Guest Post: Strategies for a Thriving Business with Fluctuating Demand

Isabella York has been in the business world her entire life. Having seen business cycles ebb and flow, she knows a thing or two about developing strategies for handling changes in demand, especially after having worked with a purveyor of Artificial Christmas Trees and Christmas Trees. Here's her guest post that shares strategies for conquering these challenges.

Running a seasonal business has its challenges. Many small businesses experience the bulk of their annual sales during a short season or sales cycle. While all businesses realize sales cycles, truly seasonal businesses fall into two primary categories – those that can afford to close during the off-season and those that must find other ways to maintain cash flow during the rest of the year. In both cases, the challenges are similar and must be addressed so as to keep your business flourishing throughout its ebbs and flows. To smooth out the bumps between peak seasons, follow these strategies designed to turn your business into a thriving year-round concern:

1. Find alternative sources of income: Diversification has long been the name of the game in keeping a single-season business going year round or helping a business boosts its product line or services to existing clientele. Most of the time, this does not require starting an entirely new business but rather expanding the core business you already have. In diversifying, consider other services or products you can offer using the existing equipment and resources. For example, a business making wedding dresses might make most of its sales during the spring. However, by using its skills and equipment to make other special occasion dresses, it might be able to move into a market that is busy in the autumn and winter months. Landscaping companies can morph into snow-clearing businesses in the winter. Laundromats can get full use of their space by adding exercise equipment or electronic games or serving espresso and sandwiches.


2. Expand your customer base: Explore ways to market yourself differently in order to reach new customers. For instance, if your environment-friendly holiday goods are big with eco-conscious customers, consider selling on consignment to local supermarkets or green specialty stores. If your rain boots boutique needs a boost in sales, you might want to set up a mail-order business or online store. This way, you can increase your market without adding sales personnel or a new location. While exploring new markets, make sure to keep your eye on existing customers. Exert the extra effort to ask them what new services or products you could provide. Listen carefully to what your customers are saying about your product. Engaging in a dialogue pays off big time when you're working around the clock during peak season.


3. Use off-peak seasons productively: Whether you close shop for the season or just motor along at a slower pace, use your off- season productively so that when your peak season comes round again, your customers are there with you. Even during quiet seasons, there are still ways to stay in front of customers and help keep your business at the forefront of their minds when it comes time for them to make their purchasing decisions. Quieter periods also offer an opportunity to tackle time-consuming essentials, such as stocktaking and ordering. Look at the stock you have and compare it with the amounts you ordered over the year. It's important to take advantage of off-peak periods to consolidate your business.


4. Market your business so it stays active longer: Develop a marketing plan that makes sure the busy season lasts as long as possible. Sales are a suitable way to weather the downtime experienced by seasonal businesses everywhere. Discounts, sales and promotions can be used to bring customers in during off-peak months. This is the way many tourist accommodation businesses price the rooms they rent out. Through mailings and special incentives to book now, you can stay close to your customer base and find ways to make it easy for them to commit during the off-season. Offering products at huge discounts will entice buyers, thereby increasing product sales. Off-season sales not only keep your name before your customer, but they also give you an opportunity to sell end-of-the-season merchandise, reduce your inventory and generate some extra income.


5. Manage cash flow: Managing cash flow more effectively requires getting paid more quickly. It pays to be organized about obtaining payments. This means sending out invoices promptly, chasing late payers and considering offering a discount for early payments. Also keep stock levels down as carrying excess stock ties up money you could be using elsewhere. Keep records of stock levels so you can see patterns of what kind of stock you should build up and when you need it. You can also improve your cash flow by tightening your purchasing policies. This might involve looking for a bulk discount, agreeing a longer than usual payment period or arranging purchases on a sale and return basis.

Running a seasonal business definitely has its challenges. With some vigilance and a clear strategy, you can alleviate many of the potential problems and create a path to solvency and success.