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How to Survive the Highs & Lows of Seasonality

Seasonality impacts more industries than you probably imagine. From retailers who are hit with the Christmas rush (closely followed by the January slump) to accountants who are swamped at EOFY; the peaks can be exhilarating and the troughs devastating.

Surviving the highs and lows of seasonality is key to maintaining a successful business, but one unexpected dip can derail even the most confident owner. Here are five ways to keep your business afloat during those seasonal downturns.

1. Plan, plan, plan

You can’t always control the specific amount of cash that will be flowing into your business each month. You can reflect on previous years to analyse which months are slower than others. This insight can help you predict future lulls and put in place an appropriate cash-flow forecast to better manage your funds.

“Ask your commercial broker to help you put a plan in place. We have the experience and industry knowledge to find financial solutions that can reduce the stress of seasonality,” says David Crook, Managing Director of Nero Financial. “There are plenty of options to support your cashflow through the ups and downs. Even something as simple as a line of credit can provide fast access to cash when you need it most.”

2. Diversify your offer

You might think you know your business inside out, but your customers get a different perspective – one that you may not be able to see without their input.

If there’s one word that’s been hot on the lips of business owners since the COVID-19 pandemic, it’s ‘pivot’. While COVID brought unexpected disruption, seasonality is more structured, which means you can plan for it and introduce your own ‘pivots’ during these times.

What can you provide to customers that’s relevant to your industry and will generate income when you need it?

3. Reduce your operating costs

Lower income during seasonal troughs is a harsh reality for countless Australian businesses. Evaluate your operating costs prior to a downturn in order to keep the business afloat. Consider negotiating better payment terms with your clients, offering a small discount for fast payment or hire contract employees during busy periods.

4. Work harder during the good times

When money is flowing in thick and fast, it’s easy to sit back, relax and forget about the bad months. Big mistake! It’s exactly during the peaks that you should be working harder. This is the ideal time to take advantage of your business’s success and plan ahead.

5. Get the right level of funding

Many businesses, particularly those in the retail space, simply can’t escape the highs and lows of seasonality – it’s built into the very fabric of their operations. So no matter how much extra marketing you do, overheads you reduce and planning you conduct, you can still find yourself in a financial hole. Seek support from a dedicated business brokerage who understands the commercial lending landscape.

Looking to not just survive the highs and lows of seasonality but thrive? Contact the experts at Nero Financial or call 1300 025 949 to get a tailor-made cash-flow solution.