Coping with seasonality

As I sit writing this blog entry, the sun is beating down and the smell of meat slowly roasting on a neighbour’s barbeque wafts in through my office’s open window.  It is a sizzling summer’s day at the end of the School half term break.

This got me thinking about seasonality in business.

Many businesses would immediately class themselves as seasonal in nature.  Take my brother’s business as an example, he is a landscape gardener specialising in the building of patios, decks and driveways.  the nature of his work and the pattern of demand from his customers means that the vast majority of his contracts are completed between the months of March and October.  For my brother’s business the winter months are a fallow period.

Similarly, if you sell package holidays, it is likely that your time of greatest demand will be the school holidays.  If you sell wrapping paper and cards, your busiest period will likely be the run up to Christmas.

The truth is that some businesses are by the nature of their product, highly seasonal and this can be easily identified by analysis of the contracts or levels of sales. So what about other businesses?

In truth all businesses see seasonality in one form or another.  Clothing retailers have to alter their stock to cope with the changing seasons; Restaurants and food retailers regularly use seasonality as a selling point.  Many restaurants will change their menus advocating the use of local ingredients which are ‘in season’.  Supermarket chains will fill their shelves with salads and barbeque sets in the summer months, replacing them with Christmas decorations by October.

So how do you cope with seasonality?

Well, you can just accept the situation and maximise your income during peak times.  This doesn’t mean you do nothing during your down time.  You can use this time to plan and analyse your performance.  For many small businesses this is the ideal time to build your stock of marketing materials by working on your website or your blog.  You can use this time to network and to spread your expertise amongst your industry and to ‘touch base’ with your key customer accounts.

If you don’t; or financially cannot; accept that your business will lie fallow, you can try to flatten out the peaks and troughs of your business cycle.  You may try to extend your season.  Possibly the greatest example of this is the Blackpool Illuminations.  These are switched on in September and run until mid November.  The aim is to draw visitors to the town outside the traditional summer holiday period.

Holiday camps such as Butlin’s and Pontin’s run themed weekends outside traditional holiday periods aimed at fans of certain music genres.  They also run science fiction conventions.  Centre Parcs build large indoor domes filled with activities so that bad weather doesn’t stop visitors booking.

You can look for something else to do.  For example, my brother, who is based in rural Scotland offers customers snow clearing and path gritting during the winter.  He also helps customers repair storm damage to their trees and fences.  He has also looked at offering field drain clearance and hedge repairs to farmers, tasks which usually take place in winter months.

Marketing strategy can help you plan to maximise your income at peak periods, flatten out demand peaks and troughs and to identify other markets which fit your skills and which are attractive to your business.

A really useful tool for the latter task is the Shell directional policy framework.

If your business is seasonal, Philmus Consulting can help you develop plans which best fit your expertise and asset base.