The Seasonality of Business

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It’s impossible to create a business that doesn’t see some kind of down time throughout the year. Makes sense for ice cream shops and Christmas tree lots, but those down times hit everyone- even online business.

No matter what kind of company you run, you’ll notice there are natural times of ebbing and flowing with work and revenue. It can happen with the change of seasons, with the school calendar, or with the coming or going of new taxes. But I think what it all boils down to is people.

I believe ebbs and flows happens because a business is a direct correlation with people. People ebb and flow. Since business are built of people and are run by people, business ebbs and flows. And that can definitely cause some problems like-

    • Cash flow: Without the consistent incoming revenue that you experience in your peak time, your cash flow will be much smaller. Your need to have sufficient cash flow to get you through the slow season and still have enough to keep everything running when business picks up again. To do this, you might start considering scaling back on expenses like marketing and advertising to keep up with other more ongoing overhead necessities.
    • Hiring: You need to be weary of going on a hiring rampage during your good times. Just because you have a lot of work and money to spend on new employees at one point of the year doesn’t mean you’ll have the means to keep covering 10 new salaries later this year.

 

  • Inventory: If you’re a product-based business you have to consider your inventory. It’s easy to see the demand during peak times and expect you’ll always need that much inventory on hand. The problem is you might overspend and have too much product in your down time which hurts your cash flow. Or vice versa- you forecast during your low time and then don’t have enough inventory to keep up with the demand in your peak time.

 

Forecasting these ebbs and flows of business can be hard. Take ConvertKit for example. During our first year as a growing company, we found out that business slows down for us in the summer because all our potential customers are on vacation or with their kids or just generally not worrying business decisions.

But before hitting that first summer season, we just didn’t know that lull would be something we’d be dealing with. And let me tell, it wasn’t easy. We had to learn to shift our expectations during that down time without knowing for sure when it would end. At that point, we hadn’t considered how to survive that seasonality yet because we had no idea it was coming.

How to survive the seasonality of business

Since these ebbs and flows are inevitable, you’ve got to figure out how to deal them. Here are a couple ways you can start being more proactive in your yearly planning so lessen the blow when the low times come.

Identify the ebbs and flows

This is absolutely the first step. Knowing when the highs and lows are coming will help you plan accordingly. For us, we know that summer is slow, but when September and October hit, everything is going to ramp back up again. This information helps us schedule everything from promotions to our vacation times. Now we know we should probably schedule vacations during the slower summer times, but we should absolutely be all hands on deck during the fall since it’s our busiest time.

The best way to identify the ebbs and flows?

Track your data.

You can’t predict these fluctuations if you’re not tracking your data. Tracking your data helps you make analytics based decisions instead of assumptions. And let me tell right now – assumptions will end up killing you.

So make you sure you’re watched your Google Analytics or your Kissmetrics, or whatever you’re using. Just keep tracking!

google analytics helps you keep track of your data

Create a counterbalance.

This means you overplan during the busy times so you’re not left with nothing in slow in time. It’s like a squirrel hoarding his nuts in the summer so he has food in the winter.

One way we counterbalance is by booking more webinars during the busy months when people have their head in the game. It makes sense that no one wants to do webinars in the summer months when their audiences are at the beach. For you, it could mean running seasonal promotions to drum up more business during the slow times or launching an extra product during the busy seasons.

Use the downtime to plan.

Don’t resist it. This step is a little contradictory to the last one, but to each his own, right? If you’re more into leaning into that down time, do it!

Utilize that slower time to your advantage instead of feeling bad that you can’t execute at the same level of as your high seasons. Dig deep into some high level planning. Strategize how you’ll hit the ground running when the busy season starts again. Meticulously pour over all your bookkeeping to make sure you’re spending money in the right areas. Do what you need to do to get your house in order.

Get ahead of the game

You need to be flexible and find what works best for you, your company and your audience so you don’t get floored by a slow season and you make wise decisions during your peaks. The highs and lows are coming whether you see them or not, so get ahead of the game and be vigilant.

How have you seen seasonality in your business? What did you do to soften the blow? I’d love to hear about your experience and what you learned from it in the comments.

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Do you know a friend who’s struggled with seasonality in their business? Share this blog with them so they get ahead of the game for next year. They’ll love you for it!

Dani Stewart

As a daughter of an entrepreneur, the wife of an entrepreneur, and an entrepreneur herself, Dani has lived and learned all sides of creating and growing businesses. She is excited to bring all that life experience as well as a decade of crafting content to the ConvertKit community. She is a part-time baker, dinner-party planner, and lover of good bourbon living the simple life in Nashville with her husband, Sean.

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