Financial Tips for Seasonal Business Cash Flow Management

Financial Tips for Seasonal Business Cash Flow Management


You hustled all peak season long, and now it’s time for a break. Right? Well, it depends on your cash flow — keeping it steady through the uneven waves isn’t easy.

For part of the year, orders flow in like whitewater rapids. Then, for months, the workflow becomes a trickling stream or, even worse, a dry creek bed. When the work slows down, your cash flow dips, too. But you need to make payroll, maintain inventory and keep the lights on just the same.

These four financial tips for seasonal businesses can help to ease your business cash flow management.

Adjust Your Spending

Review a couple years of your company’s finances so you can see exactly when the work starts drying up and picks up again. Then you can try to time any major expenditures for when your accounts receivable are at a high point, and scale back when there’s not much coming in for a while.

To cut your off-season expenses, you might temporarily reduce your operating days and hours, or negotiate more flexible payment plans with vendors.

Advanced planning may also allow you to spread out your budget and create a more regular cash flow throughout the year, making it easier to financially prep for your next peak season as well.

Create a Reserve Fund

Once you’ve reviewed your finances, you can project your expenses and any likely off-season shortfalls. Setting aside money in a dedicated reserve account can help fill the gap.

In a National Federation of Independent Business article, Jeff Naeem, owner of a debris removal service, says maintaining a reserve account that’s separate from the operating account helps keep spending in check.

A landscaper selects plants at an outdoor nursery

Diversify Your Business

Adding new revenue streams is another way to solve a seasonal cash flow problem. For example, if calls for your lawn care or garden service come to a halt as soon as the frost hits, maybe you can put your garden labor to use in wintertime snow removal. If you’re in the construction business, you might be able to branch out into interior remodeling. Or if you sell seasonal products, consider adding some new items that are typically in demand during your off-season.

Think of ideas that will readily appeal to your existing customers, as well as those that might bring more referrals and expand your reach.

Consider a Small Business Loan

No matter how careful and proactive you are with your business cash flow management, you may still face unexpected expenses that require more cash than you have on hand. Maybe a truck breaks down, or you need to hire and train new workers for a busy-season project that’s set to start in a couple of months. Maybe Punxsatawney Phil has forecast six more weeks of winter slowdown — or a long, hot summer is melting away your usual cold-weather business prospects.

The solution might be a small business loan to help you keep your bills paid, your equipment humming and your company in a position to grow.

Your business may be seasonal, but its periodic slowdowns won’t stop the steady stream of bills and other operating expenses. The answer is a plan that anticipates the uneven cash flow and makes adjustments. Follow these financial tips for seasonal businesses, and you’ll be able to ride a smooth financial current that keeps your business running successfully all year long.