Small Business How to Survive – and Thrive – in the Business Slow Season

Crunch the numbers on cash flow

Keeping cash flow on an even keel during the summer slowdown is critical if there’s less revenue coming in.

“Summers can be really tough, because it’s when buyers are distracted with vacations, kids are home from school and disposable income is being used for travel or summer entertainment,” says Claudia Montez, founder of Isabelle Grace Jewelry.

Traffic is usually busiest for her hand-crafted jewelry boutique during the winter holiday season, and summer means doing some reshuffling to stay in the black. For example, Montez adjusts her product pricing and runs summer sales to maximize shoppers’ motivation to buy.

Making sure there’s money coming in is part of managing cash flow in the slow months, but you need to keep an eye on what’s going out, too. Summer is a great time to review your budget and look for ways to trim expenses.

For example, you may be able to cut back on staffing when sales are slower to offset the higher overhead costs that go along with the busier times of the year. Or perhaps spend a little less money on marketing certain aspects of your business.

Josh Zimmelman, founder of New York, NY-based Westwood Tax & Consulting, says to think twice about making any big investments during a summer slump.  “Even though ad campaigns or new equipment might bring in more revenue,” Zimmelman says, you may want to consider delaying spending money on these endeavors until you can cover them.

Scope out new sales opportunities

Karen Wylie, owner of The Blue Ridge Soap Shed, a handmade soap shop in Spruce Pine, NC, saw her summer sales go from a flood to a trickle after road construction kept tourist traffic away from her business for two full seasons. Instead of going into meltdown mode, she and her husband turned an extended lean season into a growth opportunity.

“We used that time to develop our website, so it would provide a greater percentage of our annual income in the future,” Wylie says. She also created new sales avenues by offering workshops for people interested in soap making and entrepreneurship.

Montez uses social media and email marketing to stay connected with her customer base over the summer. “Every week, we offer a special discount to our newsletter subscribers and social media followers,” which she says has helped grow the business’s customer base.

This past summer, she also spent time expanding her company’s wholesale sales distribution channel, something she plans to repeat in future slow seasons. By growing this channel, she says, Montez has been able to make her business “a little less vulnerable to the day to day retail ups and downs from direct purchasers” that characterize the summer months.

If you’re struggling to come up with a way to keep your sales ship from sinking in the lean season, tap your customers or clients for help. Reach out through social media or email to find out what products and services they’re most interested in to generate some new revenue ideas.

Complete a tax check-up

When business is going swimmingly, tax planning may get pushed to the backburner. The lazy days of summer are a good time to get caught up — and even better when you’re doing that lounging by the pool.

“Talk to your accountant about how to lower your taxable income,” Zimmelman says. “Make sure you’re up-to-date on new tax law changes, and that you’re getting all the deductions and credits you’re eligible for.”

Also, schedule in time to revisit your quarterly estimated tax payments, income taxes and payroll taxes to make sure you’re paying enough and making those payments on time. “The IRS is never an attractive creditor,” says Stanley Rose, tax director, Baker Newman Noyes in Portland, ME. “Paying your income taxes late is bad enough, but failing to pay payroll taxes withheld from employees can trigger an even worse penalty.”

Tackle overdue updates

If you’ve got plenty of down time over the summer, use it to your advantage to make overdue improvements.

For example, your point of sale system or accounting system might need an update. Or, you may want to revamp your marketing strategy and give your e-commerce site a facelift. Wylie uses the off-season to schedule repairs and maintenance so having workers on-site isn’t a distraction to customers.

Montez says the summer months are an opportunity to reflect on what is — or isn’t — working for her business. She uses the downtime to design new products, source new materials, test out different marketing initiatives and network with other local business owners.

Find ways to recharge yourself and your staff

You can use a summer slow period to level up your entrepreneurial skills by taking a class, snagging a spot at a seminar or conference, and networking with other likeminded business owners. If the busy season normally leaves you drained, consider recharging your batteries at a meditation or wellness retreat. Montez pencils in a summer getaway to visit family in Portugal so that she’s refreshed and ready to go once sales begin to pick up again.

Don’t forget your employees, either. Use the slow time to schedule a mid-year meeting and work on some team-building to keep morale up. Consider introducing summer Fridays or floating summer holidays as bonus vacation days to give employees time to recharge, too.
 

And, if the previous sales season ended on a high note, an end-of-season bash is the perfect way to celebrate while rewarding employees for all their hard work.

Summer doesn’t have to be a bummer

Summer may be fleeting — but the things you do during the slower months can influence your seasonal success. It all comes down to using your time wisely. Checking in with your cash flow, going over the books and investing time in improving your business — and yourself — can all pay off once the leaves begin to fall and sales pick up.