For most seasonal businesses, it’s all about the peak season. During those months, whatever months they may be, business booms, the days may be long and there’s more than enough work to go around. But what happens to that seasonal business when the off-season arrives?
And that’s the challenge that many owners of seasonal businesses approach by choosing the easy route — hiring additional staff in time for the peak season, laying off that same staff in the off-season and then hiring again the following year. After all, as an owner of a seasonal business, you don’t need to be paying the extra salaries during the lower revenue months, right?
However, there are two problems with this model. The first that is by seasonally hiring and firing employees, you risk losing good people — especially in your back office administrative staff. Your hard-working, dedicated employees are not necessarily going to sit around waiting for you to hire them back next year.
The second is that the success of your business is entirely dependent on a prosperous peak season to carry you through the off-season. If your business specializes in the sale of patio furniture, for example, what will you do one year if a particularly rainy spring and summer lead to lower than average sales? Will your business have the cash flow to sustain itself until the next peak season?
Complementary product or service
The solution to this problem is to turn your seasonal business into a year-round business by finding a complementary product or service to sell in the off-season. Think of the landscaping company that beautifies lawns from May to November and offers snow removal services from December to April — two different services that allow the landscaping company to operate year-round.
Here’s another example. Summer is peak season for walking tour companies in Jasper, Alberta. The really successful companies are the ones that have created winter ice walk tours as well.
Some complementary offerings may not seem as obvious. The best example we’ve seen is at the Sign of the Skier on Yonge Street in Toronto (and no, they are not one of Smart Foundations’ clients). In the winter, this store sells ski equipment (obviously), a product that isn’t highly sought after in the warmer months. And so, in the summer this store transforms itself into the go-to place to purchase outdoor living furniture. That’s right, patio furniture.
And to the best of our knowledge, they do quite well in both seasons.
Get creative to find a complementary business model
To choose a complementary business model, you need to thoroughly research your customer base to find out what they would also be interested in purchasing from you. Talk to them. Ask them what they would like to see. Get creative and go into this process with an open mind because you never know what will come out of it. (Remember, if a ski shop can sell patio furniture…).
If you look hard enough, you will find the perfect product or service to offer during your seasonal business’s off-season.
As a small business owner, outsourcing is a strategy that should be embraced. We’ll tell you why in our next blog post.