How To Take Advantage Of Seasonal Business Trends
Many things in life are cyclical, and in the business world, taking advantage of these cycles can help with everything from increased sales to generating more working capital.
Staying optimistic year-round
Based on recent data from Wells Fargo and Gallup, small business optimism was at its highest level in seven years during the last quarter of 2014. This was attributed to increased revenue, better cash flow, more hiring and greater access to credit.
“The overall [Wells Fargo/Gallup Small Business Index] score speaks to the general improvements that many small businesses experienced in 2014,” Lisa Stevens, head of small business at Wells Fargo, said. “With the economy improving every day, many business owners are seeing stronger revenues and are feeling a renewed sense of confidence and expecting an even better year ahead.”
This isn’t terribly surprising news coming on the heels of the holiday shopping season. However, the question for many small business owners is how to keep these positive developments moving forward as the seasons change.
The first step is understanding how seasonality affects your business.
Business success in fall, winter, spring and summer
Some small businesses will be more directly influenced by seasons than others. However, all businesses can depend on some kind of seasonal factors impacting their bottom line.
Generally speaking, different seasons will bring high and low consumer activity. For instance, many businesses see a slowdown in activity during summer. Meanwhile, thanks to the holiday shopping frenzy that begins to pick up in November, a lot of businesses get a boost during winter.
Look over your books from the recent past to help determine when your high and low periods are. Do you notice that during the fall you typically go a month or two with significantly reduced sales? Perhaps you’ll discover a spike in activity during the spring. Either way, once you know how seasonality tends to impact your specific operation, you can begin to work on ways to contend with slow periods and make the most of strong stretches.
Benefiting in slower periods
A seasonal slowdown in your business may seem like a negative, but it can also present an opportunity. For instance, if you find yourself working long hours over the spring and summer, fall and winter may be the perfect time to take a little rest and relaxation. Also, if you’re incredibly busy during a high period, a low period is the ideal time to work on business plans you may have put on the back burner due to lack of time.
There are also ways to give your business a boost during slow periods. If a seasonal slowdown is approaching for your business, consider kicking your marketing efforts into high gear. Increased advertising during traditionally slow times of the year may pay off in increased customer activity.
A helping hand when you need it
Seasonality can provide a bigger problem to certain businesses. If you find yourself unable to keep up with financial obligations due to seasonal factors, it may be time to consider your small business loan options.
Whether it’s a traditional working capital loan or a merchant cash advance, there are many options at your disposal. The latter option also offers the added benefit of a flexible repayment system where you only pay off your loan when you get paid by credit card users.
Loans can give you the cash you need to ensure employees can stay on staff and your enterprise is able to withstand a lean time of year. Always remember, no matter how slow things may get at certain times of the year, cycles mean things are constantly moving and a stronger business period is always around the corner.