What is a Seasonal Business?

There are two common types of seasonal businesses. The first is a business that only operates during a certain season and then closes until the following year. An example of this would be a snow removal company. 

The second type operates year-round, but they have specific seasons that are far more profitable than other times of the year. An example of this would be a retail store that makes a large percentage of its annual revenue during the Christmas season. 

A season is based on the actual calendar dates or a specific time based on weather, events, or holidays. The prime season is different for the various seasonal industries but is around the same time each year. 

Types of Seasonal Businesses

Many types of seasonal businesses are affected by things like weather, holidays, and institutions. Some companies operate very differently than others while in the same industry. Here are the top types of seasonal businesses:

Lawn Care Company

Lawn care is a task many homeowners dread to complete every weekend in spring, summer, and fall. Many homeowners hire a lawn company to tackle cutting grass, trimming bushes, and other yard maintenance.

Landscaping companies construct, install, and maintain yards, gardens, patios, shrubs, trees, and other outdoor areas. These are typically hired for specific projects, while lawn maintenance companies typically have long-term contracts and work on the same property weekly, bi-weekly, or monthly. 

The biggest factor that stops lawn care and landscaping companies from working is the weather. 

Northern states shut down lawn maintenance during the winter when snow is on the ground. 

Lawn care and landscaping companies are hired by homeowners and all types of property owners to maintain their grounds. 

Snow Removal Company

Snow removal companies have a peak season lasting only a few months in most cases. These companies are in northern states and typically operate from around October until May. Once all the snow has melted, and the weather warms up, their season is over. 

Many lawn care and landscaping companies operate as snow removal companies during the winter months to offset the loss of lawn work. It’s an excellent way for these companies to have work and thrive year-round. 

These companies should start marketing snow removal services to their existing clients and more before their season begins. Both homeowners and businesses need snow removal services. 

Although, businesses use these companies more often as they need them to operate their own business successfully. 

Tax Preparation Companies

Completing and filing taxes is a task many individuals and businesses dread. It can be tedious and confusing, which leads to many hiring a professional to take on the job. 

The prime season for tax prep is from January until April. Although, some require services after prime season and year-round. The majority of revenue generated for a tax preparation company is during the first four months of the year. 

A tax prep company must do a big push of marketing at the beginning of their prime season to gain as many clients as they can handle to have a lucrative business. 

For existing tax prep companies, it’s best to re-market to past clients to ensure they return. 

School and Child Related Companies

There are many seasonal businesses related to schools and children – one is to do with child care. There are after-school child care programs that only operate while school is in session. 

Summer camps only operate while schools are not in session. 

Tutoring companies have prime season while school is in session and during college test prep times but slow down in the summer. Companies that provide equipment and services to schools also primarily operate during the months schools are open. 

Ice Cream Shops

Ice cream shops are seasonal businesses in which some operate differently. Many ice cream shops close down completely In the northern states in the winter until the weather warms up again. The exception is ice cream shops in malls, they remain open year-round. 

Ice cream shops are commonly open year-round in southern states where it doesn’t get as cold, but their revenue may slow during the cold season. Shops that offer other treats tend not to get hit as hard financially in the off-season. 

Retail

Most retail stores stay open for business year-round. Depending on the goods they sell, some bring consistent revenue throughout the year, while others make a large percentage of their revenue during peak seasons. 

Many retail stores run big promotions during the holidays to push for sales. The Christmas season is a peak time for retail stores where they bring an increasing amount of more revenue than other times of the year. 

During these times, the increase in business often leaves the business leaders scrambling to hire enough seasonal staff to handle the workload. There’s also the issue of only needing these employees for a short time, but they still need to be fully trained to complete the work successfully.

Pool Maintenance

Anybody that has a pool at their home will tell you they are a lot of work. Many pool owners turn to a pool maintenance company to take over the pool maintenance. 

Pools need cleaning, chemicals, and repairs frequently, making it a great seasonal business to start. However, pools are only used during certain seasons, especially in the northern states. When fall or winter hits, it’s time to close pools. 

A pool maintenance company will prepare the pool for harsh weather and close it up since it’s typically not used for months. 

In the spring or summer, a pool maintenance company will come out and open the pool back up and prepare it for use again. Monthly contracts are common with pool maintenance companies which is an excellent way to retain customers. 

Holiday Festivities

Holidays are a time that brings in additional revenue to many seasonal businesses. For example, a company that does holiday lighting would only operate from November through January. 

Companies like pumpkin or Christmas tree farms operate all year to grow and harvest their crops but bring in the revenue from the products mostly in October, November, and December. 

Businesses like caterers, venue halls, party planners, party supply rentals, and photographers run their business year-round, but their revenue increases quite a bit during the holiday season. 

Companies that solely operate during the holidays must be hyper-focused on generating the most revenue to bring in enough money to survive annually. 

These companies must strategize and implement effective marketing strategies well before their season begins. 

Pros and Cons of Running a Seasonal Business

There are several benefits and disadvantages to owning a seasonal business. Let's take a look at both. 

