Handling Seasonal Differences in Cash Flow

In May 26, 2017

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Summertime means lots of change for many industries and for many areas of the country. For example, summertime is usually booming for beach towns and vacation hot spots, while it is usually a down season for university towns and ski resorts. Countless companies and organizations are forced to deal with the ever-changing ebb and flow of income and customers. Doing so in an intelligent and well-planned manner is an important step toward fostering long-term success. Here are a few tips that can help you do just that.

Use Data. The digital age has made accumulating and analyzing data easier than ever before. taking some time to analyze the information that you have about your business history can help you make smarter plans for the future.
Use the Right Hiring Structure. Companies that experience drastic differences from season to season may wish to consider different forms of hiring, such as using subcontracting or temp workers rather than bringing a board full-time employees who will end up overwhelmed during the busy season and underutilized during slow seasons.
Control Variables Carefully. Apart from your employees, your business likely has many expenses that are variable. Common examples include energy bills, inventory, and your hours of operation. With a bit of foresight and planning, you can adjust these expenses in order to find an optimal balance that allows you to thrive during your busy seasons, and survive during your slow seasons.
Seek Financing. Ideally, borrowing money should be done in order to invest in the future, not in order to stay afloat during the present moment. However, some businesses simply do not have the luxury of making this choice. If worst comes to worst, you should have a plan and know how you could possibly obtain the funding in order to keep your business going until times are good again.
Broaden Your Customer Base. One way to minimize seasonal differences is to work on expanding your customer base and diversifying your clientele. For example, many bars and restaurants in college towns with slow summer seasons offer special summer happy hours in order to bring in more of the remaining students and local residents of the town during these months.