Over half a million new jobs are created during the holiday season, revealing the economic importance of seasonal businesses. For company owners, however, business can be difficult. Although the work continues year round, cash flow fluctuates hugely. During the low season, it can be hard to break even as sales take a dip. Since cash is so vital to business operations, how can a seasonal business maintain profit throughout the year?
Odd Jobs Online
A good place to start is by supplementing your income. Small and simple online tasks can keep cash coming in and could make all the difference. Alternatively, you could create a source of passive income using the internet. You are a business owner in a certain niche with a certain level of expertise, so consider putting this knowledge into a business advice eBook or running a webinar. If you have created high quality content, you should be bringing in money all year round, even when your main business is experiencing decreased sales.
Tweaking Your Business Model
Although your seasonal business is your main source of income, it might be possible to secure a secondary income by changing how you operate. Start by diversifying your services. It’s great to focus in on a small area, such as serving the best ice cream in the area, but branching out could help your company to get by in other seasons. When winter comes around, the ice cream shop owner may consider serving hot food and coffee. It might not be your main source of profits, but it could help to limit or eliminate losses during the low season.
Alternatively, you could alter your business to become more mobile. The world is increasingly interconnected and it might be financially viable to travel. As winter spreads over the USA, an ice cream seller may consider traveling south towards the equator where ice creams are still desired between October and March.
Consider a Merchant Cash Advance
Loans are an important part of a business model, but they can really harm seasonal businesses. A traditional loan will require regular monthly payments regardless of your ability to pay. A merchant cash advance is an alternative form of finance, which is repaid via a proportion of your debit and credit card sales. This means that repayments are pegged to cash flow. When business is going well during the high season, you can repay more. However, during the low season, your merchant cash advance provider will ensure that you only repay what you can afford, leaving you with enough cash to continue business operations.
Seasonal businesses require an extra level of organization. You have to be on top of your finances, so that you can last through the months when business is slow. Consider using this time to diversify your income, either with supplementation from online sources or by expanding your operations. Becoming mobile, if viable, can also help. You can also seek alternative financing such as the merchant cash advance, so that you don’t run yourself into debt as sales figures drop.
