The Key to Seasonal Business Success: Increase Revenue & Decrease Costs

By Digium Content Marketing Team

Father And Son Harvesting Vegetables from family greenhouse. In foreground is a wooden box with tomatoes, peppers and cucumbers.

All businesses deal with two types of costs: fixed costs and variable costs. A fixed cost is constant; it’s an operational expense that isn’t influenced by how your business is doing, how much you are selling, or whether or not your doors are open. Examples of fixed costs include building rent, equipment purchases, and salaried employees. On the other hand, a variable cost fluctuates and incurs as sales are made. Examples of variable costs include materials, utilities, and hourly employees. For a seasonal business to be profitable year-round, two things need to happen: costs need to decrease and revenue needs to increase.

 

Increase Revenue: Expand Your Season

Businesses with seasonal offerings can extend their selling season by getting creative with their product and services. For example, a shaved ice company could offer coffee and hot cocoa during the winter months to maintain relationships with customers and increase sales in the off-season. Lawn care businesses could offer tree removal or gutter cleaning services in the fall and winter months, without having to invest in additional tools or materials. By utilizing the skills and materials you already have, you can extend your selling season and increase profits. Another option is to partner up with a complementary business and gain exposure through cross-promotion. Think of a real estate agent sharing an advertisement with an interior decorator, a bed and breakfast and a local activity center offering each others’ guests discounts, or a children’s museum sponsoring an early intervention program. Partnering up can be mutually beneficial in that it increases your exposure to groups that are more likely to be interested in your business- more likely to buy.

Increase Revenue: Market in the Off-Season

Just because your doors shut at the end of the season doesn’t mean your marketing efforts should come to a halt. Stay in touch with customers throughout the year so you are fresh on their mind when your doors open back up. Here are a few ideas:

  • Promote clearance and sale items on your website to clear up old inventory and make room for new products. Everyone loves a “Christmas in July” 50% off sale!
  • Send your product to a popular blogger and ask for an honest review. If it’s a positive one, share it on your social media and add that blogger to your network- personal referrals are the most influential marketing tool
  • Start blogging! Blogging establishes you as a thought leader, and provides useful content for you to share within your network
  • Take the time off to network and discover new communities that could benefit from your products or services
  • Ensure your website and social media profiles are up to date

 

Decrease Costs: Consider Staffing

For many businesses, payroll is one of the largest expenses. Deciding how to staff with a seasonal business can be tricky, as the debate between salaried and hourly employees depends on several factors, including length of season, budget, business needs, and employment laws. While a salaried employee may be an expensive fixed cost for you, it might end up being less expensive when compared to training an entirely new group of employees every season. Compare the costs to see where you can make cuts. Make sure to stay on top of important issues surrounding full-time and temporary employment regulations and developments surrounding the minimum wage in your area.

Decrease Costs: Outsource

Outsourcing is a great way to save on costs, especially for businesses that are only operational for a portion of the year (no need to pay for yearly services if you’re only open for three months!). Practically anything can be outsourced, but as a general rule of thumb, anything outside of your scope of expertise and/or anything that can’t be automated should be outsourced. For example, moving your business phone system to VoIP can save your business up to 70% off your monthly communications costs, and since you only pay for what you use, it’s the perfect solution for seasonal businesses. If your IT guy isn’t knowledgeable in VoIP technology- outsource the responsibility and go with a hosted solution. By handing over responsibility to the experts, you can save money, sleep easier at night, and focus on tasks that are core to your business.

 

Adjusting staffing and outsourcing technologies can significantly reduce business costs as well as the headaches that come along with managing everything by yourself. Cross-promotion and expanding your selling season by differentiating your products and services can increase sales and open the door to several new possibilities for your business. The right balance of revenue-generating and cost-cutting strategies can help a seasonal business achieve year-round success.

 

Learn more about how a hosted VoIP phone system can save your business money in the off-season

 

 

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