Articles
The Pros and Cons of Seasonal Business

In an ever-changing global economy, entrepreneurs are seeking inventive ways to achieve competitive success with a seasonal business while balancing work and life. Opening a seasonal business is one such strategy. There are two types of seasonal businesses: those that close completely during the “off” season and those that remain open year-round but see the majority of their sales during a particular time of year. Whether you’re operating a coastal surf shop, a tour bus company, or a kid’s holiday facility, here’s a closer look at the pros and cons of operating a seasonal business:

PRO: Innovate While You Hibernate

• Become Better: Downtime is the right time to strategize and modernize. Take advantage of quieter periods by investing in professional development, taking online courses, attending trade shows, or researching competitors.
• Staffing: Use this time to clarify what you expect from your team. Write down staff policies and establish processes for your managers and co-workers to follow.
• Upgrade Technology and Systems: Consider using this time to prepare your business for the next boom. This could involve servicing equipment, updating your point of sale systems, or enhancing your infrastructure. A small business loan could support this endeavor.
• Plan Stock Carefully: Ensure you order correctly for the specific period you are navigating. While it may be easier to repeat previous orders with your supplier, this could lead to excess stock, negatively impacting your bottom line.

PRO: Make Meaningful Connections

• Talk to Your Customers: Quieter periods allow you to develop a social media presence and engage with customers. This can inform next season’s plans. Consider launching an event to network with customers or introduce a new product or service.
• Strategize Your Next Campaign: Plan your marketing campaigns ahead of time. Use this opportunity to understand your customers and how you can attract them to your business instead of your competitors.

PRO: You Can and Should Rest
If you can anticipate slower periods, use them wisely. Break your routine, get out of town, or avoid traditional office hours. The benefit of this approach is that when the season rolls around, you will return with much-needed energy and vigor.

CON: Financial Downturns Are Inevitable
Living in constant anticipation of a low season can be daunting. You have small windows to turn profits and meet targets, so you must always prepare for the worst. To mitigate risk:

• Know Your Cycles and Plan Accordingly: Hold back cash flow so it’s available in slower periods.
• Don’t Overtrade: Ensure you have just the right number of staff, carry the correct amount of stock, and negotiate with suppliers. Every Rand counts!
• Ask for Help: Work with your accountant to find ways to manage cash flow effectively.
• Consider Specialized Merchant Funding: A merchant cash advance is a flexible cash injection that uses your credit card terminal for repayments. It works in line with turnover, making it ideal for seasonal businesses, as repayments adjust to revenue. This means you pay less during slow periods but can pay off the amount faster during better times.

CON: Stress Is High
Seasonal business owners know that great opportunities come with greater stress. It takes a particular kind of entrepreneur to navigate the peaks and valleys of seasonal trading. Every potential challenge can impact your business more significantly than for non-seasonal businesses. Weather, sick employees, or transportation strikes can have a larger effect. To mitigate risk, check climate history to prepare for weather in your region, set up emergency bank accounts, and always prepare for both the best and worst of times.

There is no denying that seasonal businesses can be stressful and risky. However, with the right determination, business acumen, and resilience, they also hold immense growth potential and opportunities for the steadfast entrepreneurs who dare to pursue them.

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