right where we stand. There's no carryover.'
The staff begins preparing in September for the ski and snowboarding season, which begins on Thanksgiving weekend. Stillings says opening day is the school's busiest, followed by the days around Christmas and then President's Day weekend. "Then we stay at a manageable cash flow level [the rest of the season],' he adds.
Because there's not much inventory and no permanent staff--Stillings hires more than 100 instructors each season--the doors close the second weekend in April each year. 'In April, we try to finish everything for the year and hash out what we should do for next year while it's fresh in our minds," he says. That includes updating literature, brochures and the website, so people can always access the next season's information.
"Then we don't do squat until August when we stuff brochures into envelopes,' says Stillings. 'Most years, I can take the whole summer off if I wanted to. If it hasn't been a good year, I can always strap my guitar to my back and go off and perform as a soloist or in a band.'
'Obviously, in a [seasonal] business, you need to budget carefully to make sure you don't overspend or extend yourself past your capabilities,' says Dennis D. Vourderis, who, along with his brother Steve, owns Deno's Wonder Wheel Amusement Park on the boardwalk in Coney Island, New York. 'Maintenance, taxes and equipment financing all need to be based on a 12-month year, so you need to know you'll have enough funding to cover those expenses during the time you have no cash flow.' Having good credit, he adds, is a necessity in a seasonal business.
For the Vourderis brothers, whose parents purchased the amusement park and the Wonder Wheel--a Ferris wheel built in 1920 and declared a New York City landmark in 1989--the busy season runs from April to October. 'We face the beach, so we're 100 percent driven by the weather," Vourderis says. "If the sun comes out, people come to the beach, the boardwalk and the rides. If it's raining, it's not even feasible to open." Since a year's worth of business gets squeezed into six months, every sunny day counts. Vourderis uses July 4 as a benchmark for being in the black.
During the off-season, Vourderis stays busy, as he, his brother and their trained staff dismantle the seats and other parts of the rides and store them in a warehouse where they're painted and undergo maintenance, repairs and inspection.
Maintenance, repairs and painting also occupy the winter months for Jay Kandle and his family, who run Lake Kandle Campgrounds and Swim Club in Sewell, New Jersey. 'We like to winterize in October, right after we close," says Kandle. "We also take care of the pool, put away the rescue equipment for the lifeguards, do landscaping maintenance, rebuild old picnic tables and so on. We prepare for the coming year like farmers.' Kandle dedicates his entire year to the business, despite the fact he's only bringing in money from the campsites and swim club for close to eight months of it.
From tax planning to hiring staff, Kandle spends October through March gearing up for a season that will involve approximately 2,000 swim club members and campers visiting the 150 camp sites on nearly 20 acres. One thing that helps keep the Kandles in the black is the additional income they generate from renting out 40 additional acres of farmland, which, along with the campgrounds, have been in the family since 1892.
'My father and mother had the dream of opening a swim club and campground,' says Kandle, who has taken a slightly different approach to running the campground than his parents did. 'In my parents' day, January would have been a lean time of year. But by marketing the swim club to attract more business and taking deposits now, we're able to increase our cash flow during the off-season.'
Making Use of Free Time
The off-season is also a time for seasonal business owners to handle the important decisions that'll affect business the upcoming season. 'From a managerial standpoint, I try to break the business into two interrelated areas, the business side and the operational side,' says Ron Weinhold, general manager and head of operations at two Cal Ripkin baseball camps and tournament facilities in Aberdeen, Maryland, and Myrtle Beach, South Carolina. "The height of activity on the sales side is between October and June, and the height of activity on the operations side is between March and October. So even though our business is considered seasonal, it's very much a year-round operation, with key decisions made during the winter months."
The camps are also slightly different from some other seasonal businesses because of increased cash flow during the months preceding the camps. While the official camp season is visibly the busiest, off-season registration generates the bulk of their income.
Switching Gears in the Off-Season
Although many seasonal business owners are able to ride the revenue wave through the off-season months, some owners opt to switch gears. Whether it's to maintain more consistent cash flow, better utilize a retail location or create a little peace of mind, some seasonal business owners have alternate plans for the off-season.
The Christmas Dove stores in Barrington, New Hampshire; Ogunquit, Maine; Boston; and New Orleans, don't close down after the holiday, but instead undergo a transformation, capitalizing on consumers' interest in decorating for other holidays throughout the year.
"Halloween has become huge with people decorating their homes inside and out, going to parties and giving gifts," explains Garth Svenson, who now runs the family-owned business started by his parents. "People also decorate for Valentine's Day and put up lights for St. Patrick's Day and the Fourth of July."
Supplementing the biggest annual shopping holiday without straying too far and losing the Christmas store following has been a balancing act. But by taking advantage of consumer demands, they've been able to turn what was primarily a Christmas business into a year-round celebratory store.
Jan Axel, a long-time sculptor who took to landscaping after moving from Manhattan to South Salem, New York, supplements her Delphinium Design landscaping business with holiday decorating services. 'As a landscape designer, I found it got very slow in the winter, so a colleague and I started doing holiday decorating,' Axel explains. Together, the two started Cirque de Botanica, a separate holiday design business. 'It was a natural spin-off, and the immediate gratification makes it very appealing. A lot of what we do as landscapers takes so much time; sometimes it's years before we see a finished product mature.
Besides filling a creative niche, Axel's off-season business also bridges the gap between the planning and design phases--which can take place in the fall--and spring and summer, when her planting crews are out in force, sculpting a wide range of residential gardens and landscapes.
The Year-Round View
With 13 stores in seven Eastern states, selling outdoor patio furniture peaks for retailer Patio.com during the spring as warm weather approaches. Then, as the weather cools and entertaining moves inside, there's a drop in sales.
To avoid having to lay off any of its full-time employees during the slow season, 10 years ago the company began offering top-of-the line pool, ping pong and foosball tables, as well as bars, barstools, and bar tables and chairs in their store showrooms during the fall and winter, transforming a seasonal business into a year-round enterprise.
In fact, the off-season pool table business has become so successful that Patio.com has become the world's largest Brunswick Pool Table dealer. 'It's taken a tremendous amount of work and a lot of training, but we've been able to turn Patio.com from a seasonal company into a successful year-round business,' says the company's co-CEO Mitchell Ross. "All the salespeople have become experts in both patio furniture and pool tables. Our entire delivery staff now knows how to do pool table assembly and repair." In fact, they've been so successful at blending patio furniture and pool tables that Ross has wondered whether they should now call the business 'PatioandPoolTables.com.'
Whether your seasonal business is one that sustains you through the year or requires an off-season transition, it can provide great diversity--and even a little downtime--if you master the art of careful planning, scheduling and pacing yourself for the full calendar year.
Rich Mintzer is a journalist and author of more than 80 nonfiction books, including several on starting a business and a dozen for Entrepreneur Press. He hails from Westchester, New York, where he lives with his family.