Monday, 22 July 2019
Seasonal peaks and valleys are just part of the landscape for most business owners.
But careful planning and strategic marketing can help most businesses stay afloat — and even profitable — during seasonal downturns.
Brett Lechtenberg is an entrepreneur and business coach based in Sandy, Utah. He says with proper planning, you don't have to suffer or jeopardize the survival of your business during slower seasons. With the right marketing tactics, you can keep your existing customers and even bring in new ones throughout the year.
He gave the example of his martial arts studio, which tends to see business slow and membership sales decline in the summer months. “This is a natural flow due to people going on vacation, having family events, or simply just deciding to take time off,” Lechtenberg says. “Many small-fitness businesses seem content to allow these seasons to negatively impact their cash flow and are content to deal with it. I advise my clients to never accept slow times but instead, to plan for these abnormalities and make great things happen.”
“When you have been in business for at least two years, you probably know your slow times in advance, and therefore it is possible to smooth out the peaks and valleys of cash flow with proactive measures,” Lechtenberg says.
He advises clients to establish a liquid emergency fund in busier times, such as a savings account, credit line, or even a CD with a strategically timed term. He strongly discourages clients from tapping into a retirement account prematurely because the penalties can be costly.
During your busy season, he suggests trying to pre-pay fixed expenses such as rent, taxes, and maintenance fees so you won't have to pay them during the slow times. You can also try to negotiate with vendors for discounts or more favorable terms, and use your extra time to assess your expenses to see where you can save. For example, determine which subscriptions or services are necessary, and which are optional.
Perhaps the most powerful way to keep generating income is to rethink your marketing plan.
Brad Bunt, a serial entrepreneur and the director of the North-Central Texas Small Business Development Center, says summer is the time to stop spending on expensive ads and rethink where you're putting your marketing efforts. It's time to move instead to social media channels, media outreach, sales events, and other lower-cost ways to keep the buzz about your business. “Core customers come in anyway during the good times, but this reminds them in the off-season. If they get a little Facebook message or if they get an Instagram or SnapChat image, it stimulates the thought, 'Hey, I need to get back in there,'” Bunt says. Here are some tactics that can help keep business buzzing.
“Even if times are slow for traffic, a well-run business always has raving fans who are willing to take advantage of great deals a business may offer,” Lechtenberg says. He recently celebrated his business' seven-year anniversary with a “Black Friday in May” sale combined with a buy-one-get-one offer which resulted in a five-figure profit he wouldn't have seen otherwise. He suggested plotting out sales events in advance so you can build excitement, order inventory, and get rid of items that just aren't moving.
Bunt likes the idea of holding special events on site such as a customer-appreciation party with mimosas, entertainment, or maybe even a barbecue. “It really attracts the core people because they already have a relationship. And also those people talk about it to all their friends and it brings in additional people,” Bunt said.
You can also try membership sales, timed discounts, inventory blow-outs, or selling old or excess equipment to make room for new.
Lechtenberg says one of his clients, a dog-training service, uses the slower months to create videos about the company. They use them online and in other marketing channels to position their company as a leader in the market. The production is a one time investment and, if done correctly, can provide passive income for many years.
Media outreach is another way to create buzz and also establish your position in your industry. Your local media outlets probably won't respond to an announcement about your tenth anniversary sale. But they might be interested if you can tie your business to an existing news hook or a charity drive.
For example, generate weather-related promotions or perhaps health reminders if you're in a relevant field. Pay attention to what the media is reporting and see if you can tie your business to the stories of the day in a meaningful way. “I encourage all clients to plan and execute something monthly that is potentially newsworthy,” Lechtenberg says.
If you're friendly with compatible businesses, try some cross-marketing efforts. A photographer, salon owner, and flower store could team up to offer wedding packages. This can save money on promotion and introduce an entirely new clientele to their partners.
You can also experiment with influencer marketing. Bunt worked with an entrepreneur who sells clothing and jewelry. The retailer gave a few choice items away to social media influencers who have thousands of followers in exchange for an endorsement, which drove more sales than an ad alone would have.
Platforms such as Constant Contact and Mail Chimp offer small businesses inexpensive email marketing programs. These platforms are easy to use and are an excellent way to announce sales events, new products, referral bonuses, and exclusive deals. What's more, they also provide valuable data to help you be even more precise in your messaging and targeting.
For retailers, online shopping platforms such as Shopify, Etsy, or eBay allow you to reach a global market easily and affordably. Your slow season is a great time for learning the technology and getting your online store up and running for your busier time of year. “I have an individual who, within one year, went from zero to $3 million in online sales,” Bunt says. “He was already doing well with retail anyway, but this branched him out to all the people that used to travel in, to purchase from him. This kept him connected.”
Whatever you do, Bunt says, don't keep your doors closed for too long during your slow season. Your customers will go elsewhere and may never return. Even ski resorts shift their focus to mountain bikers in the summer. “Some people like to close up during the slow times. I don't recommend that. It takes so much energy to reboot and restart,” Bunt says. “Never stop the momentum in your business.”
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