How to prepare for seasonality in your business

Want to know how to prepare for seasonality in your business? Seasonality in business is normal and rather than wishing you had a consistent demand for your services and consistent revenue each month it is much better to face the fact that will be changes n demand and revenue depending on the time of year, and prepare for those seasonal fluctuations. Keep on reading to find out how to prepare for seasonality in your business.

This page may include affiliate links, which means that if you choose to make a purchase, I may earn a commission. This commission comes at no additional cost to you.

When most people think of seasonal businesses they think of the extreme examples. For example, an ice cream van that only operates during summer, a turkey company that sells 90% of its stock over Christmas and seaside towns that are bustling in the summer and deserted in the winter. These are extreme examples that have obvious peak moments of demand. However, the majority of businesses have a degree of seasonality – even online businesses.

I specialise in supporting online services-based businesses and online service providers, and in the online business world there are a lot of discussions about creating consistent months. Business experts will encourage business owners to find ways to generate monthly recurring revenue (MRR) in order to give more predictability and stability to income.

The focus on creating “stable” monthly recurring income is driven by the fact that most business owners are scared of instability. It is hard to have slow months, especially if you haven’t prepared for them. However, seasonal fluctuations in business are normal, and whilst I support looking for ways to create more stable income sources it is important to address the matter head-on. You need to be aware that seasonality is normal, but you can prepare to ensure that you can optimise your business for the seasonality.

HOW TO PREPARE FOR SEASONALITY IN BUSINESS

1. Understand the seasonality of your business

The first thing you need to do is understand the seasonality of your business. The longer your business has been running the easier this will be. You will need to look back over your sales figures. Look at them on a month-by-month basis. The aim is to look for trends. Work out your average monthly income and then identify what months are below average, average and above average. Can you see a seasonal trend in numerous years?

Be aware that looking at just the raw numbers can be misleading. That is why it is important to combine the data with your real-life experience. Use your knowledge of what happened at the time to understand the reason for a high or low month. For example, if you normally have your services available all the time (Evergreen), but did a launch one year so there is a large revenue month then that increase in demand is more a result of what you did with marketing than a natural increase in demand.

Once you’ve identified any peaks or troughs that were down to activities within the business it is time to look at the natural seasonality and try and understand the reasoning behind it.

For example, one of my clients was a life coach for women. A large percentage of her clients were Mums, so in July and August she signed very few new clients. This made sense as at that time of the year the Mums were busy preparing for, and then enjoying, the summer holidays. Their focus was on their children so they didn’t have the extra time to hire a new life coach and work on themselves. However, by mid-September enquiries would start following again as children are back at school and the Mums had time to devote to themselves again.

2. Forecast your finances on an annual basis and monitor cash flow

Once you understand the seasonality of your business you can use that to inform your financial forecasting. Dealing with seasonality in business can be stressful, especially when you are having low months that you hadn’t planned for. That’s why you should be doing your financial forecasting on an annual rolling basis. Take the time to get a good understanding of what your expenditure is and then forecast your income taking into consideration the seasonal fluctuations.

Using this approach will help you be able to spot in advance one of the biggest issues of seasonal fluctuations – cashflow issues! Planning in advance will enable you to see where there might be cash flow issues in the future. You might identify that in a certain month your predicted revenue won’t cover your expenditure. Knowing this in advance will enable you to make decisions such as building up your business reserves in “good” months in order to support the “bad months”.

Note about paying yourself

If you are a solopreneur or small business owner please ensure you are properly including what you pay yourself in these forecasts. All too often business owners will stop paying themselves in the low months. This should be an absolute last resort. Treat yourself like a proper employee and ensure your payment is properly allocated for in the calculations.

MAP OUT THE NEXT 12 MONTHS FOR YOUR BUSINESS (INCLUDING THE FINANCES) IN JUST ONE DAY!

