As a business owner, it is not uncommon to experience seasonal cash flows. Sometimes taking advantage of business capital loans can help you float the off-season!
Here are some tips for surviving as a seasonal business:
Be prepared for your peak season
To prepare for your peak season it’s important that you identify when it begins and when it ends. Recordkeeping is a great way for you to keep track of your sales trends. By hiring an accountant or using a self-serve software like QuickBooks Online you can analyze trends and patterns in your revenue cycle.
Once you know when your peak season occurs, it is important for you to prepare for it by ensuring that inventory levels are adequate to carry you through the busy season. If you do not have enough free cash flow on hand to invest in inventory, you are likely to sell out of your best-selling products. If you don’t have the products customers want, you are sending your clients to your competition.
Inventory and business capital loans
Consider using inventory financing to support your business during your peak season. Using inventory financing allows you to purchase the optimal level of inventory so that you don’t have to restock throughout your busy season. However, when you’re stocking up for an entire season, it’s important to keep your eye on any perishable products or anything with a short shelf life. You don’t want to end up throwing money away on inventory that is no longer viable.
Stop turning customers away
In a seasonal business, every sale counts. If a customer cannot afford your product during your high demand season you’re losing out on critical revenue. Consider offering multiple forms of consumer financing so that you can capitalize on sales trends. By offering more than one form of consumer financing you increase the likelihood of approving a client who may have subprime credit. This allows you to not only provide your amazing product or service to your client but it also creates income that can sustain you during your slow season. Financing revenue is a great way to extend your income from your busy season into the remaining portion of the year.
Adopt a Harvest Mentality
If your business is able to generate a large portion of money in a short period of time, it is worthwhile to be diligent about how you spend these funds throughout the rest year. Consider taking on harvest mentality in regard to your income. If you’re generating $100,000 during a three-month busy season try not to spend every dime because you’ll need funds to reinvest so that you’re prepared for next year’s busy season.