This article discusses:

• What are seasonal businesses
• How seasonal businesses survive
• How seasonal businesses deal with hiring
• How to manage a seasonal company
• Ways to supplement income when your business is seasonal

Every business has its downtimes, but a seasonal business tends to experience more peaks and valleys than other businesses. That makes it more challenging for you to manage your business’s cash flow and have the income you need to survive year-round.

But just because you run a seasonal business doesn’t mean you have to struggle in the off-season.

We’ll show you how to supplement your income when your business is seasonal and offer a few tips on how your business can not only survive but thrive no matter what time of the year it is.

What are some seasonal businesses?

A seasonal business offers services or products typically in demand during a specific time of the year.

For instance, a lawn care business is in higher demand during warmer months. If you live in an area that doesn’t have a long warm-weather season, that could spell trouble for your business’s cash flow.

Conversely, a snow removal business is usually in high demand during the winter months. If your state only gets snow three months out of the year, you might wonder what you can do to supplement your income the other nine months of the year.

Some common types of seasonal businesses include:

Warm weather

• Landscaping company/lawn care
• Pond installation/pool cleaning
• House painting
• Moving service
• Outdoor retailer (fireworks, produce market, etc.)
• Tourism services (tours, white-water rafting, guided hikes, shuffle, etc.)
• boat rental

Cold Weather

• Snow removal
• Chimney sweeping business
• Coffee shop/cafe
• Christmas tree retailer/farmer
• Winter weatherproofing
• Ski resort
• Furnace repair

More seasonal businesses

• Tax preparation services
• Tutoring services
• Holiday season pop-up retailer
• Food truck

How do seasonal businesses survive?

A seasonal business relies heavily on revenue generated during its busy season. The trick with running and surviving as a seasonal business lies in skilled and expert management that considers the impacts of cyclical fluctuations, from downturns to heightened sales and revenue.

It’s important to remember that taxes, maintenance, equipment, inventory, and other small business expenditures need to be budgeted for 12 months of the year. So, you want to be sure you have enough money to meet those operating expenses.

Another thing you’ll want to strive for is good business credit. Cash flow deficits are common with seasonal work.

Take the time to build a good credit record so that you can qualify for a small business loan at a moment’s notice if the need arises.

For example, you might have a seasonal business that is dependent on good weather. If the weather is bad for much of your peak season, it could spell trouble for your business’s cash flow.

How does a seasonal business deal with hiring?

Entrepreneurs who are seasonal business owners usually hire temporary or part-time employees during spikes in their operations.

The good thing about hiring temporary employees is that it’s a cost-efficient solution that provides you the help you need and adds to your company’s productivity and profitability without breaking your bank account.

Hiring seasonal employees reduces your payroll costs and helps you offer more quality service to your customers. It also allows you to keep an eye out for workers who would be great to keep on full-time or permanently if the need ever arises.

Be sure to hire seasonal workers early (at least 30 to 60 days before you open shop), well before you need them, to ensure that you have time to train them adequately. This means they will be on your payroll before your business brings in revenue.

You’ll want to maintain good records on your seasonal workers, for both IRS and regulatory reasons, as well as to help you remember which candidates are worth hiring back.

Consider keeping in touch with your best workers and invite them back to reduce training time and onboarding processes for the next season.

How do you manage a seasonal company?

Successful management of a seasonal business often involves finding ways to remain profitable during slumps and the off-season. There are different ways to accomplish this, depending on what kind of business you’re in.

Usually, seasonal lows occur when there is lower demand or when you’re unable to get inventory or supply.

Consider the following when looking for ways to season-proof your business:

Find other revenue streams or diversify your seasonal business.

Your business might already be conducive to catering toward an “off-season” service or product.

For instance, many lawn service and landscaping businesses plow snow during winter. Consider earning extra money with a side gig offering holiday decorating services, helping homeowners light their landscape or deck the halls inside homes and offices.

Or, if your coffee shop flourishes during the winter months when customers are trying to warm up, consider adding warm-weather menu items during the summer months, such as fresh salads or a juice or frozen smoothie bar to help them cool off in the summer.

If you have a furnace repair business in the winter, consider a campaign to encourage customers to have their furnaces checked and cleaned in the warmer months to get ahead of the game. Offer an incentive or a discount for customers who take you up on services during the off-season.

If you own the real estate you run your business out of, consider leasing it when your seasonal business isn’t operational.

Look for ways to diversify your business or seek other business opportunities to help offset the peak season. Think of a business opportunity that builds on your current products or services and allows you to use the same workers from your seasonal business and market to the same client base.

You can have completely separate and distinct businesses for each season, just as long as you have a primary focus and business plan to continue to grow your business.

You may have to invest a little more into your business or even take out a small business loan to get a side hustle going. But if you plan wisely and choose a venture that is in demand, it could mean another viable revenue stream for you.

