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Seasonal businesses: What you need to know

What is a seasonal business?

Most businesses experience some highs and lows and in many cases, these fluctuations correspond with the seasons. Seasonal business is a term that refers to the fluctuations in business that correspond to the changes in seasons. This is not to say that they only operate in one season for the most part, with a few exceptions.

Here are some examples:

  • Christmas or alternative holiday retailers
  • Fireworks retailers
  • Gardeners
  • Halloween retailers
  • Ice cream vans
  • Mobile caterers
  • Moving services
  • Pet-sitters
  • Tour guides
  • Tutors
  • Holiday clubs for kids
  • The list goes on!

Mobile catering image

Rules for starting and running a seasonal business

Just because your products are not in demand all year round and customers won't buy your products or services throughout the whole year, doesn't necessarily mean your business idea isn't viable. Sometimes ideas have seasonal appeal. You may be able to generate enough profit not to have to consider income for the rest of the year. Alternatively, you may run your business for six or eight months and run another seasonal business for the remainder of the year. Many of the challenges seasonal businesses face are the same as any other business. However, some are unique. So, what are the golden rules of starting and running a seasonal business?

Know your market

You must be sure there is enough demand for your products or services that you can generate enough income during your peak season. To gain knowledge, carry out some simple market research. Ask potential customers whether they would buy from you at the prices you are considering charging. If so, what would they buy, how much would they buy and how often? Find out also what competition you face and try to set yourself apart with your USP. Markets change, so your knowledge must remain current, so, research, research, research!

Marketing plan

Seasonal businesses must often work harder to promote themselves, often to simply remind customers they are there. To hit the ground running, you should leave enough time for your publicity and advertising to attract customers. When it comes to marketing, good planning prevents poor performance, so create a plan. You must also commit enough time and finance to marketing and use all channels that could bring you important sales.

Managing cashflow

Successfully managing cash flow can present a significant challenge for seasonal businesses because they receive most of their income in a set period, but may have outgoings at other times. The temptation can be to spend too much when cash is plentiful, creating cash flow issues when revenue is down. Irregular cash flow requires careful planning and management.

Purchase essentials

Being left with unsold stock is wasteful and will cost you. You must accurately estimate demand by using your market knowledge/research. Getting favourable terms from suppliers can be more difficult when buying within a limited period, but there's no harm in trying by using your business relationship with them. Shop around for best value and try to establish good relationships with suppliers. Just in time inventory management can help you minimise wastage by allowing you to order stock and supplies as and when you require them.

Wenta shopping bag

Helping hands

Make sure you have enough options for assistance when you require them. Failure to do so may lose you important sales. Self-employed people provide a cost-effective solution, but always leave yourself enough time to secure the best people for the job.

Make sure you're legal

Some businesses require a licence to trade or must be registered, of course, while all business have legal responsibilities when it comes to health and safetyinsurance and employment. If you lack enough legal knowledge, then seek professional advice.

Seek reliable tax advice

Much will depend upon the legal structure of your business, its turnover and your total personal income, but seek professional advice to ensure maximum tax-efficiency. You might need to become VAT registered if your turnover reaches the VAT threshold or if your business industry demands. You may prefer to form a company ("incorporate") rather than operate as a sole trader . You need to make sure you claim all available allowances and you may require a bookkeeper and or an accountant to help you with your returns.

Last longer by diversifying

If offering discounts and holding promotions doesn't help you to make sales when sales slowdown, maybe you could modify your offer to give it wider and longer-lasting appeal. The changes might only need to be subtle and therefore inexpensive. Targeting other customers may boost your turnover. Perhaps you might be able to sell your products online.

Use quiet periods to improve your offering and analyse your results to date

If you cannot change your products or services to give them longer-lasting appeal, make sure you "mothball" your seasonal business properly. Use quiet periods to analyse your results and think of ways you can improve the business for when it becomes active again. For example, you might want to introduce new products or services, operate in a new location, or expand in another way.
You should also try to devise ways to market your seasonal business more effectively.

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