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Paragon Blog

The Pros and Cons of Running a Seasonal Business

Memphis, TN - June 15, 2016

In business, entrepreneurs experience peaks and valleys but for small business owners who operate seasonal businesses those ups and downs intensify. The majority of their revenue is dependent on a specific time period.

Seasonal businesses are all around – from a bed and breakfast to summer camps and ice cream shops. Many will choose to remain open for business throughout the year, oftentimes adjusting to different seasons or customers while others will close during slower months.

If you are looking to start-up a seasonal business, here are some considerations to keep in mind when weathering the ups and downs:

Pros

Seasonal businesses can offer more flexibility, creativity and additional income for business owners. Other upsides to managing a seasonal business include:

  • Advanced Preparation – During the off season, owners have more time to develop budgets, systems, processes and procedures ahead of the busy season; particularly when forecasting your business’ cash flow. Additionally, management and staff have time to rest and recuperate from a hectic schedule. 
  • Direct Marketing – Typically seasonal businesses have a target audience they focus on during their peak seasons, and even during off-season. By narrowing their customer base, a seasonal business can maximize their marketing and outreach by tailoring their products, services and communications. For example, a children’s summer camp can begin marketing during the colder summer months by having pre-registration options available on their website or partnering with local school and recreation centers to build a buzz prior to the summer month.
  • Seasonal Labor – If you are able to build a great team of temporary workers from the previous season or your professional network, hiring will be more streamlined, less time consuming and cost efficient. A positive work environment that encourages good work ethic and incentives can encourage staff to refer friends and colleagues.

Cons

A seasonal business is not a traditional business and is also constrained by the time of the year. There are many factors, known and unknown, that can greatly impact a seasonal business.

  • Weather Conditions – If a storm or natural disaster strikes during peak season, expected revenues or business equipment may be negatively impacted. During the off-season, plan ahead for unfavorable weather.
  • Hiring Staff – Recruiting, hiring and training temporary workers can be taxing on a small business. Moreover, because of the transitional nature of employment, a higher turnover rate is likely. Mitigate these issues by setting standards, procedures and incentives prior to hiring. Click here to learn more about hiring temporary and seasonal workers.
  • Startup Capital – The initial cost and other expenses to launch a seasonal can deter would-be entrepreneur to start. From permits or licenses to securing a location or building, financing a business with a condensed life cycle presents additional up-front financial obligations.

Owning and managing a business takes creativity, diligence and good management. Whether you decide to run a seasonal business, refer to resources through SBA.gov well as connecting with a professional at your local SBA office. 

Source: sba.gov

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