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If you own a seasonal business or are thinking of starting one, you may be concerned about downtimes - and consequent loss of income. But just because you have a busy season doesn't mean you can't drum up more business during slower periods. Read these pointers from Intuit for maintaining cash flow and maximizing your time... year-round.
Manage Cash Flow
This is your bottom line. To mitigate lulls in your revenue, stick to a budget throughout the year. Consider creating a special cash reserve to see you through the slow months. Invest your income during peak season and set money aside whenever you can. A cash flow forecast can identify your income and spending patterns. As you try to predict what’s coming down the road, include a worst-case action plan to offset any unforeseen surprises.
Invoice Management
Get upfront percentage payments from clients as frequently as possible. Your cash flow will improve and you’ll discourage late or slow-paying customers. Ask your suppliers for extended payment plans. Instead of incurring heavy payments on goods you have not yet sold, you can spread them over 6 months or a year.
Investing in financial management software will help you manage job costs and profitability. Intuit’s QuickBooks Premier lets you see which products and clients are making you money... so you can capitalize on your profitability.
Alternative Sources of Income
If you need or want to generate some extra cash flow during the off season, consider diversifying your business offerings. For example, if you run a landscaping business that's thriving in the summer, consider offering snow-clearing services in the winter. Making a change to your business's purpose might require additional business licenses or permits, so be sure to check with the government. Here’s a helpful link: http://www.canadabusiness.ca/eng/search/pl1/.
If you're broadening the scope of your business, think about a government loan or grant to help. Loans and grants often go unclaimed, so take the time to apply - and you could luck out. The Canada Small Business Financing Program offers various levels of financing to a range of industries. Find out more here: http://www.canadabusiness.ca/eng/summary/1218/
Maintain Seasonal Labour
Hiring temporary employees is an obvious way to reduce your financial outflow during the off-season. But recruiting and training temporary workers can be cost-intensive for a small business. To offset hiring expenses, take steps to encourage your employees to come back year after year - like a resigning bonus (even a small one)
A quality work environment is essential. It can take time for a group of new staff to gel, so it’s up to you to encourage camaraderie. Staff events or group lunch breaks can be good moves. Offering a season-end bonus or other benefits can make you a valued seasonal employer. During the off-season, reach out to employees by organizing occasional gatherings or connecting on social networks. Consider sending cards on birthdays or holidays. Such gestures will keep you on their radar.
Take Advantage of the Quiet Times
Off-season months are yours to review, regroup, and take a look ahead. Make the most of your time so that when you open for business your customers will be waiting. Budget for the coming year, tackle renovations and maintenance and update your website. Now is your chance to:
- Research your competitors
- Attend conferences and join entrepreneur networks
- Visit trade shows
- Devise new value-added products or services to offer
- Polish your value proposition (to make marketing easier during peak times)
- Survey your previous clients for insights to help you grow your business
Get busy marketing. You’ll want to seize this chance to promote your business: reach out to your customers and recruit new ones. Consider offering off-season sales or special rates.
Intuit understands the specific needs of builders, contractors and landscapers - people with seasonal businesses. QuickBooks Premier Contractor Edition is designed to manage your job numbers, create estimates, track orders and more - season after season, as you grow your business.
Are you a contractor? Try QuickBooks Premier FREE...
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