Small businesses know all too well that business isn’t always booming. Seasonal fluctuations like summer break, bad weather or holidays can seriously impact their bottom line. That’s why small businesses need to plan ahead and learn to be resilient when the road gets bumpy. Here’s seven ways your business can overcome a seasonal slump.
1. Diversify Your Products or Services
Seasonal businesses often find that the slow time of the year can be a real cash crunch. Think about diversifying your services or products to keep your cash register ringing. For example, if you run a doggy daycare, you might consider offering overnight stay services or even bring on a groomer or two to add extra cash flow. If your landscaping business crushes it in the summer, but slows way down in the winter, think about offering fall clean-up or snow removal services. Diversifying your products or services allows your business to bring in sales year-round, instead of just during your peak season.
2. Find Ways to Operate Lean
Operating lean begins with a deep dive into your business operations. Ask yourself where you can save. Is labor killing you? Are your prices too low? Is there waste? Can you save on utilities? As the business owner, going lean may mean you work extra hours, or shrink your take home pay. Finding alternative, more efficient ways to achieve your business goals should be every business owner’s priority, and it can be especially important when sales are down.
3. Save More Than You Think You’ll Need
Every business should strive to have a rainy day fund of at least 3 months of operating costs. If you know you are heading into the slow season, you need to plan accordingly. The first step is to know how much it costs to operate your business. From there you can figure out how much you need to save to keep the doors open when things get slow. It doesn’t hurt to overestimate the cash reserves you’ll need (think about saving 25 to 50 percent more than you think). It’s never a bad thing to have a robust financial cushion to see you through a slump.
4. Don’t Forget Your Regular Customers
When things get slow, don’t forget the people who support you. Rewarding loyal customers with exclusive specials or discounted products or services makes them feel special, and it makes them realize that you appreciate their consistent patronage. Rewards programs can make your customers feel connected to your business and its success. It’s also likely that loyal customers will tell their friends and family to spend their money with you, and and you can’t beat the value of word of mouth advertising
5. Consider Hosting Events
Whether your business is deep in the summer doldrums or frozen out over the holidays, hosting events can help get bodies through the door. If you’re a clothing boutique, think about hosting a trunk show where a high-end designer offers hard-to-find items. If you’re a bar or restaurant, consider offering live music, a trivia night, or even a charity dinner. Hosting events can pay off long term, as the people you attract may turn into loyal customers.
6. Increase Your Marketing Budget
Seasonal slowdowns may feel like the end of the world for small businesses, but it can also be an opportunity to ramp up your advertising budget. Think about how you can reach out to customers through social media, your website, print and radio ads, email campaigns, and even SMS marketing. While it might seem crazy to up your advertising budget as sales slow, attracting new customers and letting potential clients know that your business exists is never a bad thing.
7. Take a Break
Tourist towns and cities like Cape Cod and New Orleans suffer from seasonal slumps more than most. Cape Cod businesses see a large drop off in revenue come winter, while New Orleans slows way down in the hot summer months. Instead of fighting the slump, some businesses choose to close for a week, two weeks, and in some cases a whole month. Taking a break cuts operational costs like labor and utilities. It also allows the business owners time to recharge and prepare for the coming busy season.
Navigating potential seasonal slowdowns is all about being proactive, and recognizing that part of doing business is rolling with the punches. While stressful, a sales slump can help businesses learn to operate more efficiently and discover new revenue opportunities, which should help them be resilient in the long run.
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