Surviving Year-Round While Running a Seasonal Business

By John Whisnant

How do surf shops, landscaping companies and other seasonal businesses survive year-round?

Establish a Budget.

Establishing and managing your budget will take some time. You want to make sure you do this with care and that you have all the facts. One chief budget consideration is cash flow. Even if your business is thriving for only four months each year, you still have bills such a rent, utilities, taxes, salaries and maintenance. Effective budget management insures that you will have the funds you need to support your business year-around.

  • Make a list of your fixed costs such as your rent, business loan and equipment rentals. These costs represent the minimum that your business needs to earn—and are the foundation for your budget.
  • You’ll also need to factor in variable costs, such as the cost of goods from your suppliers or any seasonal help you employ.
  • You should also establish a savings account to cover unexpected costs.
  • Keep in mind that, in the beginning, you may not have a salary.

You should have a contingency plan for personal expenses until your business begins to thrive.

If your revenue doesn’t match what you expected, work on your budget and trim expenses to compensate. Also, if you are taking in more money than you anticipated, perhaps you might be able to invest in your business, for example, by purchasing new equipment.

With effective budget management, you will be able to control expenses and invest in your company’s future.

The Off-Season.

Some seasonal business owners opt to expand their products and services so they can appeal to customers in the off-season. For example, if you sell stuffed turkeys for Thanksgiving and Christmas, you may consider selling specialty meats and catering to supplement your income the rest of the year.

When income doesn’t flow steadily, coming up with cash to carry you through the lean times often can be difficult. A line of credit can help cover the “slow” times and even out your overall financial picture.

Check with your financial services company to find out if you can link your business checking account to your business line of credit. If this option is available, you’ll have the convenience of easily transferring funds between accounts. And, if you opt for online business financial services, you’ll likely have access to your funds 24/7.

Connect with your Customers.

It’s also important not to lose visibility in the off-season. Many seasonal business owners maintain customer relationships through thank-you cards, direct mail and special offers. Others launch promotions that can generate business in the off-season, such as offering off-season spending discounts.

Protect Your Investment.

Business owners know that, while the demand for products and services may be unpredictable, risk is a constant, and you want to protect you and your business against it. Talk to your business insurance planner about risks inherent to your business, and devise a comprehensive business property and liability plan that will grow with you and your business. Some of the offerings available include business owner’s policy, business auto insurance, business property insurance, business liability insurance, workers’ compensation, business umbrella liability insurance and business identity theft insurance.

Armed with the right plan, financial services and planning advice, you can help your seasonal business thrive year-round.

John Whisnant is the area Business Banking manager with Wells Fargo located in Houston.

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january, 2021