Running a seasonal business is … unique, let’s just say. After a couple of months of absolutely nothing to do, suddenly your shop is slammed with customers cleaning you out. It’s what makes managing these enterprises unlike anything else in the business world.
If you’ve thought about jumping into the seasonal industry with one of your small business ideas, you might be wondering what you’re getting yourself into. And you’d be right to think twice, as there are ins and outs you must consider. Not just anyone can succeed in this business — it takes a certain kind of personality.
So read on as we discuss what is involved in the seasonal industry, its advantages and disadvantages, and how you can ensure your venture is a success if you still want a piece.
Overview: What is a seasonal business?
Whether you’re a winter business or a summer business, if you operate for only a few months — or even a few weeks — out of the year, you’re a seasonal business. A seasonal business experiences changes in sales based on a change in the season.
These businesses are typically highly affected by the weather, holidays, or something else limited to a certain time period. These seasonal businesses have some unique advantages and challenges as a result.
The 3 advantages of running a seasonal business
The entrepreneurial process doesn’t differ much when you’re running a seasonal business — it is still a business, after all. However, there are three unique advantages when your business is seasonal you should consider.
The nice thing about a seasonal business is you actually get a break from the hustle and bustle. You can spend that break doing whatever you want, whether it be relaxing and taking time for family or investing more time in improving your business.
Using the time to strategize and market more effectively may be a smart way to grow in the seasonal industry, but it might be equally wise to take time off to invest in yourself as well — life is more than work, after all.
2. Greater efficiency
Year-round businesses often experience slow times and busy times, meaning sometimes they operate on slim margins, or even at a loss, some of the time while still paying for labor, inventory management, and all sorts of overhead despite limited revenue.
Seasonal employers, however, can hire seasonal workers and don’t have to pay them during the months when business is nonexistent, increasing the efficiency of the business overall.
A seasonal business gives a business owner freedom. Rather than being tied down to one location, buried in work, and unable to get free for even a weekend, a seasonal business owner can take time off for a trip, spend time with the family, or do whatever else they want. They could even pursue other business opportunities on the side.
4 disadvantages of running a seasonal business
Still, there are some obvious disadvantages with running a seasonal business you should not ignore — some of which you may have guessed, and others that may not have occurred to you.
1. Inconsistent income
The most glaring problem with a seasonal business is that some months you’re raking in the money, and other months you’re pulling in nothing. Seasonal fluctuations like this can really put a damper on your business goals, so you must be prepared for this reality.
The seasonal business owner must be disciplined in saving and spending, ensuring there are enough resources and cash on hand to survive the lean times. And if you’re used to working year-round, it’s challenging on a psychological level to just stop for a few months.
2. Less freedom situationally
A seasonal company provides freedom to its owner during the off-months, but in season, there’s very limited opportunity to take any time off at all. Because everything is depending on how well you perform during the season, you might need to work long hours to bring in enough cash to survive until the next season.
3. Greater stress
While work-life balance is easy during the off-season, it may be all but impossible during the season. A seasonal business owner must work long hours and may not have time for family for months on end, which may affect relationships negatively. Also, if the owner is unable to generate enough cash during the season, that stress will carry over to the off-season when they’re supposed to be relaxing.
4. Lower customer engagement
Building a strong customer base is a year-round effort for most businesses, so a seasonal business owner is at a real disadvantage when it comes to customer engagement. Shutting down for several months makes it hard to continue to develop that relationship. When you’re only interacting with a customer during one particular period of the year, you may have to work that much harder to keep customer loyalty strong.
Examples of seasonal businesses
You’ve almost certainly dealt with many seasonal businesses over time. Here are a few of the most common ones.
1. Landscaping services
Landscapers are a prime example of a seasonal business. They provide lawn and ground care and work only during times when vegetation is actually growing and needs trimming. During the winter, there is virtually no demand, which suddenly pivots to high demand in the spring and summer before beginning to taper off in the fall. Landscapers will be busier for longer periods in warmer climates.
2. Ski resorts
Ski resorts are dependent on snow and therefore largely operate during the winter season. While ski resorts now have access to machines that make their own snow, operating these machines can be expensive and cold weather is still needed to entice skiers to the slopes — no one’s going to come skiing in June, no matter how much snow a resort is able to produce.
Not all hotels are seasonal, but some are. Some properties are built near seasonal businesses like ski resorts, or in popular spring break and summer vacation destinations like Myrtle Beach or Daytona Beach. These hotels go through lean times during the off-season when tourists are sparse and only limited business travel sustains them.
Like hotels, restaurants are not always seasonal, but they are often in seasonal destinations. For example, a restaurant located in a popular beach resort area enjoys packed bookings during the summer months but barely scrapes by during the winter months when only a limited local population dines on occasion.
5. Holiday retailers
Some retailers are geared specifically for certain holidays. For example, Christmas tree vendors are highly seasonal and get sales for a maximum of two months out of the year — November and December. Fireworks sellers suddenly spring up around the country when the Fourth of July approaches, only to completely disappear until the next summer.
Party City, a costume shop chain, is able to get some consistent revenue from people throwing parties throughout the year, but they largely make their money from booms during Halloween and New Year’s Eve.
Running a seasonal business is all about planning
If you’re looking for some small business tips for running a seasonal business, it mostly comes down to how you prepare. As a seasonal business owner, you must manage your cash flow responsibly, use your downtime wisely in order to prepare for the upcoming season, guard your expenses carefully to avoid waste, and learn lessons from challenges experienced during previous seasons so you can fine-tune your approach for the next.
Running a seasonal business is tough, but if you put in the necessary homework and adjust your expectations, you may find that this is the perfect industry for you.
View more information: https://www.fool.com/the-blueprint/seasonal-business/