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How Do You Manage a Seasonal Home Business?

by Jean Murray on February 12th, 2009

I talked today with a photographer who says he has a very erratic business flow.  One year, he will be slow around the holidays; the next year, his holidays are busy.  Then the following year, he might be slow in July.  Go figure. He says his business is “seasonally unseasonable.”

Problems with Seasonal Businesses. The problems with seasonal businesses are well-known:

  • You have to plan for those down times of low cash flow
  • You can’t plan vacations for the busy times
  • You can’t decrease your availability in the slow times, because you may risk getting an existing customer upset with you.

The Encyclopedia of Small Business says that the two most important keys to successfully managing a seasonal business are managing cash flow and hiring the right employees.  I agree.  Even if you don’t have employees, you must manage your time and your money.

Types of seasonal businesses include:

  • Those which have sales only during a specific season, like Christmas or Halloween
  • Those which operate only during one season, like a business owner who gives swim lessons in summer
  • Those which peak in one or more months, with slower activity in the rest of the year, like retail businesses which have most of their sales during the holidays but which still make sales in other months.

Some seasonal businesses are specific to particular seasons - ski resorts, pools (in northern climes), golf courses, …? These businesses still have to pay bills all year round, so budgeting can be critical. This is where your cash flow management skills come in handy.

Benefits of Seasonal Businesses. The biggest benefit I can think of is your ability to “take off” the rest of the year. I talked with a home business owner who sells vegetables at farmer’s markets in the summer.  She spends her winter months planning her planting, and her spring months getting ready.  In the fall, after the crops are gone, she cleans up her garden, reviews sales to determine what to sell next year, and works on her website.  If it were me, I’d be doing all that planning in FL instead of IA! That’s great if she has either another source of income or enough money to keep her going during the winter (and finance that trip to FL).

Combining Seasonal Businesses to Manage Cash Flow. Some seasonal businesses combine several businesses together.  For example, I talked last weekend with a garden designer who does freelance writing about gardening over the winter.  Combining jobs makes sense if you have the kind of business that can make a transition from one season to another.Other business sell different products in different seasons.  For example, you could sell outdoor products in summer and indoor products in winter (or vice versa, depending on where you live.  To be successful, a home business owner must be flexible, persistent, and creative.

How about you?  Is your home business seasonal?  How do you handle the seasonal fluctuations in sales?

Tags: , sales in home businesses, seasonal businesses

POSTED IN: Home Business Opportunities, Home Businesses in Troubled Financial Times, Questions about Home Businesses, Seasonal

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