Regardless of size or industry, the steps business owners take to navigate seasonal peaks and troughs in their annual business cycle are likely to have a direct impact on overall success, productivity and growth. While all businesses experience fluctuations in trade and sales throughout the year, seasonal businesses in particular need to focus on seasonal planning to ensure smooth running operations, during both busier and quieter periods.
From cash flow to continuous customer engagement, effective planning and preparation is critical in keeping seasonal businesses in healthy competition within their vertical, paving the way for a more diverse marketplace. At FedEx, much of our own experience in this area has been gained from managing our own ‘peak periods’ – allowing us to identify some essential practices for dealing with seasonal supply and demand. Our top tips include:
1.Get on top of cash flow
Irrespective of fluxes in your business cycle, there will be staff and suppliers to pay throughout the entire calendar year. Having a forecast drawn up based on sales from previous years will help you to manage cash flow more efficiently, and could help you identify potential or growing streams of revenue. Introducing a complementary product line/service during quieter period can also help level out cash flow e.g. if you’re an outdoor landscaping business, offering property maintenance during winter months can help maintain a more regular flow of custom. Either way, it’s important to have provisions in place to cover and manage costs all year round.
2.Invest in seasonal staff
If you’re a business that relies heavily on the support of seasonal staff to manage increased demand during certain times in your business cycle, you’ll know how critical an effective recruitment and staffing plan is. Having seasonal staff to focus on small yet significant tasks, such as sales and customer services, will ensure your core team are able to continue developing business operations without service levels dipping during busier times.
During busier periods, it’s essential your business is fully equipped with the necessary resources to ensure every opportunity for a sale is picked up and processed efficiently – from the initial order right through to final delivery. If yours is a business with international customers, the ability to service these customers in a timely fashion, despite the distance, will strengthen your position in the global marketplace. Seek advice from your logistics provider on seasonal strategy and make them aware of your peak sales periods both in the UK and overseas, so they can flex to meet increased demand and offer extra support as needed.
4.Promote your business during off-peak
As opposed to just promoting your business in the build-up to your busy period, make sure you carry the momentum into your off-peak periods too. You can do this by offering discounts and holding out-of-season sales to help uphold higher revenue levels. Offering such promotions will also help maintain relations with customers as well.
5.Diversify your business
Being a seasonal business gives you time to properly put a strategic plan into action and focus on product development, to help level out any seasonal dips. To propel your business forward it’s important to expand your existing customer reach, and selling online and looking to enter international markets is a popular option. Targeting new customers both nationally and internationally could boost your turnover and grow your business as a whole. And when you consider 50% of British small and medium-sized enterprises (SMEs) believe their trade will be both domestic and international in just five years’ time, exporting holds a lot of potential for SMEs.
Seasonal business model: Lumie
The end of British Summer Time (BST) in particular is often a prominent turning point for many seasonal businesses; falling on the last Sunday of October, it signifies the start of a busy period as we countdown to Christmas. For others, it is the physical changing of the seasons that calls for a shift in operations. For light therapy provider Lumie, an SME which develops products to treat Seasonal Affective Disorder (SAD), both of these factors have a big impact on sales over the winter months.
The company’s monthly consignments double during this period – an increase that accounts for 20% of Lumie’s total annual shipments, in comparison to the 2% seen throughout May to July. Similarly, its international shipments surge in October as well, with an increase in demand seen across Northern Europe and Scandinavia as well as North America and Canada where daylight hours are lower during winter.
In preparation for the influx of orders, Lumie works diligently during their quieter months to address its staffing, scheduling and stock listings well in advance. And at FedEx, we work closely with them to successfully manage expectations from customers across the globe and ensure service levels remain consistent throughout the year.
Businesses will always experience seasonal fluctuations, some as predominately as Lumie, some not. Either way, the above tips highlight how important forward planning and preparation are in successfully managing the seasonal rush allowing your business to grow. Remember, profitability should be an all year round bonus for businesses, so during quieter periods on home soil why not explore international markets, and develop new opportunities overseas?
By David Poole, Managing Director of Sales, UK South, FedEx Express and FedEx UK Ltd