Plan ahead.

It’s an old game plan that always makes sense, particularly when running a seasonal business. Here are some ways to stay ahead of the game:

Maintain a constant cash flow.

If you know you’re going to have seasonal highs and lows, it pays to put away cash during your busier months to help cover your slower months.

At the same time, you might want to consider paying down more of your business debt when you’re bringing in more revenue. You can even negotiate with your vendors and creditors to pay more during the busy season and less when you know your business will experience a lull or downturn.

While you’re negotiating with your vendors, ensure you’re getting the best prices they can offer you. Also, consider reaching out to other vendors to make sure they can’t offer you a better deal.

You’ll also want to free up as much cash flow as you can during those seasonal lulls, whether it’s by cutting unnecessary business expenses or furloughing staff.

Plan ahead for next season.

Consider brainstorming with your best workers about the upcoming busy season. Do it right when your season closes while everything is still fresh in everyone’s minds. Try to determine what you can do better next season to increase your business’s bottom line while bringing more value to your customers.

You’ll also want to stay apprised of the latest seasonal business trends for the next season’s offerings. That way, you can deliver the latest products and services to your customers and stay relevant in your field.

It’s also an excellent time to get ready for the next season and update your company website, LinkedIn profile, and brochures or maintain equipment or other things vital to your business.

You can also use the slow season to plan more wisely for your company’s busy season. It may be an easier time for you to develop a better budgetary system or processes that will save your business money.

For example, in-demand products are always more expensive when they’re in season. So you’ll want to buy those items when there is less demand so that it will cost you less.

Stay in touch with customers.

Maintaining a connection to the clients who have contributed to the success of your business is vital. Think about it. If you don’t keep in touch and a competitor opens up shop, you risk the chance of losing a paying customer.

Even when your business is seasonal, you want to reach out to your customers all year long. It could be through a monthly email campaign informing them of trends in your industry or new products or services that your business is offering.

You can also send them promotions through their email or contact old customers for testimonials and include them on your social media or website, along with a discount for participating.

Once you make them part of your business’s success story, they’ll stay a customer for life.

What are some ways to supplement income when your business is seasonal?

We’ve already touched on some ways to supplement or diversify your income. But there are various other ways to add to your seasonal business’s revenue.

Monetize your business for the off-season.

One way to facilitate this would be offering a payment plan to credit-worthy clients instead of requiring lump payments for services.

Perhaps you can require half of what’s due upfront and break the other payments down over several months. Doing so can help your business maintain a steady income stream all year round.

Also, if you can market your company’s products or services online in places where they might be in higher demand, consider doing so. An example would be snow or ski apparel or swimwear. Online consumers look for those items when they plan to visit other countries in the off-season.

Get a grasp on unpaid invoices.

When you’re busy running your company during the busy season, you probably don’t have time to dive deep into collection activities for customers who are slow to pay or haven’t paid you yet.

But getting those invoices paid is crucial for your seasonal business to have a good cash flow.

First, evaluate your payment policy and tighten the reigns if you have too many unpaid invoices. While offering credit is part of doing business, it could be that you need to shorten the time that you allow customers to pay you.

Also, you’ll want to invoice customers as soon as possible once you’ve delivered a product or service. Be sure to have a due date on your invoices to set expectations from the beginning regarding when a customer is expected to pay you. Record the date you send out invoices in your accounting books and the date you receive payment, and send out late notices as needed.

It might also become necessary to stop extending credit to habitually-late customers or non-payers.

Get a small business loan.

Business loans are often a necessary part of having a business and help you grow your business or bridge the gap when your seasonal business’s cash flow isn’t optimal.

There are a few types of short-term small business loans that can help seasonal businesses through the slow season.

For instance, a working capital loan can offer you the cash you need when your business isn’t bringing in enough income.

A business line of credit or credit card can also help you pay business debts during the off-season or improve cash flow year-round.

And invoice financing can offer you cash now for customers who are slow to pay.

The Takeaway

For your seasonal business to be a successful enterprise, careful management of your company’s cash flow is essential. Just because your company doesn’t bring in revenue during slow times doesn’t mean your business’s cash flow must cease to exist.

It’s vital to create new revenue streams to expand your company’s cash flow year-round.

Even when you can’t supplement your income, employing a few useful tactics can help your business.

It’s also prudent to keep in touch with your clientele and plan and strategize for the next busy season.

Doing these things will help your business stay profitable during off-seasons as well as peak seasons.

And remember: A business loan is a useful option for small business owners that need help with cash flow or want to expand their reach and break off into new territories for their business.

An online lender or marketplace like Biz2Credit can offer you the cash you need when employing ways to supplement your seasonal business.

Biz2Credit helped Carlos Chavarria get his landscaping and construction firm funding when his company had to meet payroll during a slow period. And they can help your seasonal business get the fast funding it needs as well.