Seasonal businesses are common in Newfoundland and Labrador, particularly in communities that rely heavily on tourism. When the influx of customers slows (or stops altogether), seasonal business owners must rely on careful planning to stay afloat until busy times come around again. Business owners can focus on key areas during the high season in order to be prepared for the leaner months:
One way to prepare for the slower months is to manage inventory properly during the high season. Once business slows down, no one wants to be left with a large amount of product that won’t sell. Unsold merchandise not only takes up physical space, it also ties up valuable cash that could be used to help ride out the off-season. Use historical sales data to see what your best sellers have been in the past. Take any projected growth into consideration, and order accordingly. Discount leftover merchandise at the end of season to help bump up your bank account.
Careful cash flow management is crucial to the survival of seasonal businesses. Projections and budgets must be analyzed line by line, and any unnecessary cash outflows eliminated. Creating a financial safety net during the busy months is an effort that will pay for itself when those off-season bills start arriving. If necessary, a line of credit can be taken out from a financial institution to make it through the seasonal lows, however this should be used very cautiously. A line of credit is a loan, and like all loans, must be repaid.
Any business owner knows that a company is only as good as its employees. In seasonal industries, it can be incredibly difficult to attract talented, dedicated employees, and have them return the next year. Having to hire and train a yearly roster of fresh staff is costly and time-consuming. It also means you miss out on the benefits of being represented by employees who’ve built their skills and expertise over time within your company. Paying your seasonal workers above the industry average gives them a good reason to return to you, rather than signing on with a lower-paying employer who can offer year-round work. The investment will pay off in the long run.
The high season is the best time to talk to your customers and find out what is working and what is not. Customer feedback is a driving force behind any successful business, particularly seasonal ones. These businesses have a shorter time frame in which to make things work, so information should be gathered and adjustments/improvements made accordingly. The high season is also a great time to collect customer contact information (with permission, of course) you can use to stay in touch during the shoulder season, keeping you fresh in the consumer’s mind.
Promotions and customer service
When business is hopping, make sure to offer customers off-season promotions to encourage them to buy from you during the low season (if your operation stays open year-round). Offer shoulder season discounts and other incentives. Another tactic is to offer end-of-season promotions. This is a great way to generate some extra cash before customers become scarce. Finally, ensure that during the busy season (and year-round) customer service is your top priority. Customers who have a great experience at your establishment will talk about it during the low season, providing you with free advertising when cash inflows are lower and increasing your chances of financial success in the coming year.
While operating a seasonal business in Newfoundland and Labrador certainly comes with its challenges, careful planning and execution during the busy season can build safeguards and remove a lot of the stress that occurs during the leaner months.