5 Big Challenges That Seasonal Businesses Face and How to Overcome Them

Updated on: 04 Jan 2024 // 4 min read // Business Loans
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Running seasonal businesses like wedding planning, tourism, or festive product manufacturing is no mean feat. One needs to not only cater to a huge audience in a short span of time but maintain operations during the off-season as well – which may last for a better part of the year. As such, there are some challenges inherent to seasonal businesses which need proper addressing so that the peak months can bear the brunt of a quiet year with ease.

Here are the 5 major challenges gripping seasonal businesses and the ideas to deal with them effectively:

1. Maintaining Relationships with Suppliers

The importance of building strong relationships with key business suppliers is not lost on any entrepreneur. However, seasonal businesses run the risk of turning away suppliers due to the repeated cycles of infrequent orders followed by large-scale orders. One way of overcoming the problem is placing your bulk orders towards the end of your business season.

Rather than waiting for the off-season to end, it is advisable to take stock of your inventory immediately after your peak months when you have both revenue as well as time at hand. This helps suppliers save storage and warehousing costs, providing you with bargaining power in order to negotiate better payment terms. This also gives the suppliers a bigger window to deal with any immediate orders that you may require.

2. Building a Loyal Customer Base

Given that seasonal businesses serve customers for a very short period of time, attaching them to a particular brand may seem impossible. However, the issue needs to be tackled as loyal customers not only bring in the revenue but spread positive word-of-mouth as well. Therefore, it becomes necessary to remain visible through the entire year and remind your customers of your presence frequently.

Internet and social media make the job much easier. Offer first-time customers incentives to connect with you online and make the most of it. Implement creative ideas to stay in touch with them – be it through contests, polls, or even posting regular updates. Inform them of any offers, ask for their feedback, and send personalized e-mails – there is a lot one can do. Staying in touch all through the off-season is the only way for seasonal businesses to build a loyal customer base.

3. Planning Your Peak Season

While off-season sure is a challenge, the peak season offers plenty of them as well. There is a large audience to deal with, the services to provide and any malfunctions or shortcomings to account for. As such, forecasting is an extremely important component of seasonal businesses. To add to the challenge, there is no specific formula to rely on for accurate planning – just your business expertise.

Furnish your inventory and explore avenues like marketing, increasing staff and opening hours to maximise efficiency. Take any necessary measures to ensure cash reserves for the rest of the year. It is even advisable to apply for business loans online so that operations can be maintained smoothly during the busy months. Bear in mind that any negligence during the peak season will not only impact your performance but survival as well.

4. Building Alternative Income Streams

For seasonal businesses, off-seasons can get really slow and dull. There is a small staff to maintain, bills to pay and just the cash reserves to rely upon primarily. Hence, building alternative income streams is an idea worth considering to provide your income a much-needed addition. While it may seem like a diversion from your core business, the revenue collected can go into strengthening it only.

Diversifying allows one to maintain a steady income flow. Moreover, the diversification can be an extension of the current business only – an ice cream shop can expand into a sweet treat shop, for example. Facilities like unsecured business loans, which rely on only the entrepreneur’s creditworthiness and don’t require collateral, aid diversification to a great degree.

5. Operating Through the Off-season

Off-season operations are perhaps the biggest challenge any seasonal business faces. While there is a marginal reduction in operational costs, the drop in revenues is drastic. The cash reserves start depleting fast and if there is a flaw in planning, the survival of the business comes under threat. The best solution is to find customers during the off-season and the best idea is to generate off-season excitement.

Marketing off-season-exclusive deals are perhaps the best method to generate excitement. Promoting festivals well in advance, and offering lucrative deals to first buyers (even on a monthly basis) – all ensure you maintain a steady business throughout the year. Offering incentives to your staff to bring in business during the off-season can also work towards achieving this end.