Seasonal fluctuations impact sales across various industries. As a small business owner, you must learn to adapt to these changes in order to remain profitable throughout the year. Here are a few tips on how you can overcome seasonal fluctuations.
Most seasonal fluctuations are predictable, so it’s a good idea to have a detailed knowledge of the cycle and plan your business strategies accordingly. For example, as summer approaches, if you sell clothing, slow down production on heavy winter jackets and produce more summer dresses. Doing this will help you cut down on storage costs and avoid wastage of extra unsellable products. Running sales at the end of each season can also help you get rid of the remaining stock.
Prepare for peak times
Seasonal fluctuations mean that there are times where your business will flourish and sales will increase. During peak times, hire temporary employees or freelancers to help with extra work, but be careful not to hire too many because that will cause your business to haemorrhage money. If you are in the retail industry, ensure that you have enough inventory to meet the high demand.
Create seasonal pricing strategies
To maximise your business’s profits during the busier months of the year, it is crucial that you create a proper pricing strategy. During seasonal holidays such as Christmas, most customers will not take time to find out what sets your products apart from the competition. Competitive prices and incentives such as free shipping are the only ways to ensure that your business exploits the increased spending during the holidays.
Monitor your cash flow
Cash is one of the easiest ways to monitor seasonal fluctuations. The three main items to consider when it comes to small business cash flow are cash liquidity, revenue, and expenses. If you have high revenue, consider increasing your production to increase profits. This will, of course, result in higher expenses, but that shouldn’t be a problem as long as profits increase. Maintaining cash liquidity is also very important because it helps you deal with business emergencies and invest in unexpected opportunities.
Seasonal fluctuations – where to find out more
Tower offers a full range of finance solutions – products and services aimed at business development and growth. Regardless of how much capital you need or how big you are as a company we can normally help. Our transaction size starts from as a little as £1,000.00 and we have arranged funding facilities for brand new starts ups with little to no trading history to those turning over millions of pounds.