CLIP's Tips

Especially at this time of the year, it can be easy to complain about the seasonal nature of our industry.  The challenges of reduced revenues, cash flow management and employee retention are all realities we face due to our seasonal businesses.

At CLIP, we are big fans of the E-Myth book by Michael Gerber and of its systems oriented approach for small businesses.  Recently, the E-Myth blog had two great posts on managing a seasonal business:

Catching the Seasonal Wave Part 1

Catching the Seasonal Wave Part 2

The following are from Part 2 on “Tactics that Alleviate the Pressure.”

To help maximize your skills, time and resources, follow this list of tactics:

1. Budget. Establish a tight budget and stick to it all year long. Avoid the temptation to spend when you’re flush with cash. Money management is always important in any business, but even more so to the seasonal business that must stay on top of an uneven cash flow.
2. Create a cash reserve account for lean months. Save, save, save, and save some more!
3. Create a cash flow forecast. Cash planning helps identify patterns and lets you see what you’ll be facing in the future.
4. Manage your time. Master your time management skills so you can work 80 hours a week in season and 10 hours a week off-season and still be efficient and know your priorities.
5. Market and Promote. Use slow times to devise marketing plans, conduct customer surveys, catch up on maintenance or strengthen client relationships. Send mailers, make calls, set-up meetings.
6. Create the right team. Use only a small core of permanent employees and consider temps and part-time workers when needed. Planning ahead is essential to your staffing needs. Aside from cash flow, the second biggest struggle for a seasonal business is often one’s people strategy, causing management challenges. Constantly having to recruit, hire and train new workers can put an added strain on tight resources. It may pay to hold onto workers. If not, keep in touch. Make working enjoyable. Give them incentives to come back the next season. Organize events when working to build teamwork and community, encourage employee feedback and offer performance based financial incentives.
7. Keep stock levels low. Carrying unneeded inventory ties up cash you may need elsewhere during the slow season.
8. Look for deals. Shop for the best discounts from suppliers; then build strong relationships with them to establish credit so you can extend payments if necessary.
9. Generate revenue. Offer off-season sales or rates, and look for ways to generate revenue during quieter periods.
10. Update your website. Off-season is a great time to enhance your website and jump into social networking and other forms of web marketing.

Application Action: Let us know what you do in the slow season.  Post a comment sharing your best strategies for managing a seasonal business.  Have a question for others?  Feel free to post that too!