Whether you run an ice cream stand at the beach or sell office supplies to the government, your Business is likely affected by seasonality.

No matter if your business is 100% seasonal, or mildly impacted by seasonal variances, proactively addressing seasonality will ensure your business is prepared to thrive throughout the year.

There are four categories that a seasonal businesses checklist should include:

• Monitor
• Plan
• Communicate
• Create

Read through the checklist below that details how a proactive approach to these four categories can help your business excel through all seasons.

Monitor & Analyze Your Seasonal Data

1. Track Your Data

To understand seasonal impact on your business, you need data. Tracking data year round allows you to monitor the effect of seasonal change.

Revenue is an obvious starting point to track in your data. As Revenue fluctuates with the seasons, so will your income and cash flow.

The seasonal impact on revenue, income, and cash flow should lead you to make changes to the expense side of your business. Carefully track payroll and other overhead expenses to get a better picture of how seasonality impacts your entire balance sheet.

Effective tools are essential to efficient data tracking. QuickBooks allows you to easily track the revenue and expense side of your business. Closely tracking your data will give you an overall view of how your business performs in both peak seasons and off seasons.

2. Identify Seasonal Trends

With data gathered, look for trends that appear across seasons.

To identify trends, use at least three years of data. This provides a baseline for setting expectations. For instance, tracking revenue over a three year period allows you to anticipate how much growth to expect in the coming years, and how much revenue tends to fall in the off seasons.

In addition to monitoring revenue, examine expenses over the same time period to better anticipate how much expenses will grow year over year. This allows you to gauge expenses compared to revenue in both the peak season and the off season.

Seasonal trends will naturally emerge, and they won’t always be to your benefit. By identifying these trends, you can take proactive measures to mitigate negative seasonal impact and promote seasonal behavior that positively affects your business.

3. Understand Seasonal Effects

Seasonal fluctuations will impact your business uniquely. After tracking data, and identifying seasonal trends, you can begin to understand how seasons affect your business.

You will start to anticipate what’s coming in the season ahead. Some effects are more obvious than others. For instance, golf courses won’t generate revenue when the course is covered in snow.

Other examples might not be so obvious. A ski slope may generate revenue all year round (snow skiing in the winter, mountain biking and hiking the summer), but the workforce might include a higher headcount in the winter than the summer.

Managing a seasonal business starts with data collection and analysis of collected data. Once you have a clear picture of how seasonality impacts your business, move to the next category: planning.

Plan

4. Prepare for the Slow Season

Once you understand seasonal impact on your business, plan for the offseason. You may need to reduce your workforce, limit operating hours, or pare down inventory.

No single equation exists to appropriately manage your business operations through off seasons. The solution must be unique to your business and based on the knowledge you have collected.

During the down season, your business acts entirely differently than it does during peak season. Accordingly, treat it differently. Without peak season revenue, you can’t expect to to spend on peak season expenses. Adjust your business to meet demand, and ensure you have enough reserves in the bank to manage your business when revenue is light.

5. Use Downtime Effectively

In the throws of the busy season, have you ever wished for more time to be proactive? In peak season, it’s tough to find time to build your business through outbound marketing and customer development.

The offseason is a great time to execute plans that you never have time for when business is booming. Proactive offseason activities don’t have to be related to customer development. The offseason can be a great time for training, and generating new business ideas through attending conferences and educational events.

The offseason might be the one opportunity during the year when you can go on vacation. Whatever you choose to do, be intentional about it. Don’t waste your offseason waiting for peak season to come back.

6. Engage Your Customers Before They Arrive

If your business is like many seasonal business, your customers prepare to use your service or buy your product long before peak season.

For instance, if you run a snow ski rental business, your customers are likely making plans in the fall or summer before ski season.

When your customers are in the midst of planning their ski vacation is the ideal time to proactively reach out to them. If you wait until your they come to you, your efforts have likely reached the customers too late.

Communicate with Your Stakeholders

Customers aren’t the only people who need to hear from you regarding your offseason plans. Stakeholders in your business (investors, creditors, employees, contractors, etc.) all have an interest in how your business will address seasonality.

Maintaining an open communication stream with such stakeholders will grow positive relationships. Continued development of your relationship with key stakeholders maybe the difference maker when you are seeking to increase capital investment, or making a large corporate decision.

7. Prepare Investors and Creditors

If your investors and creditors do not understand the seasonality of your business, you need to inform them. Investors should know your business challenges and strategies.

Without a full understanding of your business, investors may pull their investment, or refuse to make additional investments as needed. Clearly communicating seasonal impact on your business’s balance sheet will set appropriate expectations, and allow your investors to weather down seasons as a trusted partner.

Creditors may be willing to adjust your payment schedule if they understand seasonal fluctuations in cash flow and revenue. Banks may offer deferment options that can accomodate down seasons. Suppliers that extend credit to your business may be flexible if you communicate seasonal changes to your income.

Not all creditors are willing to adjust payment schedules according to your seasonal revenue generation. But, there is no chance of creditor flexibility if you don’t communicate your seasonal challenges and needs to your creditors.

8. Inform Employees and Contractors

Employees and contractors need to understand the seasonality of your business. The people who operate your business are it’s heart and soul.

If your people don’t understand your strategy, and buy into it, they will not represent your brand well. The first step to buy-in from your employees and contractors is clearly communicating your business challenges and strategies to combat those challenges.

Consider a beach cabana service. The bulk of the workforce is needed to set up and take down cabanas during the warmer months. During those warm months, you need an effective and dedicated crew. During the offseason, the crew is not needed at all.

If you clearly communicate the seasons of work, the intensity of the work needed during the season, and the compensation awarded for the work; you stand to develop a loyal workforce.

If you fail to communicate, and hire merely to meet demand, don’t expect a loyal workforce. A loyal workforce in a seasonal business is critical to efficiency. When the peak season arrives, you need an experienced crew that can hit the ground running.

Starting the onseason with onboarding and training kills efficiency and will hamper your ability to maximize profits during the time when you should be making the most money.

Be Creative

9. Develop Alternative Income Streams

It’s always peak season for some industry. Consider what industry or niche is in season during your business’ offseason. For example, if you run a garden center, consider winter holiday opportunities to supplement your business during the dormant months.

Alternative income streams are helpful, but make sure supplemental business doesn’t have a net negative impact on your primary operation.

For instance, in the garden center example above, if you are unable to dedicate headcount to adequately prepare for the spring planting season because of the holiday business needs, the alternative income stream becomes a detriment to your business rather than a positive supplement.

10. Offer Events and Offseason Promotions

If an entirely alternative revenue stream is not a possibility for your business, special events and offseason promotions can help mitigate seasonal impact.

Continuing with the garden center example, the bulk of customer purchasing occurs in the spring and early summer. However, clearance sales at end of the summer and into early fall, are a good opportunity to unload excess inventory and boost revenue in an otherwise slow part of the year.

Further, the garden center could provide floral arrangements for offseason events. The garden center may have to source plants and flowers from an alternative supplier, but customers will come to rely on them for all plant needs on a year round basis.

The ups and downs of seasonality shouldn’t create a never ending cycle of feast or famine for your business. With monitoring, planning, communication, and creativity; you can prepare your business to excel through all seasons.