Smiling ice cream store employee standing behind the counter in the store. Concept: Seasonal businesses problems and solutions
Betsy Wise
By: betsy_wise
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Seasonal Businesses: Common Problems and Solutions

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All seasonal businesses encounter difficulties as seasons come and go and revenue ebbs and flows. As a seasonal business owner, you maintain a can-do attitude whether your business soars during a peak season or income drops dramatically. Essentially, you have one of the toughest jobs as an entrepreneur. You work and promote your products or services year-round, and still produce the majority of your revenue in only 3-6 months.

What if you had a handy check-off list detailing a seasonal business’s problems along with proven solutions? Now, you do.

15 Problems and Solutions For  Seasonal Businesses

Most seasonal businesses are weather-dependent. Ice-cream carts and golf courses operate during the summer while snow resorts and Christmas tree farms thrive during winter months. Even some retail merchants experience seasonal highs and lows because their highest sales revolve around events and holidays. All seasonal businesses face the same dilemma. How does a small business owner find solutions to problems in order to survive leaner months when cash flow decreases?

Problem 1: Inability to predict fluctuating cycles

Solutions: Keep detailed sales data so you can look back at your last 2-3 years to determine specific high and low cycles. If you’re a brand-new startup, contact your local SBA office for statistics about what’s normal for your industry. You’ll be able to plan for slower periods and allocate cash accordingly.

 

Problem 2: Difficulty controlling spending

Solutions: When there’s plenty of money on hand during a seasonal business’s peak season, it’s tempting to go on a shopping spree. Create an annual budget that incorporates all of your costs of doing business as well as allocating money for a savings account. At the end of a peak season, see how much money you have left after allocating your business expenses for the year. Should you have additional working capital available, you can make upgrades to equipment or add space for inventory. You could also use any profits (over and above expenses) to apply for a loan from Camino Financial to make improvements or pay off debts.

 

Problem 3: Not knowing what to do with free time during the offseason

Solutions: Maximize your time off by planning ahead for peak season. You can market your product or service 6 months before your seasonal business gets busy by doing everything you can to draw attention to your business. Redesign your website, send regular email blasts to your customer database, create a new product or service, or partner with other seasonal businesses and brainstorm ways to overcome seasonal slumps.

 

Problem 4: Inability to communicate with Spanish-speaking customers

Solution: According to a report by the New York Post in 2015, there are over 41 million native Spanish speakers in the US with another 11.6 million that are bilingual. Make sure at least one employee speaks Spanish so you don’t turn away buying customers. At Camino Financial, all of our customer representatives are bilingual.

 

Problem 5: Poor cash flow

Solutions: Not enough cash flow is possibly one of the most pressing concerns and can cause seasonal businesses to flounder. Sources of working capital include a business line of credit where you make regular withdrawals and payments, a small business loan or a microloan, and withdrawals from a business savings account. You can also use business credit cards to make purchases or work with trade creditors to delay payments for goods and services. Some seasonal businesses revise customer payment schedules from 60-90 days to 30 days so they have more cash available.

Learn here the multiple ways a business loan can help your seasonal business

 

Problem 6: Consequences of a natural disaster

Solution: Natural disasters like hurricanes and tornadoes can stop a seasonal business in its tracks. It’s important to have a contingency plan built into your seasonal business’s budget for an emergency fund that contains at least 3 months of business expenses. One caveat to remember is to set aside the money exclusively for a natural disaster and never use the funds for other purposes.

 

Problem 7: Lack of staff during high season

Solutions: Some entrepreneurs purposely get a loan so they have quick funding to hire temporary employees. The key to getting the right people is to hire properly before the peak season arrives. It’s also beneficial to find employees that can come back each season such as college students and retirees.

 

Problem 8: Having extra space during the low season

Solution: If you own the building, it’s easier to acquire a subtenant when your seasonal business isn’t using the facility. If you lease space, your landlord may not allow subleasing or only a certain percentage of the overall square footage. At any rate, an opportunity to gain additional income helps offset cash flow problems.

 

Problem 9: Excess inventory at the end of the peak season

Solution: It’s not a bad thing to have more of one product than another on hand. A simple remedy is to run a sale during spring to capitalize on sales that are notoriously slower than other times of the year.

 

Problem 10: Not knowing how to keep customers interested all year

Solutions: Catering to the needs of your customers is the mainstay of any business. Target new markets to find new customers and strengthen your existing customer support system. Purchase customer service software with built-in features that can be used by teams and individual users geared toward improving client interactions

 

Problem 11: Overflow of customers during peak season

Solution: To handle an influx of sales/customers, you can expand the hours you’re open. You’ll sell more and have extra income.

 

Problem 12: Not planning seasonability into the business

Solutions: Your budget should be flexible to allow for different scenarios. For example, consider using a fiscal accounting year versus a calendar year. It’s possible to set up a shorter tax year for seasonal businesses but make sure to consult a tax professional for advice. Likewise, short-term debt is an appealing option for seasonal business owners when more capital is warranted.

 

Problem 13: Lack of activity during low season

Solutions: Food trucks can offer ice cream during summer months and hot items during the winter. Surfing instructors can partner with a winter sports training company or a snow removal business can provide landscaping services for the remainder of the year.

 

Problem 14: Not feeling passionate about your seasonal business

Solutions: After working 14 hour days for who knows how long, you may wonder whether a seasonal business is a good idea. This is when a mini vacation works wonders. Take a day trip to the beach or mountains or meet with a professional business mentor to help you navigate through disappointments and burn out. It’s also a good idea to turn off your gadgets when you relax.

 

Problem 15: Running out of ideas to grow your seasonal business.

Solution: Check out the competition to know how other entrepreneurs tackle problems. Review their website, customer reviews, and how they approach offseason periods. Pay attention to how they market their product or service during downtimes. Do they advertise on the radio, in the local newspaper, or schedule interviews with magazines? Get in the habit of thinking vertically. How can you revitalize your seasonal business from top to bottom so it stands out in the crowd?

Why These 15 Tips Matter

Running a seasonal business can be satisfying, exasperating, and challenging. The following well-known people knew better than anyone the importance of finding solutions to problems.

“A challenge only becomes an obstacle when you bow to it”, American businessman, Ray Davis. Moreover, Martin Luther King, Jr., minister and activist, said, “Our very survival depends on our ability to stay awake, to adjust to new ideas, to remain vigilant and to face the challenge of change.”

Implement the above tips and you can outperform the competition!

How Camino Financial Helps You Face Seasonal Challenges

At Camino Financial, we care about our members. We don’t sign you up for a loan and forget who you are. Our loan specialists build strong relationships and endeavor to connect with customers at least 2-3 times per year. Furthermore, through our extensive online resources, we supply timely articles relating to sales, marketing, finances, management, trends, and other topics. We fervently endorse our company motto, “No Business Left Behind.” We understand the challenges you face and help you find doable resolutions. When you apply for a loan with us, you are assigned a personal loan specialist who guides you through the process.

We’re as excited as you are about growing your business. Check out how our mission-driven company can help your seasonal business thrive, all year long.

 

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