September is here and the children have returned to school. This serves as a reminder that the season is changing and fall will soon be here. It also reminds us that seasonality is something that can impact our business as well.
Changes in weather and season both pay a significant part in our daily work lives. Seasonality impacts everything in our lives from when our target customers may want our products and services and more importantly, when they may not want to engage with our business. These seasonal fluctuations must be identified so that we can adjust our operations accordingly. If sales are declining, what actions are required to reduce expenses during this period? This continuous cash flow management is even more important to the business when looking at significant external changes.
Weather patterns can have similar impacts. Imagine the Florist who counts on Valentine’s Day as a period of positive cash flow. Increases costs in staff and production are only part of the equation. It is not uncommon for winter storms to pop up during this period. What contingencies will need to be implemented to handle these seasonal changes? How are deliveries impacted? What do we need to change?
Seasonality in business is more than the change in the weather and more than the “timing” of sales activities. It is all of these and more. Seasonal changes in weather can impact transportation, costs, sales, staffing, etc. These seasonal changes required monitoring and adjusting operations.
To help plan for seasonality, take a look at your past financial statements including sales sheets, then look at the weather on the times that have lower than normal sales activities to see if there have been any impacts. You may be surprised at the pattern that develops. Statistics Canada can also supply monthly sales figures by product or service.
If you are starting a new venture, be sure to research the seasonality of sales in your industry. Doing this will provide you with the information needed to adjust expenses accordingly or look at alternative sources of revenue.
There is no exact science to this task; rather we are looking at “what if” scenarios. We can look at historical references, past financial performances and other external factors. Seasonal changes and external factors, give us the tools for making the changes required to be successful so that we are not left out in the cold.
If you would like to discuss this or other business related topics with a Business Consultant contact the Halton Region Small Business Centre at 905-825-6000, extension 7900 to book an appointment.