By Zac Swarthout, Entrepreneur Fund Business Developer
As the previous owner of two businesses in the Brainerd lakes area, and over 20+ years of hospitality experience preparing for the seasonality of the summer tourism was always one of the largest challenges our businesses would face every year. Whether it be from my time with Ernie’s on Gull Lake or Life Cycle in Brainerd and Nisswa, it became apparent that no matter the business, industry or profession, there is always going to be seasonal impact. Often, the main difference was just how severe that impact may be.
Weather is one of the things you can’t control as a seasonal business owners, if weather isn’t on your side your available cash flow may be dwindling as you prepare for a deluge of tourists. How you manage your business during transition seasons will determine how ready you are for high season success and the steps you take during high season will prepare you for low season.
Below are three strategies for you to consider during a season change.
1. TIMING – When Does Your Busy Season Really Start?
Looking at historical trends can help you determine when your business starts trending up or down. Don’t assume benchmarks such as Memorial and Labor days. Questions to ask yourself leading up to your busy season are:
- Based on documentation and financials from previous years, when does your busy season really start?
- How does other businesses seasonality affect yours?
- Do you have repairs or maintenance that you might consider arranging early due to service availability?
- How can you encourage promotions that bring in service before or after peak season so that you can meet demand during your busy time?
As the owner of a local bicycle shop, we would often encourage individuals with discounts or cash back offers to come prior to the start of the season. This ensured that our promotions aligned with the seasonal demand for things such as service on a bicycle were crucial to our success. We never wanted our promotions to bleed into the peak of our season. We wanted customers to bring in their bikes during the colder months because not only did it bring revenue during a traditionally slow season, but it also allowed us to stay on top of our peak demand periods. These promotions allowed us the ability to better serve our customers without the uncomfortable conversations of a 30+ day wait time to complete their service, which is common in the bicycle industry from March-June.
2. INVENTORY – How to Ramp Up For Busy Season
Managing inventory ramping up to busy season can be one of the biggest challenges for a seasonal business owner. Here are some considerations:
- Focus on your highest demand items with the greatest profit margin and let the other ones go.
- Pare down offerings until demand indicates expanding.
- Research cost-effective substitutions.
- Discuss terms (guaranteed delivery or payment) with vendors or wholesale customers.
As the owner of a bar and restaurant on Gull Lake, managing our cash flow throughout the winter season was a challenge. It really started at the end of the summer. We wanted to maximize our profitability throughout the summer to ensure that the cash flow was sufficient to carry us through that oncoming winter. You think you have finally made it through winter, and then all of the sudden inventory that you know you will need to ramp up for starts to become due for payment. You start to worry about how you are going to increase staffing levels to accommodate our guests. Managing the flow of your guests and the expectations becomes part of your daily duties. Closing parts of your restaurant or hotel due to staffing constraints becomes the norm. My advice for anyone managing those challenges today is to focus on your highest demand items with the greatest profit margin and let the other ones go. Focus on your core!
3. MANAGING EXPECTATIONS + RETAINING STAFF
A large goal for us every spring was not only managing our guests’ expectations, but also protecting our staff. The last thing that we wanted was to burn out our staff before the summer season had really begun. Every business is dealing with staffing shortages and supply chain issues but framing your business decisions in the best light to your customers can make a big difference. Below are a few key recommendations.
- Sold Out vs. Unavailable. ‘We are sold out of’ implies the product is high quality and in high demand, versus simply ‘we’re out of’ which can give the perception of poor preparation and anticipation.
- Schedule appointments or allow reservations in advance so that a guest does not need to experience a long wait to access your services.
- Reserve areas not in use. Reserving seats within a restaurant (essentially blocking them off) is one way of restricting flow and reducing stress on your existing staff.
Protecting the future of your business is crucial during your shoulder seasons, and not chasing revenues/profits at the expense of your guests or your employees’ experiences will benefit your bottom line in the long term. Start making your plan and setting your goals now for how you will succeed year around.
If you are a seasonal business owners facing unique opportunities or challenges to grow your business we can help. Contact us to connect with an EF team member who will partner with you to design a plan to reach your goals.
ABOUT THE AUTHOR – Zac Swarthout is an EF Business Developer based out of Brainerd, MN. He was the owner of Ernie’s on Gull Lake from 2011 – 2015 and Life Cycle in Brainerd and Nisswa from 2015-2020.