How to Survive the Peaks and Valleys of a Seasonal Business
The parties often went late into the night, with up to 150 friends milling about their pool, gathered around the piano, singing, talking and laughing. Scott Jones and his partner, Kell Hicklin, loved entertaining. So when they decided to tank their respective careers in marketing and human resources, the couple determined it was time for a complete change. They bought a then-failing seasonal inn and restaurant on Martha's Vineyard.
"She was just an old girl that was all rough and worn out and needed somebody to love her," Jones says.
With a new name on the inn's sign--Lambert's Cove Inn & Restaurant--Jones and Hicklin spent two years and $1.5 million of their own money to renovate the property.
"We thought, How much harder can this be than throwing a big party? It still sounds stupid as I say it again even now," Jones says. "It's like a never-ending party, especially the restaurant part. It's like you have continual houseguests."
But he and Hicklin thought they would be able to keep the houseguests coming for far longer than the Vineyard's traditional summer season. That, they soon learned, was a mistake. It's the rare tourist who visits the island once the beach cools off. "It's really kind of a little ghost town," Jones says.
Jones and Hicklin experienced plenty on their way to success, including a serious case of burnout that could only be fixed by either selling the place or, as they decided to do, taking a year off to travel (leaving the inn in the hands of a general manager). "We were 24/7 for the first four years, and then we hit this brick wall," Jones says.
Welcome to life as a seasonal entrepreneur. The cadence of seasonal businesses often sends owners swirling during the first few years, and typically affects businesses born from a desire to do (and share) more with others.
"It takes a lot of energy, and a lot of sustained energy, to work at that high level of intensity for a long period of time," says Dee Dice, who, after 25 years on Martha's Vineyard, recently sold her April-to-October Eden Market and Garden Center.
Seasonal businesses require an annual ramping up, quick hauling in of all the money for the year and, finally (or, at least, finally for the season) shuttering. Once the last guest checks out of the inn or buys the final bunch of flowers from the farm stand, the owners also have to start focusing on their own lives again--and prep for the following year.
"It's intense," says Amy Osaki, who founded Portland, Ore.-based Mountain Hiking Holidays with her husband, John Osaki, in 1996--because hiking was "a core passion," she says.
At times, the business piece of the business is an afterthought. "For the first decade, making money wasn't even really much on the radar screen," says Peter Grubb, who founded his Coeur d'Alene, Idaho-based adventure travel company, ROW Adventures, in 1979.
"Things like return on investment or profit margins or break-even points--any of those things were foreign concepts to me. The bottom line was that we ran trips, and we were successful in the sense that people made it safely down the river and had a good time and we could pay our bills. That's all that really mattered."
But, Grubb says, after developing some fixed overhead of an office and deciding to keep on some year-round staff, he "started looking at the financial aspects of the business." Grubb says ROW pulls in about $1.1 million annually, while a seasonal lodge they built seven years ago (so guests would have a place to stay in one of their near-nothing rafting locations), grosses another $200,000. Their international business--which has grown into a year-round company--pulls in about $1.3 million annually.
Though the financial piece of seasonal businesses can be challenging--an oft-told financial strategy, if it can be called that, is to live off an equity line during the off-season and then pay that back with the season's income--many seasonal owners offer up personal and often downright emotional reasons for sticking with the business. They become part of their customers' extended families.
"It is extremely rewarding for us when we have the number of families that we have here who lead very busy lives who can come here and really form the anchors of family memories," says Mark Snider, who built Edgartown, Mass.-based Winnetu Oceanside Resort in 2000. "The seasonal business is all about guests and their vacation, which is highly personal."
Staffing is easily one of the most challenging aspects of running a seasonal business. One tactic to keep some continuity from year to year: Find something for your best employees to do in the off-season so they don't drift away.
"It's very difficult to get top-drawer people that only want to work seasonally," Grubb says. "You can find river guides because they combine their life as a river guide with winter work as a schoolteacher or a contractor or a carpenter or a ski-area kind of lifestyle." The challenge, he says, comes in hiring salespeople and office staff.
So Grubb usually cobbles together year-round jobs for workers he wants to keep on. "In the long run it's less expensive just to keep them employed year-round" than to "replace that position and start from scratch," he says.
At Lambert's Inn, which has a high-season staff of 30 and a year-round staff of three or four, including the owners and the restaurant chef, Jones says it costs about $500 to train a new staffer. They pay a training wage of $8 per hour for a week of eight-hour shifts. "We basically put them through a shadowing; they work with another server for a few days. Then we flop our big old butts in the restaurant and have them wait on us and then they take a couple of tables. So we ease them into the evenings," Jones says.
