Blessings for a wonderful Christmas day and remember while the gifts are nice to receive, its the love and sharing that is better.
And in 2013, the opportunities about. Watch for both my new mentoring program and a new course to remove regret and guilt from life and help make decisions more easily.
To a no regret day blessed Christmas Day
Do you and your business suffer from seasonality?
Some Examples of Seasonality
The farmer plants his crops, often borrowing money to buy the seed and fertilizers, hire equipment and workers against a crop that will come in three, four, five or six months later. What do they do if the crops fail or the weather devastates a crop?
Colleges enroll students at one or two times of the year. The students pay upfront and then the college must use that money wisely over the entire year so that they have the money to pay their bills and payroll and maintain the facilities. And what happens if they have unusual expenses or less (or more) enrollment than expected?
Holiday camps, resorts and venues operate 12 months of the year but are often only open for 8 weeks in a year? How do they manage to pay their bills all year round?
Ski fields open when the first real snowfall happens. But what happens when there is no snow or only ice? Yes the snow making machines help but are they the answer to seasonality? And what happens when one year has a six week season and the next an eight week season and the next a four week season and then a twelve week season. What does that do to staffing and other resources?
The less obvious seasonality challenges
Seasonality affects every business in some way. The examples above are obvious examples but what about the following examples:
- Slow down for holidays when business to business trading can cease for up to three months in parts of the world.
- Changes in time, money and resources at budget time.
- Staffing issues when unemployment is low and finding good people is a challenge.
- Finding and outfitting premises when there are few properties available.
- An unexpected disaster or demand that affects the business operation.
- Planning for change and the circumstances of that change are different than expected as happened with the global financial crisis.
Dealing with Seasonality
Since all business experience some seasonality, they need to do the following to manage their seasonality:
- Manage cashflow, always keep a reserve for the unexpected.
- Make decisions quickly to take advantage of opportunities but do a risk management analysis of what happens if it fails.
- Have good insurance cover for business disasters and keep it current and relevant.
- Have a good support team to discuss ideas with, coaches, mentors or masterminds.
- Remember that this too shall pass and if you have to change than change is required. And business is always about responding to change: changing needs, changing conditions, changing products, changing expectations and changing conditions.
- The man who fails to adapt will be out of business quickly
In the comment box, share how seasonality affects you and what you have in place to support the seasonality of your business.
To your future success
When you establish a business you planning must include how you will cope with seasonality, holidays and special events.
As I write this, we enter the Christmas season and depending on where you are in the world, different things happen in the business world.
If you live in North America or Europe, it is winter time and holidays are generally only one week or just the statutory days. If you live in the Southern hemisphere, it is summer and that could mean that most staff have at least two weeks holiday.
The weather affects what foods are available. In winter, you need different clothes, footwear and coverings than in summer and that affects clothing sales and gift giving.
For many businesses, the big holidays are the time for major sales. For other businesses, it is a time to pack your bags and go home because no one is interested in talking to you.
And what happens to promotions at this time of year?
The big players hog the advertising space.
The little players try desperately both on-line and off line to get subscribers and followers by giving gifts and promises of all kinds of things.
SALE and SAVE are the two big words everywhere.
When you think about your business, you need to think of your cashflow.
- When will you make your money?
- When do you have to produce the goods or buy the goods?
- And how will you manage your money between those two times?
It is a balancing act that takes planning.
And then if you have staff there are more issues to be considered.
Staff on holiday get paid even though they are away from work. If you have staff that works over the holidays, many countries legislate special pay rates and conditions for those people.
Many employers use times like Christmas and New Years to gift to staff and major clients. Parties and entertainment add costs and have a number of cautions for employers about the alcohol, abuse, harassment and just plain misconduct that occur at many office functions.
Planning your year MUST include holiday cash flow and staff planning. And think carefully of what you might have to do if what you planned worked too well or failed to work as expected.
In conclusion, I wish my Christian readers the blessings of the season.
I challenge you to think of how the holidays and other special events affect your cashflow. Can you manage better? Or will you lurch from event to event and let abundance and desperation drive your business?
Enjoy your holidays!
Simplifier, Presenter, Mentor