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Q: My wife and I are thinking of buying an ice cream parlor and antiques shop in our downtown historic district, but we're worried about how we're going to cover our costs in the winter when business is slow. Any advice?
A: The toughest part of running a seasonal business is managing your cash flow. Whether you're selling ice cream, pool supplies or landscaping services, you've got to plan ahead for the months when bills are due and there's little cash coming in to cover them.
That's why Joseph Fulvio of Third Coast Partners, a Doylestown, Pa., consulting firm that specializes in working with emerging businesses, advises entrepreneurs who are considering launching seasonal operations to put together a financial forecast based on the company's historical revenues, cash flow, capital purchases and "downtime." This, he says, will help close the gap between income and expenses during the business' off-season. He offers this example: a snow cone shop in a vacation destination will often close for the winter while a children's clothing retailer may simply find business soft in, say, February or June.