Along with traditional training, Snider believes one of the best ways to get your staff up to snuff is through constant role modeling. "I really feel that the most important contribution I make is that I'm always there. With our shuttle bus drivers and our greeters and the front desk staff, there is a humor. I introduce the guests to the staff by name. I make the staff feel comfortable and yes, I'm the owner, but I'm showing them how easy it is and how important it is to feel comfortable with their customers."
Finding the right blend of staffers is vital for a seasonal operation, because when a business has to pull in its annual revenue in just three or four months, errors are beyond costly. "I think that in a seasonal business there is so much that happens so quickly that it's really easy for people to make mistakes," Grubb says. "You know, to book too many people on a trip or tell someone, ‘Oh sorry, we're full,' when in fact we're not full or the staffers don't understand all the different trips that we offer so maybe they don't steer customers in the right direction. Getting to that point where we could afford to keep year-round people has been really worth it."
Across the seasonal spectrum, entrepreneurs frequently echo the idea that their best customers are also their best marketers. Like the staffing issues, no seasonal entrepreneur wants to continually rebuild a customer base from scratch. Repeats and referrals are critical. That means they have to focus on the guests' experiences while they're still on the property, in their shop or plowing down some rapids in a raft.
During the post-season, many businesses keep the conversation going with customers through social networking, e-mail newsletters and other collateral materials. Creating a personal bond with customers is key. Whether they're going on a company's adventure trip for the first time or the 10th, customers like to feel that they know the people they're traveling with.
"If somebody's on Facebook," Osaki says, "they can friend me as an individual, and John as an individual. Our zealous fans have really enjoyed that Where's Waldo? effect through sort of ‘Where are John and Amy now?' And we find that that's one of the easiest ways for us to open up personally to them."
For businesses housed in historic buildings, the biggest marketing challenge may just be reminding people that the property exists--that it's still relevant. That was the case for the Chebeague Island Inn off the coast of Portland, Maine. The century-old hotel would probably have elicited some sentimental comments if it closed, but it had been years since locals and summer regulars had stopped in for a meal or an overnight stay.
Casey Prentice grew up a quarter mile across the water from Chebeague, which he purchased with his father in 2010. "Standing where I am, I can see my best friend's house from high school," he says. "Yet we never once came out to the restaurant, and we never went to the hotel."
A short boat ride across Casco Bay from what he describes as "food-oriented" Portland, Prentice "wanted to use culinary as a driver" to get people on the property. "We knew that in year one we could sustain ourselves if we got our name out as a really good restaurant, which is what we did." He hired a local chef who had worked in some of the best restaurants in the area but had never been an executive chef. "He killed it," Prentice says.
"We figured people would come in for dinner and go, ‘Oh, my god, look at this place.' And then we'd ask them if they wanted to see a room," he says. With nearly 14,000 people passing through the restaurant during that first summer and just 3,100 total hotel room nights to fill in a season--the hotel has 21 rooms--occupancy started creeping up. Considering the hotel's average pre-2010 occupancy rate (a pathetic 26 percent), things could only get better.
During the 2011 season--Prentice's second as owner--customers have made it clear that Chebeague is, once again, part of their lives. And many have joined the repeat customer ranks. "This one family, they've come up three times already this season [as of early August]." Though the final numbers weren't in yet, Prentice expected nearly an 80 percent increase in room revenue for 2011 over 2010 and $1.2 million in gross revenue for the season.
Like most entrepreneurs, seasonal-business owners tend to disappear into their companies for long stretches--and as that process gets repeated over and over and it can play puppet master with their personal lives. Grubb co-owns ROW with his wife, who is also a guide. The pair wouldn't see each other much at all during high season, and when they did, they were focused on taking care of other people. Post-season, "You're both very needy people [who are thinking] OK, so now wouldn't it be wonderful it you took care of me?" he says. "Once we finally realized the dynamic, it helped us cope.
Like, OK that's what's going on, we need to have very low expectations of each other [right now]."
The schedule can also be trying for parents--especially if the business is a summer one. Before Dice adopted her children, she loved the seasonal schedule. After shutting down for the
season, she would often take a big trip, attend trade shows and do some "regrouping." The full-tilt work schedule in-season also worked well for her.
Once she adopted, she found herself on the opposite time-off schedule as her kids. "It drove me crazy," she says. "During their school year, I could go on field trips and have plenty of time. But in the summertime, when it's so much fun to do fun, great things, I was busy all the time. I strived to make sure they had fun things to do and camp and all that kind of stuff. But after a while, I thought, They're only going to be young once."
