Tree (2)

Managing working capital is crucial to running a business, and if yours is affected by seasonal ups and downs, keeping enough working capital throughout the year can be even more of a challenge. But there are a few things you can do to get the best out of your busy times and make it safely through the slow ones.

Temporary closure

The first measure is a radical one — completely closing your business in the off season. It sounds like a bold move, but if your business is highly seasonal it can make more sense than struggling to maintain the same running costs without the same revenue.

Of course, complete closure means you won’t make any revenue at all, but a shutdown period allows you to minimise expenses like paying for staff and stock. To decide if this option is right for you, take a look at historic takings in the slow season and compare that to your average monthly running costs — this simple equation will tell you whether it’s worth staying open or not.

Partial closure

If closing completely seems like a step too far, you could also think about reducing your opening hours or staying closed for an extra day per week, for example. Retail and hospitality businesses often do this, and it means lower staffing and stock costs and more time for other business activities.

Like closing completely, the aim of a partial shutdown is to reduce your overheads in line with reduced revenues, so the right reduction depends on your individual business — but getting it right might make the difference between getting into the red and breaking even.


As well as experimenting with different opening hours or completely closure, there are other ways to keep your working capital healthy in the slower. By changing your business offering, you can potentially bring in a different kind of customer in the slower season, and replace some of the lost revenue.

Examples of this kind of adaptation include stocking season-specific products, or special offers that can only be redeemed at certain times of year. The specifics of how you adapt will be dictated by your customer base and sector — but the high-level message is that there might be things you can do to boost revenue in the slow season by broadening your horizons.

Use the extra time wisely

So far we’ve focused on things you can do to minimise the damage caused to your working capital in the slower months. But there’s another angle worth considering — using the extra time available to get everything ready for a big push when the business is on the up again.

Activities like refurbishment, training, and market research naturally take place in slower months, and all these things mean you’re better placed to take advantage of the busier times. The down season is also a good time to bed down new systems or processes, to make sure you’re running like clockwork when it matters.

One more valuable but easily forgotten way to use this extra time is to take a break — if you take the chance to let yourself and your staff enjoy some rest, it’s more likely you’ll all be ready to put in 100% when things pick up again.

Finding the right funding

For some of these strategies, you might look into business funding to help you carry out your plans. The right kind of funding for your business will depend on a variety of factors, but a good first step is to look at the various kinds of business loans and working capital finance available on the market, which are designed to cover short- and medium-term costs.

Invoice finance is a way to get paid faster for completed work if you invoice your customers and offer payment terms, with a few variations that suit different business profiles. For more general-purpose working capital requirements, revolving credit facilities are a flexible alternative to traditional bank overdrafts — and if you take payments via card terminal, investigate merchant cash advances, which have proportional repayments that go up and down with your monthly card takings.


However you decide to manage your working capital, running a seasonal business doesn’t have to be a headache. With the right strategy, and maybe some business finance set up, you don’t have to dread the off season — and you might even look forward to the big refurb or marketing project it brings.

By Conrad Ford, chief executive of Funding Options