Advice For Seasonal Businesses


Many businesses – such as those in the farming or tourist sectors and retailers selling Christmas merchandise – do the majority of their trading during a short period each year. The challenges faced by seasonal businesses are unique.

This guide outlines a range of advice for seasonal businesses starting with cashflow planning, which is particularly important as these types of businesses often have to use a short burst of revenue to cover their liabilities for an entire year.

The guide also looks at financing for seasonal businesses, as well as recruitment options, diversification and tax and benefits issues.

How seasonal businesses can manage cashflow

There are many steps a business can take to manage its cashflow more effectively. These apply to businesses of all kinds, but they’re particularly important for seasonal businesses, which are more likely than others to face irregular cashflow patterns.

Plan ahead
By planning ahead, you can ensure you are able to cover any slow periods and avoid having to use quick but costly forms of finance such as credit cards.

A cashflow forecast will highlight times when you’re most likely to face financial pressure. This could simply involve drawing up two lists – for money flowing into and out of the business each month. Download nibusinessinfo’s sample cashflow projection spreadsheet (XLS, 79K).

Get paid more quickly
It pays to be organised about obtaining payment – this means sending out invoices promptly, chasing late payers and considering offering a discount for early payments.

Keep stock levels down
Carrying excess stock ties up money you could be using elsewhere. Keep records of stock levels so you can see patterns of what kind of stock you should build up – and when you need it. Estimate demand by asking your regular customers what their needs will be. Use sales or promotions to shift stock that hasn’t sold well.

Tighten your purchasing policies

You can improve your cashflow by agreeing better terms when buying. This might involve looking for a bulk discount, agreeing a longer than usual payment period or arranging purchases on a sale and return basis.

Put money aside
Resist the temptation to take money out of the business during your peak times – put money aside so you’ll be able to meet your commitments during quiet periods. It’s a good idea to set up a business savings account but do some research before you decide on a finance provider. Once you have signed up, regularly review this relationship and switch providers if a better offer is available. This will help you to get the best rate of interest on your savings.

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