Tips Buying a Seasonal Business
Business owners are sure to experience ups in downs in revenue and sales, but for those business owners who have seasonal businesses, the peaks and valleys can be all the more pronounced.
That’s because the lion’s share of their revenue is concentrated on a specific time period. These businesses provide products or services which are usually consumed or needed during a specific time of the year. While some seasonal companies stay open year-round, they see most of their revenue captured in their prime sales seasons. Others open only during their prime selling time of year, which allows the business owner flexibility during the off-season.
If you are considering the purchase of a seasonal business, keep the following thoughts in mind.
Advantages of Buying a Seasonal Business
As mentioned above, seasonal businesses can offer a business owner some flexibility, as well as an additional source of income. Here a few of the other advantages to this type of business:
The ability to do advanced prep.
One luxury of a seasonal business is the ability to plan out your selling cycle during the off season. Owners have the benefit of more time to develop their budgets, sales processes, and operational procedures before the busy season.
Direct marketing.
Seasonal businesses usually have a target audience on which they concentrate during their peak sales seasons. This is true even during off-season. Get strategic and refine your customer base for a better return on investment. By doing this, a seasonal business can maximize marketing and outreach efforts by customizing the message about their products and services.
Securing seasonal labor.
If you have the ability to build a solid team of temporary workers one season to the next, your hiring will be more efficient, take less time, and cost less. The right group of workers will also enjoy the flexibility of seasonal work and look forward to their positions each season. This can create a positive work environment for your company that encourages good work ethic. In addition, incentives can help motivate your staff to refer friends and colleagues.
Disadvantages of Buying a Seasonal Business
Of course, there are a few negatives to owning and operating a seasonal business—it’s not a traditional business, and it’s restricted to making money by the time of the year. With this, there are many known and unknown factors that can affect a seasonal business.
Weather issues.
Some business may depend significantly on weather conditions, such as those selling agricultural products or based on tourism. If a storm or bad weather hit during your peak season, your projected revenues or business equipment and facilities may be affected negatively. You’ll need to make plans in the off-season for possible unfavorable weather.
Staffing.
Recruiting, hiring, and training temporary workers can really stress the administrative functions if a small business, and if you don’t have those annual employees who habitually return year after year, you may experience a high turn-over. Typically, the transitional nature of seasonal employment means a higher than normal turnover rate is likely. You can try to mitigate this by have clear standards, a positive work environment, and employee incentives prior to hiring.
Startup Capital.
The upfront expenses required to launch a seasonal business can be much more significant to a would-be entrepreneur than a traditional enterprise. There can be permits, licenses, inspections, testing, finding a location, and financing that must all be accomplished in a short period of time, which adds to the pressure of meeting seasonal deadlines and expectations.
Owning and operating a seasonal business requires creativity, diligence, and sound management. Andrew Rogerson is happy to help you buy a seasonal business in or around Sacramento. To find information about this topic and to learn more about other business opportunities, please visit our website Services and choose from the drop down menu the information you’d like.
For more immediate help, please send an email to Andrew or call him at (916) 570-2674.
