Seasonal Businesses

4 Tips for Managing a Seasonal Sales Cycle

4 Tips for Managing a Seasonal Sales Cycle
Image credit: David Goehring | Flickr
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What do you do if your small business stops generating revenue, even for a few weeks? Many small business owners find this question difficult to answer, especially if they operate in traditionally seasonal industries such as retail, food and hospitality.

Related: 7 Tips for Managing a Seasonal Business

Every business has good months and bad months, but some businesses in these industries must rely entirely on the "good months" to fund a full year of operations.

For small business owners figuring out how to meet this challenge head-on, here are four tips on how to manage a seasonal sales cycle.

1. Rely more on part-time or seasonal employees. 

No small business owner wants to let go of a productive employee, but sometimes that's necessary to keep the business afloat. This is especially true of seasonal businesses such as beachfront restaurants and niche clothing stores that cater to specific seasons.

There may not be enough work to go around during the slow months to justify a big staff, so keep that fact in mind when you’re recruiting employees. You might be better off hiring a few part-timers to get through the busy season, then letting them go when sales dry up, rather than extending full-time offers to highly qualified workers.

2. Consider shortening your hours of operation.

A business needs to be open in order to generate revenue -- just saying that may seem counterintuitive. But if you run a pizza parlor and get only a couple of customers a day during the winter months, you might be better off staying open just a few hours a day at that time of year, or closing the shop altogether.

Every day that you’re open, you’re paying for heat, gas, electricity and the salaries of your employees. If you’re in the food service industry, you risk having to throw out spoiled food because there aren’t enough customers to buy it. There’s no magic formula for knowing the optimal time to be open, so try experimenting with a few schedule variations until you settle on one that works for you and your customers.

Related: Five Ways to Give Your Seasonal Business an Off-Season Boost

3. Plan ahead by saving aggressively.

It’s hard for a seasonal business to generate a profit during the quiet months. That almost certainly means taking a loss during the off-season and having to dip into savings, or taking out a business loan to even out cash flow.

Although it’s hard to predict exactly how large a loss that will be, small business owners can help their situation by proactively saving as much as possible. That may mean foregoing the purchase of a new refrigerator for the kitchen or losing the ability to bring on a great new employee. But if it makes the difference for keeping the business open, the minor sacrifice will be worth it.

4. Explore additional revenue streams.

If you run a customer-driven business and don’t have any customers, you may want to look into alternative sources of revenue. For example, a restaurant that depends on the tourist season to attract customers could pivot by turning into a catering business. Or, a business with a surplus inventory of bathing suits or sandals could dedicate the winter months to offloading the excess supply via online promotions and giveaways.

You could also bulk up your marketing efforts so that when the weather turns warm (or cold), your business will be the place to be.

Predicting future revenues is a challenge for any small business, but it’s an especially important obstacle for businesses that operate in traditionally seasonal industries. Small business owners struggling with a seasonal sales cycle should consider these tips when they plan ahead for 2016. 

Related: Marcus Lemonis's Top 10 Tips for Businesses This Holiday Season