Small business enterprises (SME) often experience off-peak seasons when the sales hit rock bottom and peak season when business is booming. Without a backup plan, a small business is likely to be hard hit by uncertain times. This makes it difficult for the company to pick up in time for the peak season. However, effective strategies can help you cope with uncertainty regardless of your level of working capital. Here are some of them:
A new business requires at least six months to reach a break-even point. As expected, there will be times when the seasonality of your niche will change. It is your responsibility to find out how the market will behave so that you can prepare for any uncertainties. Your business's health depends on your ability to brace for hard times and plan for seasonal dips.
Rent, power, and water are fixed costs that must be met regardless of whether it is a peak or off-peak season. During the sales peak, set some funds aside to help you pay for the fixed costs even if you do not make sales during hard times. When you fail to pay for these costs, they will start to pile up. The last thing you want is to spend the money you will get during the peak season on settling debts.
Whether you own a restaurant or a car-wash business, having a good relationship with your vendors can help you during times when the sales are slow. Vendors are aware of the uncertain times your business will be facing. Consider negotiating with your vendors to offer you special considerations, including extended payment during off-peak season. Once everything goes back to normal, make sure you pay for any outstanding debts to earn their trust.
During the end of a high season, your business will record the highest sales. Reinvesting the gains from the high season will help sustain your business during uncertain times. Use your returns to plan and budget for the coming months to avoid closing up your business. If possible, repair or upgrade your store. That way, you will be more prepared to pick up from where you left.
In as much as you may have accumulated customers over the years, you can never underestimate the power of digital advertising and websites. People will want to learn more about your business through your website. If you are not sure how to go about it, seek credible digital marketing providers such as OrderMyVideo.com. Together, you will learn how to order top-notch visuals and graphs for reaching your clients online. That way, your clients will continue to order from you regardless of their locations.
Despite the challenges you may be facing during the low season, this is the time to experiment with new promotions. The goal is to attract returning customers. For instance, if you run a bar and the low season is fast approaching, you can introduce happy hours or offer a free glass of wine for the first 100. For customers who are celebrating occasions like wedding anniversaries, you can try to invite them to mark the special occasion at your establishment.
You may have exhausted all your options to revive your business during the low peak season. However, that should not drive you into despair. If you see potential in your business but do not have enough capital to reinvest, you can approach a small-business financing instruction to help you. Before a lender offers you a loan, they will want to evaluate your business history. If possible, look for a micro-lender with a global network that helps business owners like you at reasonable interest rates.
You may have started off your seasonal business, hoping it will eventually expand into an all-year-round success. While this is a good way of testing the viability of your business, you can never whisk away the possibility of low sales during the low season. Choosing to close down or hibernate are decisions you can choose to make, but you can risk losing your customers when you return to business. The above tips can help you to remain relevant even when the low season sets in.