Part 3 of an Annual Planning Strategy Day is about your services, your pricing and your finances. If you aren’t confident with your numbers I’ll help ensure you have mapped out what you expect to happen across the year revenue-wise, and understand what that means in terms of the number of services you need to sell and the marketing you need to generate that level of demand.

I have a tried-and-tested process that I’ve used for years that ensures that in just one day I can help business owners to create a plan for the whole year ahead.

All you have to do is fill in a questionnaire beforehand and then turn up on the day. I’ll then lead you through the whole process and write everything down – making it super easy for you!

For more information and to book a 2024 Strategy Day click here.

3. Maximise the highs

One of the main advantages of planning in advance for the seasonality of your business is to enable you to maximise the high. If you are providing a service, rather than a product, it is easy during a high moment to not be able to meet the demand and then you lose out. Highlighting your highs in advance means you can make decisions to ensure your business is positioned as well as possible to take advantage of the high.

Here are some things you can do:

Stop all non-essential tasks
During your peak you want to be using your time predominately for client delivery and income-generating activities. Things that don’t need to be done in this period should be avoided. For example, large amounts of your marketing can be done in advance. You can batch-create emails, social media posts and long-form content in your low period and have them scheduled to go out during the peak.

Streamline and automate as much as possible
For the tasks you can’t stop doing is there any way that you can streamline or automate them? If you are still manually onboarding clients then you could move to an online solution for example.

Hire extra help
Is it worth getting extra support during your peak period? This could be a VA to free up some of your time, this could be someone who can directly help with elements of the client delivery or it could be help for your personal life (cleaner, cook etc) so you can devote more hours to the business.

The point is by planning in advance for the high you can ensure you are able to meet as much of the demand as possible.

4. Use your quieter periods wisely

The joy of knowing when you will have high and low months is that you can plan accordingly. Traditionally, most of the emphasis has been on maximising for the high time with the aim being when demand is high you are able to serve as much of it as you can.

However, there is another side to consider. What can you do during your low periods? If you know that there will be quieter periods rather than fretting and spending extra time on marketing and sales activities to generate more business, you can be using that time in other ways.

Take a holiday
If the timing works well have a lovely break during the quieter period of business

Complete other admin or operational tasks in the business
During a low period, it would make sense for you to focus on some other aspects of your business. Now is the time to do planning for the future, change your email service provider, update your website, get your bookkeeping up to date etc.

Batch create your marketing
Using your quieter period to batch-create your marketing for the future months will ensure that during the peak months you don’t fall into the classic trap of being too busy to market your business.

Read ‘How to save time by batching your marketing content’ here.

5. Diversify: Create additional services or products.

If the seasonality in your business is too severe that you can’t make the most of the high period in order to balance out the low periods then you’ll need to take a serious look at your offerings and prices. It may be that you are able to increase your prices and that will ensure that across the year the figures will work out. However, that might not be possible or the right solution. It might make more sense to create an additional product or service.

When creating a new product or service because of seasonal fluctuations in your business you need to be strategic about what you decide to create. The purpose is to create a service that will fill a certain time gap within the business. For example, you could be an accountant who has a very busy December and January with last-minute corporation tax and self-assessment returns, but then has a quiet February and March. You could decide to create a 6-week live course where you help business owners prepare for the new financial year. This works perfectly because the new financial year is 1st or 6th of April for many so timing-wise it works for the potential customer, but it also works for you as will ensure you get extra revenue in February when work is usually quieter.

That’s it. You now know how to prepare for seasonality in your business.

Seasonality in business is normal and as long as you prepare for it there is no need to worry about it. In fact, with careful planning you can use the seasonality of your business in a positive way. You can use it to make more money in your business and even take extended holidays with minimal impact on your business.

In the comments, I would love to hear what your biggest takeaway is.

WANT HELP CREATING A PLAN TO ADDRESS THE SEASONAL FLUCTUATIONS IN YOUR BUSINESS?

You can absolutely create a plan by yourself, but you don’t have to!

I love helping solopreneurs and small business owners plan for the future of their business and seasonal fluctuations keep things interesting right?