If you are the owner of a seasonal business you are well aware of the sense of panic the looming off season can produce. How can you avoid the anxiety that comes from the slow season and ensure your business continues to thrive? By managing and boosting the cash flow of your business. But how can that be accomplished?
One way to boost the revenue of your seasonal business is by setting aside reserves during your peak season. Saving as much cash as possible will help you manage your company while business is slow. Consider taking advantage of a business line of credit as well. Many businesses will advance funds from a line of credit to help with expenses during the off season and then make large payments during peak season to pay the line of credit off, thus saving on interest as well. Many other businesses decide to diversify products, services, or methods during slow times. For instance, some retail businesses close their brick and mortar stores in slow times and only sell their merchandise online. Once the peak season starts they open their doors once again.
Another way to increase cash flow is to manage your employees based on your business needs. In slower times it may make more sense to lay off some, or most, of your employees and then call then back to work once business increases. By planning strategically, forecasting and budgeting you may be able to avoid that drastic step however. Some businesses also take advantage of leasing equipment, instead of purchasing it. Leasing is typically the most cost effective way of managing cash and equipment needed for businesses.
Seasonal businesses could also speak with vendors to make arrangements on payments owed based on the revenue flow of the business. During peak season, when deposits and revenue are high the business could make higher payments, then when the off season comes the payment amounts are adjusted and decreased to ensure the business does not suffer too much loss. If the seasonal business involves merchandise of some sort it may also be beneficial to speak with suppliers about the return of excess inventory, if possible. Returning merchandise that has not been sold by the end of the peak season will eliminate the cost of storage and possibly yield a credit from the supplier for the next season.
By planning ahead and implementing management techniques early you can boost cash flow for your seasonal business and continue to grow.
