5 Ways Small Business Owners Can Manage Seasonal Ebbs and Flows

For some entrepreneurs, a change in the season could mean a change in the ebb and flow of business. Sales could be robust one month, but sluggish the next.  The summer months are a prime example. If you run a water park or operate a touristy boutique in a popular vacation spot money could soon be rushing in, but for holiday toy makers it’s almost certainly a lean time.

Here are a few tips that could help you manage your cash flow, prepare for inevitable slow months, and flourish in the coming years.

1. Build a business emergency fund

The idea of an emergency fund is well-known in the personal finance space. It’s important to have a reserve of cash you can tap into in case you lose your job, your vehicle breaks down, there’s a medical emergency, or some other disaster strikes. Business owners could take the same approach and build a fund that can help keep a financial emergency, especially one that occurs during the slow season, from causing serious harm to your whole business.

With a personal emergency fund, the rule of thumb is often to have three to six months’ worth of expenses saved up. You could base how much you want to save on the length of your slow seasons and your average monthly expenses.

Small business owners who draw their income from the business may need to do double duty as they build up both personal and business emergency funds.

2. Secure a line of credit

Waiting until the last minute to look for a loan or a business line of credit can be an expensive mistake as financing can be harder to qualify for, or may cost more, when you’re in dire need. Instead, secure a line of credit as soon as you can, even if you don’t plan on tapping it right away.

You can then borrow money against your line of credit during lean months, or in the ramp up to your busy season. In some cases, there aren’t any annual fees, and you’ll only pay if and when you draw on the credit line.

3. Collect data to help forecast your needs

Managing cash flow is important for every business, although seasonal businesses may have to deal with longer lulls. If you don’t already have one, set up an accounting system and start closely tracking your income and expenses to know where (and when) your money moves.

The data can help you forecast your cash flow, giving you some basis for how much you need to save during the busy season. You can also plug significant upcoming expenses, such as equipment upgrades or repairs, into your projections and start saving accordingly.  

4. Ask for terms from vendors

If you’ve built solid relationships with your vendors and have a good business credit score, you may be able to ask for longer terms on your invoices.

Longer terms can be particularly helpful if you generally buy supplies, hire extra employees, or build your products during the lead up to your busy period. If you can get 60- or 90-day terms, you could have months of productivity and won’t have to pay the bills until money is flowing in.

5. Take advantage of your off-season

Business owners may reap the rewards of a busy season’s steady income, but they can also look for ways to prosper during their slow season:

  • Invest in yourself. Think back to the busiest months and identify a few areas of growth that could help make you more effective next year. There are all sorts of courses and certification programs available online. For example, a management course might teach you how to improve morale and employee productivity, or you could learn how to build and improve email newsletter campaigns.
  • Look for new revenue sources. Your core offering may be tied to the seasons, but you could look for other ways to make money during the off-season. Perhaps you sublease your store or office space, or you find a way to expand and offer your products or services to a different area of the world that’s seasons don’t match your own.
  • Find ways to save money. You could look for ways to offset your lower income by decreasing your expense as well. A seasonal change, perhaps cutting employees’ hours, could be one solution. But you can also use this time to look for inefficiencies that cost you money year-round by reviewing your subscription services, comparing vendors, and identifying ways to save on supplies.

6. Enjoy a vacation

Finding a healthy work-life balance can be an important part of sustaining your business long term. Since you run a seasonal business, you may have a lot of flexibility during your off-season and can take advantage of travel deals to enjoy some relatively inexpensive rest and relaxation.

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This article was first published on June 20, 2018. It was updated on


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