Pros

Free Time

The biggest benefit to owning a seasonal business is the free time it provides. The additional free time allows business owners to improve their processes and systems, and budget. The extra focus time helps seasonal business owners take the necessary steps to improve their bottom line. 

Some seasonal business owners operate another business during their off-seasons to bring in additional income. Other owners use their free time to relax and do things they enjoy to avoid getting burned out. 

Target Marketing

Many seasonal businesses have an exact target audience they focus their marketing efforts on during peak season. These target markets are based on where the majority of their revenue came from in previous years. 

Cons

Developing a Winning Team

Putting together a team to help operate a seasonal business is sometimes challenging as many job seekers look for permanent work. These positions are commonly filled with college students, semi-retired, or individuals looking for a second job. 

In addition to labor workers, seasonal businesses also need office help to handle customer service, data entry, and order entry. 

Since excellent customer service is critical to the success of an organization, it can be a difficult task to find experienced agents to satisfy the needs of customers on a seasonal basis. 

The recruiting, onboarding and training process for new hires takes time and money, challenging for some seasonal business owners. 

Once a team of outstanding professionals is formed, the business should be ready to hit the ground running once their season starts. 

Weather

The weather plays a huge role in a seasonal business. For example, a snow plowing company only operates when there’s snow on the ground. On the other hand, when snow is on the ground, a lawn care company business comes to a screeching halt. 

These companies also stop working in rainy weather even though it’s their peak season. A rainy summer puts a big damper on the cash flow for these outdoor seasonal companies. 

Capital

A seasonal business that doesn’t operate year-round has the challenge of the start-up capital needed to get going every year. These business owners need to be extremely detailed with their budget to afford their financial obligations to start up their business each season. 

How to Run a Successful Seasonal Business?

Owning a successful seasonal business is no walk in the park. It takes dedication, discipline, and strategic planning. 

With the right strategy and effort, operating a seasonal business is proven to be lucrative. Here are some tips and the best practices for running a successful seasonal business:

Prepare and Plan Ahead

Since a seasonal business is seasonal, you want to get all your planning and preparation done ahead of time to focus on the core business functions during the process.

Preparing includes ensuring any tools or equipment you may need is in good working order and that you have all the supplies you need to operate your business. 

If your business uses a lot of equipment, really weigh your options of buying or leasing what you need. If there’s some equipment you only use sparingly, you may want to lease it rather than buy. 

When preparing, take a good look at all of your processes and procedures in the field and your back office duties. What steps are needed to ensure a smooth transaction with every client? You don’t want to scramble at the last minute to provide excellent service with ease. 

Cash flow

Running a successful seasonal business is exciting. You have a small window of time to work, and the money rolls in fast. Seasonal businesses can be very lucrative when run correctly. 

One of the biggest challenges seasonal business owners run into is struggling to manage cash flow. 

Cash flow management is essential for any business, but it’s critical for a seasonal business. Bringing in a large amount of revenue in a short time leaves some seasonal business owners in a spending frenzy and run out of money before their next season. 

When planning finances, you will want to project how much revenue will come in and go out. You’ll want to look at expenditures year-round, not just during your peak season. 

You may not have an exact number of the outflow of cash needed since you don’t know how much inflow you will bring in, but you could estimate. If you have been in business for previous seasons, you can anticipate your cash outflow and inflow based on prior years.  

You will also want to understand how much business you need to bring in to thrive. In this case, you may want to consider a small business loan to get started.

Build a Winning Team

The truth is, the team you create for your seasonal business can be the difference between a successful year. Employees are the backbone of an organization. They communicate with your customers and deliver services on behalf of your company. 

Finding great employees for a seasonal business can be a difficult task. It’s vital to start early with your hunt. Be open and transparent about how your season position works. 

But, only hire individuals you know will be a good fit and add to the success of your business. One bad seed in the group can do a lot of damage to the company’s morale and success. 

Add A New Strategy

You know people are always looking for the new and hottest thing. You want to think about that while you are strategizing a business plan each year. Is there a new product or service you could add? A new feature? 

You want this new addition to fit with your current business model, so you don’t have to invest a great deal of time or money into it, at least initially. Testing new products and services with your existing customers will give you an idea of the demand for them. 

Once the new product or service is gaining popularity and your clients are satisfied with it, it’s safe to do a bigger push. These unique products or services will separate your business from any competition. 

To Sum it Up

Owning a seasonal business has its challenges, but the payoff is rewarding. Some seasonal companies only operate during certain times, whereas others are open year-round but make a significant annual revenue during specific times. The most successful seasonal businesses learn to overcome the challenges and manage their cash flow correctly to thrive year-round. 

Do you need help with your seasonal business? Contact Awesome CX today, and we’ll be the helping hands you need to succeed.

Sources:

The Costs Of Training New Employees, Including Hidden Expenses | Forbes

Seasonal Retailers Face Many Hurdles | The US Small Business Administration

Loans | The Small Business Administration