With 2013 drawing to a close, many businesses are experiencing the slow-down that typically comes with the season, while others are seeing demand for products and services boosted by the festivities.
In Canada the cold months are working months in most industries, with corporate clients wanting to spend the last of their budget before fiscal year end, retail peaking because of holiday shopping and services being contracted in advance for the new year. In some industries the fluctuations are cyclical, in others they are seasonal.
Whatever the case, if your business regularly sees fluctuating demand, your strategic business plan needs to allow for this.
Marketers work hard all year round, correct? Well, now that it’s the holidays it’s not the time to slow down. Regardless of whether you’re very busy or in the doldrums, you have to keep up a certain level of presence throughout. Search engines don’t take time off, for one thing. So maintaining regular blogging and social media is vital if you want to keep your position, your ranking and your traffic going into January. If you stop posting because few customers are reading your blog, you’ll have even fewer by the time the new year arrives and you’ll have to start all over again building it up. Your brand doesn’t take a holiday either, so maintaining your presence in the public eye is a necessary part of your business plan if you don’t want to be “gone and forgotten” by 2014.
Companies that experience a seasonal spike generally find the demand for their technical resources also spikes. If your operations or profit depends on income during this period, you can’t afford downtime occurring because your infrastructure is overloaded. Whether you’re in retail and have multiple pay points connected to your network, or have an e-commerce operation or online store, if your system is down you’re losing business. Make sure your business plan includes scalable applications and a technology infrastructure that adapts easily to changing conditions. Don’t wait until it crashes under the weight of the best sales you’ve ever had to discover that you overlooked this aspect.
Inventory management is key for businesses that experience peaks during the holiday period, but small businesses that expect a seasonal slowdown often overlook this aspect. There’s nothing to manage if you’re quiet, right? That’s not entirely accurate, and depending on your industry you may want to consider the following issues to optimize your profitability:
- Seasonal deterioration of product lines. There’s no point in having inventory on hand if you aren’t likely to sell it, particularly if there’s a risk of deterioration due to age or temperature.
- Storage costs. It stands to reason that you don’t want to pay for storage area if you don’t need to, but sometimes it’s not quite as clear-cut as that. Storage doesn’t necessarily only refer to space, but can also involve staffing costs, utilities for lighting and temperature control and in the case of large facilities, fuel or power for forklifts and other machinery.
- Expenditure. Unless you operate on a consignment basis, you’re likely to have to pay for inventory in hand. If you’re only going to sell it in a few months’ time, don’t tie up your cash flow by purchasing anything more than you need during a slow period.
All these issues have to be balanced in your business plan with the value of bulk ordering versus “just-in-time” restocking. Accurate forecasting and monitoring of your marketplace will make it possible to maximize your profits while minimizing your slow-season costs.