If your business experiences seasonal variations in demand, that should be no cause for worry. With a bit of organisation and smart management, seasonal businesses can thrive.

How can you manage seasonal variations in demand in your business?

SR&ED Toronto

Seasonalities bring with them a whole host of challenges both in the peak season and in the down season. Here we will examine some of the challenges that seasonal variations in demand can bring and we will offer some potential solutions. Here are Fundsquire’s tips on how to manage the ups and downs of a highly seasonal business and to navigate these waters toward growth.

Understand the demand for your products and services

Your seasonal cycle will likely be similar to other competitors in your industry. Researching your industry can go a long way to helping you understand this. If you are doing something relatively new for which there is not much information available, one approach is to start keeping track of what is going on.

Some businesses experience a significant increase in demand over the summer, while for some business may drop off entirely at that time. A lot of companies may experience reduced demand over the Christmas period. Over time patterns will appear, and these can be used for more effective planning in the future.

Build a flexible workforce

You’ll need more staff at your busy times and fewer the rest of the time. Develop a small core team that will work with you year-round on activities that operate all of the time and bring in seasonal staff to handle the peaks. In your seasonal staff look for people that can become regulars so you don’t have to keep training new people. For example, students that are interested in working with you every summer could be a good bet, or retired people that do not want a permanent long term commitment, but who are happy to help out in peak seasons.

seasonal variations in demand

Market Effectively

Marketing well will make sure you maximise your peak season, but also that you make the most of your down season. It is also important to market at the right times to attract the clientele you seek. For example, for travel, the holiday season itself is summertime, but many people start looking for holidays in January, so marketing at the right time is critical.

Manage Cash Flow

One of the key factors in successfully managing seasonal variations in demand is effectively managing cash flow. According to Aldermore, seasonality is one of the biggest causes of cash flow problems in small businesses. In fact, this company reports that 18% of organisations face a cash flow crisis on a monthly basis, with seasonal issues being a major cause of this problem. While there are a number of good options for small businesses to gain access to credit, 6% choose to use a credit card and 4%, business loans to get them through seasonal challenges.

Get help from an expert finance provider

In this area, Fundsquire can help. We offer several options to help SMEs with seasonal cash flow issues. Popular choices include our research and development tax credit loan and our invoice financing solution. We can also offer commercial loans to businesses that may find it difficult to get credit elsewhere. When businesses have cash flow issues as a result of seasonality these financing options can help tide the gap to get through to the next seasonal rush.