Some retail and hospitality industries see their greatest sales growth during certain seasons. For example, landscaping can be a brisk business during the summer months, while holiday decoration services can see increased sales at the end of the year. It has the best sales of the season.
Because of this, retailers and seasonal service operators often experience periods of “slow sales” each year. However, that doesn’t mean that your team should sit idle or that there are no smart strategies that can strengthen the company’s financial position. To help keep your business out of the red during times of slow sales growth, below, his 14 members of the Forbes Finance Council share their steps to ensure financial health throughout the year. increase.
1. Ensure positive operational cash flow
Get ahead of the seasonal slow season by making sure your operating cash flow is positive and securing reserves before the slow season arrives. If your business doesn’t seem to have enough cash flow to cover your costs during a downturn, you may need to acquire short-term working capital or lines of credit to close the gap.-Xan Myburgh, Backd Business Funding
2. Carefully manage cash cycles
As the business enters a seasonal recession, the financial leadership team needs to manage the cash cycle and control the working capital element to deplete earnings from other quarters. It is also important to manage relationships with banks and ensure available lines of credit. Also, work with your marketing and sales teams to promote off-season sales at discounted prices. – Bilal Surahyo, Land of Sleep
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3. Continue to acquire new customers
Continue building your pipeline and acquiring potential new customers. Delaying marketing and lead generation to a later month will inevitably cause subsequent months to be similarly delayed. Keep getting new customers and they’ll come when the holiday season is over. – Christina DeSimone Nappi, The DeSimone Agency Inc.
4. Strengthen your New Year’s marketing efforts
Don’t take advantage of the revenue and profit “surge” that may materialize over the holidays to ramp up your marketing efforts into the new year, but keep it up. Many companies tend to cut this item at times like this, so naturally the first quarter of the new year will be late. Don’t be like the herds and standards of your industry. Deploy this strategy instead. – Christopher Hahn, Fountainhead
5. Work closely with vendors to find cost savings through technology
We use two profitable strategies to maintain our financial health. First, have regular conversations with your vendors to maximize contracted services or renegotiate unused services. Then, conduct regular technology audits to ensure that you are expanding and leveraging all available automation capabilities. – Paul Blanco, Burnham Financial Group
6. Diversify your products and services
Cash flow is often an issue for seasonal businesses. One approach companies can take is to diversify their products and services to increase revenue during non-peak seasons.For example, a landscaping business that is traditionally busiest in the summer might consider offering fall cleaning and snow removal services to generate income throughout the year.-Jeff Cole, Bennett Thrasher
7. Break up large expenses and save some of your seasonal income
Think of ways to break up large expenses and pay them off in stages throughout the year. Try to stash some of the cash you brought in during the seasonal upsurge to get you through the lean period. Also, assess whether there are costs that can be reduced or eliminated in the first quarter. This sounds simple, but the goal is to have cash on hand and avoid monthly or quarterly cost hikes. – Paul Davis, Strategic Resource Management
8. Focus on long-term planning
The slow period is an opportunity to work on long-term planning. Spend time understanding and building relationships with your customers. Update your marketing materials and plan new campaigns to expand your reach. See how your competitors differentiate themselves in the market. And make sure you and your employees have the latest training to power your business. -Luz Urrutia, Accion Opportunity Fund
9. Prepare financially and mentally
Ask yourself, “Is there anything I can cut for the New Year?” And then, “Do you have a creative idea that I could implement in my business?” More importantly, never let the slow season go to waste.It’s a great time to look at the business in terms of expenses and put things in order to be ahead of the game when things pick up. – Joe Camberato, National Business Capital
10. Increase brand awareness online
Increase your brand awareness online and use your most valuable assets wisely. You should promote your business by posting on social media networks such as Facebook and Twitter, and by publishing product images on Instagram and Pinterest. This helps increase website traffic and attract new clients who may have never heard of you. – Neil Anders, Trusted Rate, Inc.
11. Secure access to working capital
Make sure you have access to working capital (either through cash reserves or the working capital facility) to keep your business running comfortably during the slow season. To ensure success, it’s important to position your business so that it can continue to operate according to your strategic plan rather than reacting based on the cash available in your bank account. – Sean Frank, Crowd Equity Group
12. Expansion into new markets
One strategy seasonal businesses can use to stay financially healthy during downturns is to consider diversifying their services and products. This may include offering add-on products or services such as maintenance plans, extended warranties, customer loyalty programs. It also allows companies to explore new markets and customer segments to take advantage of untapped opportunities. – Angelo Ciaramello, Funding Trader
13. Overestimating reserve requirements
If you know your sales are going down after the big holiday season earnings period is over, you need to plan accordingly. Make sure you have enough cash to get you through the slow season and be careful about temporary expenses during this slow season. Also, overestimate the required reserves. Double or triple your estimates because it’s much better to have extra cash than to run out of reserves. -Joseph Orseno, Tiltify
14. Be smart with cash in Q4
Cash is king in any business. Practice discipline with holiday benefits. If the holidays are your busy season and you know the first quarter of the next year will be your slow season, manage your cash wisely. Postpone capital spending or take advantage of credit to keep cash on hand. Handling cash wisely reduces stress and frees entrepreneurs to dream bigger dreams. – Todd Sixt, Strait & Sound Wealth Management LLC