Article provided by Lulalend
With winter just around the corner, many businesses will be going into the low season. This means fewer customers, therefore, less revenue. The trick to not just surviving this period, but making it work to your advantage, is to have a plan for managing your cash flow as well as using the time to prepare for future success.
With this in mind, we’ve put together four tips for businesses to manage through their quiet months:
- Stick to a plan
- Take advantage of the downtime
- Plan for the busy season ahead
- Learn and learn again
1. Stick to a plan
Low seasons come around every year and should not take you by surprise. Every successful business should have a plan in place, much like they’d have a plan for the busy season. To start, don’t base your slowest season’s plans on your busiest season’s results. It won’t take long for this type of planning to cause serious problems for your business finances.
Your plan should anticipate seasonal fluctuations and adjust accordingly. If revenue is lower, you will need to cut costs. Potential areas for seasonal cost savings include:
- Fewer operating hours
- A reduced workforce
- Fewer or smaller inventory buys
In addition to cutting costs, consider where you can leverage existing assets to generate income. You could leverage assets by:
- Selling off excess or aging inventory at a discount
- Securing a line of credit against inventory, equipment, and property
- Renting unused equipment to other businesses
2. Take advantage of the downtime
The slow season is the one period of the year when you have time to focus on areas you may ordinarily not have time for. As you get close to the slow season, prepare yourself to take advantage of the time it provides.
Plan to plan
The slow season is a great time to develop roadmaps for your business. Now is the time to determine what aspects of your business need attention. Think about how you can best prepare your business for the uptick in customers, transactions, complaints, and everything else that comes with the busy season. Be prepared to plan for these busy season realities as the slow season arrives.
Here are some common areas that often go overlooked as you grow your business
- Employee benefit packages
- Updated business plans
- Marketing strategies
- Organizational roadmaps
Areas that deserve your attention vary depending on your business’ industry, maturity, growth, and other unique factors. The best way to prepare for your slow-season planning is to identify areas that deserve your attention.
Take control of administrative tasks
Before the slow season begins, identify administrative tasks that need your attention.
Your administrative tasks will vary depending on the nature and stage of your business. But, there are some common administrative tasks that many business owners avoid during the busy season because they are either too time-consuming or boring:
- Tax strategy
- Staff growth and outsourcing needs
- Internal policies and procedures development
Whether you have neglected these tasks in the past, or you simply need a good chunk of time to get these tasks completed, be ready to knock them out when the slow season provides time.
3. Plan for the busy season ahead
Once the busy season arrives, it’s too late to prepare for it. The slow season is a perfect time to ensure that you make the preparations and adjustments needed to hit the ground running when the busy season comes back around.
All employees benefit from training, but finding time to train isn’t easy. During the slow season, you have the time to offer training options that meet your employees’ needs. Newer employees may need some basic onboarding training. Your more seasoned employees likely need more advanced training to improve their skills. Identify the training needed across your workforce, and plan that training before the slow season hits.
The slow season is a good time to dive into your inventory strategy, if it’s relevant to your business. The goal of an effective inventory strategy is to identify the most effective and profitable inventory method for your business. While the slow season is the time to conduct an inventory analysis, you must develop a plan beforehand that will serve as your roadmap to execute this.
Here are some common metrics and processes to consider when reviewing your inventory practices:
- Inventory turns
- Average shipping time
- Cost of inventory
- Volume discounts
- Fill rate
- Shipping accuracy
The list above is a starting point for analysing your inventory practices. Before the slow season arrives, determine which metrics make sense to review when the slow season gives you a window of time to do so.
During the busy season, track the metrics applicable to your inventory strategy to ensure you are ready to execute your review when the low season arrives. An effective inventory strategy will be unique to your business.
4. Learn & learn again
Perhaps the best rule of thumb when preparing for the low season is to remember what you did to prepare for the last low season.
- Did you stick to the plan?
- Did you take advantage of the slow season?
- Did you utilize the slow season to prepare for the busy season?
In answering these questions, you can repeat successful behaviours and identify your opportunities to improve.