Anyone running a seasonal business knows how difficult it is in this country particularly if you are relying on some decent weather to get people spending their money. With summer taking an age to finally arrive this year and the weather not performing particularly well during June, it is proving to be another challenging year. With so much out of your control, what can you do in the close season to best prepare you for a really busy few weeks that will make or break your business.
1.) Learn from the past
Review what you have done in previous years to understand what has or hasn’t worked. Ensure your procedures for measuring important data and key performance indicators are updated and changed to ensure you have the data for future years. Can the things that didn’t work be changed to make them more successful or should you drop them and concentrate on other areas? Are there similarities in certain months or has the ability to predict trends been removed over the last few years?
You’ll clearly need more staff during the busy periods, but having people who have skills that can also be used in the close season as well will not only retain good staff but will enable the business to prepare better for the next busy season. Are they good on computers or website design, can they help with the off-peak marketing by producing flyers or designing a marketing plan for the next season. Clearly they will have to be paid but if they contribute more than that cost to the development of the business for the next season then the cost is well worth while.
Ensure that last season’s performance is reviewed then prepare a profit and loss and cashflow projection for the coming year. The numbers will be very uneven by virtue of having a busy season so plan for the cash to come in during the busy times and then ensure you have enough to survive during the close season. Keep a tight rein on wages and other major costs but try and build in some cash requirement for upgrading equipment or property. Try and do a couple of “what if” scenarios to understand how sensitive the business is to certain changes e.g. a 5% drop in turnover.
4) Review contracts
Both supply and purchase contracts and obligations should be reviewed in the close season and it’s always good to do that as part of the budgeting process. Will new contracts be needed or re-negotiated and if they do address the issue as soon as possible? The later it’s left and the nearer you get to the main season, the less bargaining power you may have, so keep in control of the process and don’t get to a position of having to “panic buy” at the last minute.
5.) Credit control
Try to get all debts collected before you enter the close season, but if you find there are debts outstanding get on the case straight away. Use a debt collection company or solicitors if necessary, both are not as expensive as you might imagine in a competitive market, and it’s worth a small outlay to get that essential cash in. Uncollected and late payments will reduce the cash available to do the repairs, maintenance and upgrades during the close season. Ensure you have a credit procedure which should include credit checking new companies, ensuring you have adequate contracts which should include payment terms, and procedures for pursuing late payments.
As with anything else in business, the more planning and preparation that is done, the greater the chance of a successful outcome. The business environment is changing at breakneck speed and you’ll need to keep up. Customer buying habits have changed dramatically in just a few years and doing the same old things year after year may not be adequate going forwards. Technological advances mean the way you communicate will have changed and that poses its own challenges with the skills required going forwards and the investment in new and developing technologies.
Running a seasonal business does come with its own unique challenges but the vast majority of what you do in those businesses is very similar to other companies and the basics still need to be done well and consistently.