And then there's the burnout. When Jones and Hicklin decided to leave the inn's operations in the hands of a GM--with weekly stops in to take care of back-office tasks--they knew they would take a hit. Guests "were a little PO'd that we weren't here all the time," Jones says. "But we had no choice at that point. When the season kicks in, it is nonstop literally from 6 in the morning to 1 in the morning."
Though the challenges of going seasonal extend far beyond the season, none of these entrepreneurs questioned their decision to keep moving forward. "We are not in it for the sake of the business so much as for the sake of what we're doing, the activity. And a real passion for people, too," Grubb says. "At the end of the day, that's what we're doing: We're helping people enrich their lives."
When one season just isn't enough
When Chris Owens and his now partners started their very separate seasonal guiding companies in the mid-1990s--one heli-skiing, one rafting--it wasn't easy to get trained staffers to return year after year. "We were just bleeding institutional knowledge," says Chris Owens, general manager of Girdwood, Alaska-based Chugach Powder Guides and vice president of operations for EpicQuest. "You never made any forward progress, and you never got to build on your experience."
In 2002, the decision was made to merge the two to build stability for the company. "That whole effort of merging those companies was to buy us breathing room," Owens says. It also afforded them the opportunity "to grow intellectually as a company and as an institution," he says, one that has consistent policies and staffing from year to year.
Though they didn't realize it before the merger, Owens says they now know that the lack of continuity was an issue. "But I don't think that we truly understood it until we made it better. I think after we did that, there was a little bit of ‘wow' involved. You know, look at us now, we're now able to grow," he says. That growth included another merger, and now, under the EpicQuest umbrella, Owens and company offer everything from their original Alaskan heli-skiing adventures to Antarctic expeditions. "We still remain very true to what we do, which is guide," he says. "We know how to give people a top-shelf arm-around-the-shoulder experience and keep them safe while they're doing it."
The decision to go multiseason also hit Mountain Hiking Holidays several years back. Originally the company ran hiking trips in Europe from May to November. But with a repeat and referral rate of 65 to 75 percent, customers were, basically, anxious to put their feet on the ground in new spots. "They said, ‘You know, we love going with you. We love going to Europe. But we also want to go to South America. We want to go to Asia,'" co-founder Amy Osaki says. The company led its first trip to Japan in 2008. She adds that, along with keeping customers happy, the second season makes the company's cash-flow situation much easier.
"Yes, by going year-round, the cash flow is now on a more even 12-month schedule, rather than one season." The downside? "We also have two seasons," she says, "each with their own window of sales, marketing, logistics, push, intensity and operations."
Survival tips for seasonal-business owners
During the off-season, "prepare as much as possible," says Dee Dice, who recently sold her Eden Market and Garden Center on Martha's Vineyard. "I would always do my ads for the whole year. Then, when the time comes, you can tweak them a little bit and pop them right in."
Eat well, exercise and create time for yourself. The roller coaster up-and-down pace of a seasonal business can tumble a body (and mind) but good. Burnout comes easily. Several longtime seasonal entrepreneurs say a focus on health is an essential ingredient if you're going to be in-season for years to come. "We exercise every day," says Mountain Hiking Holiday's Amy Osaki. Dice adds: "Basically, try to keep your balance. Be as stable as possible, and try to keep your personal commitments as regular and stable as possible."
Also, Dice advises, do business with--and surround yourself with--people you really like. When your earning season is short, there's no time to deal with bad blood. And tight relationships can help things when life gets tricky midseason. "I had a tragedy happen in my family a couple years ago. I called a couple of different suppliers and said, ‘I will be unavailable for a month, totally unavailable. You have to pick up the ball, order everything, deal with everything, and just pretend it's me ordering,'" Dice says. "You know what? That's what they did, and it was great."
Running the Numbers
Turning a seasonal profit
His nine businesses go from doors open to shuttered in just four months each year, but Neil Darish, COO of McCarthy, Alaska-based McCarthy Ventures, operates under the same financial ratios used in year-round companies. And, if Darish can make ratios work for his businesses--all a 314-mile drive from Anchorage ending with a 60-mile stretch of rocky and, at times, rutty road--they're worth considering for companies that sit on Main Street of Beach Town, USA.
"Whether it's a pizza parlor or a hamburger joint or a dry cleaner, it's all run by established ratios," Darish says.
Darish still relies on industry standards to run his numbers. "I have to know that the labor ratio for restaurants is 24 percent," he says. "One of my parameters has to be that for every dollar coming in, I don't spend more than 24 cents on labor."
Darish recommends joining your industry's trade association to access the numbers you need.
"Running a business on ratio means that I understand the relationship between revenue and cost," Darish says. "I don't screw with that relationship."