3 Ways for Seasonal Businesses to Maintain Positive Cash Flow

3 Ways for Seasonal Businesses to Maintain Positive Cash Flow

 

If you run a seasonal business, you are probably very familiar with the difficulties of maintaining positive cash flow during the off-season.  Perhaps you are a retailer who struggles to generate business during your slow times or maybe you provide products and services that are needed more during the summer and less during the winter.  Whatever your business situation is, the seasonal impact on cash flow can be stressful, but it is a manageable problem with a little advance preparation. Here are 3 things that can help:

 

1. Expand your business offerings
One of the ways you can continue to have strong sales in the off-season is by providing new products or services to your customers.  Think of some related initiatives you can incorporate into your business plan that will be relatively easy to execute. If you are a bathing suit retailer, for example, perhaps you can expand your product mix to include athletic apparel that won’t be as affected by the changing seasons or vacation schedules.  If you are a landscaper whose services are not needed once the weather gets cooler, consider adding snow removal or house repair to your list of services. Expansion can bridge the gap between your slow and busy times and also bring in new clients whom you might not otherwise attract.

 

2. Be productive and proactive in the off-season
When business slows down, it’s a good time to do some basic and necessary housekeeping.  Take stock of your business. Look at what worked and didn’t work in the past year and brainstorm ways you can improve on the things that did not perform optimally.  If you are a retailer, figure out how to manage your excess inventory and develop some promotional programs to try to get rid of it. At the same time, figure out how you can do more of the things that worked well.   Perhaps you need some new equipment to keep up with demand, some repairs to your store or new employees to help you run the business. Investing in business upgrades during down time will help your cash flow in the long run if the improvements increase sales.  It is also a great way to ensure your business will be running as effectively as possible when things get busy again.

 

3. Consider Financing
It’s no surprise that you will need cash in order to implement numbers 1 and 2.  You have to spend money to make money, but as a seasonal business owner, you know that cash can be hard to come by in the off-season when sales typically decline.  Luckily, there are several types of financing that specifically help small business with cash flow. Factoring and reverse factoring are two popular types of financing that ExpoCredit offers, which provide cash for your slow moving invoices.  The money can be used for any of your business needs and you don’t have to wait until your suppliers pay you to access it. Click here for more information on how ExpoCredit can help. 

 

Regardless of how seasonality impacts your business, it is important to plan ahead to ensure you stay cash positive.  Whether you expand your products and services, create new promotions, buy new equipment, hire more employees or obtain financing, you are taking important steps to ensure your business is healthy all twelve months of the year.   

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