Every SME will have peaks and troughs in various areas of the business, particularly if the business is young or part of a quickly changing industry, such as ecommerce or digital marketing. Some businesses however are particularly vulnerable to seasonal fluctuations that have a strong impact on things like incoming cash flow, growth and productivity.
All businesses expect fluctuations, but those who are in a business which is heavily affected by the effects of various seasons and events have to put special effort into ensuring they are prepared and have plans in place to keep the business running smoothly through both quieter and busier times.
If you’re part of an SME that goes through seasonal fluctuations, you’re no doubt already well prepared for the seasonal highs and lows affecting your business. However, it is always good to be checking your ability to deal with these kinds of pressures to ensure you have the best processes in place for your business. Things change, particularly spending habits and the way customers consume which is magnified during seasons and festivities like Christmas.
Keep your SME thriving during seasonal fluctuations with these tips:
Ensure Cash Flow Is In Place Well Ahead Of Time
The combined annual turnover of SME’s in the private sector in 2016 was £1.8 Trillion, nearly 50% of all private sector turnover in 2016 according to statistics from the FSB (Federation of Small Businesses). But that doesn’t necessarily mean that every SME has cashflow when they need it.
There are people to be paid throughout the year, regardless of seasonal demands. However, there will be times when you need to pay out lot more money, possibly in advance. For example; you may have to place a manufacturing order in summer, to have your products made and delivered ready for Christmas orders which could start as early as September.
As a startup the first couple of years of trade are difficult to navigate through these fluctuations, but if you have a few years of trading experience you have what you need to forecast these demands on cash flow. Having provisions in place is a really sensible idea so you’re able to weather whatever comes your way. Consider looking into:
- Budgeting well in advance to ensure the cash is in place to deal with seasonal fluctuations
- Checking out your lending options to ensure you have cash injections in place if you need them. Look into options like equity finance, business angels, venture capitalists, equity crowdfunding, private equity, debt finance, peer-to-peer lending, asset financing, invoice discounting and of course get sound financial advice before committing to any kind of loan.
- Gaining quotes or figures that you need in order to forecast properly. The more accurate your estimates can be, the more accurate your planning can be.
Consider Self Storage For Temporary Growth
A lot of businesses end up getting trapped into lengthy expensive warehouse or office contracts because they need space to operate at a bigger capacity seasonally. Most contracts are for 6 months or more.
Self storage is a really good option for SME’s needing additional space seasonally but without the inflated prices and commitment. Self storage is flexible, secure, can be any size you need and it is probably going to cost you less than a warehouse or office on a daily basis. This BBC News article gives a really good insight into businesses just like you who are enjoying the benefits of self storage as extra space for their business.
Make The Most Of The Opportunity To Make Plenty Of Sales
Make sure you are prepared to do everything you can to maximise on sales opportunities throughout your busiest season. This means ordering products, organising packaging and delivery and customer services enquiries, plus space to handle the orders and of course plenty of marketing. This is likely to be your peak sales period for the year so it makes sense to ensure you’ll be getting the most out of it by planning every aspect of how it will work.
Get Your Marketing On Point Off-Season
People need to know about you all year round, and marketing should happen all year round not just in the run up to your peak sales season. Building up your bank of customers means loyal fans are right there ready for peak season sales.
Essentially it enables you to get a head start on sales, and also gets some cash flow coming in for the rest of the year. Online marketing should be a priority as according to statistics: 93% of online experiences begin with a search on a search engine and nearly 50% of people click on the top three listings that come up. Seek advice from a digital marketing expert if you’re not sure how to increase your search engine rankings because they really do matter when it comes to successful online marketing.
In these quickly changing modern times you have to be diverse to stay ahead of competitors. You cannot just rely on one method of marketing or one way of selling to your customers, especially at peak seasonal periods when other businesses are fighting 3 x as hard to win your customers and who are being 3 x as creative to gain the sales you will miss out on if you don’t do the same thing. You have to think outside of the box in the way you operate and be ready to problem solve and deal with things that crop up that you couldn’t predict.
Top businessman Richard Branson says “Launching a business is essentially a lesson in problem solving” in this article. He’s right, and that never stops no matter how long your business has been going. Modern successful businesses are strong in their core values but fluid in most other aspects of their processes include creativity, problem solving and seasonal planning.
Realistically, you can get through peak seasons and make a lot of profit from them. However, you do have to learn from past mistakes and use past information to help you plan ahead because planning is everything. Planning is the key to seasonal success as an SME and the more you look ahead, the more likelihood there is of you getting through the peaks and troughs not only successfully, but having grown as a business.