This is how your SME can capitalise on seasonal fluctuations

Updated on 16 August 2016

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This is how your SME can capitalise on seasonal fluctuationsNo matter what line of business you are in there is a very good chance that you are affected by seasonal fluctuations. In many cases businesses struggle to capitalise on and plan for these seasonal ups and downs.

There are many things that cause seasonal trends: holidays, weather, politics, religious celebrations and lots more – how you plan for these is important.

What areas of business are most often affected by seasonality trends?

1. Staff

There is nothing more disconcerting than walking past an empty restaurant and counting the number of waiters on the floor versus the number of patrons. Managing your staff during periods when business is particularly slow or busy is critical because you are ultimately only as good as the team you have and the service that they deliver. The challenge is retaining your best staff during the quieter periods and also hiring additional staff during the hectic busy seasons.

Thought starter: Involve your top performing employees more in the strategy and planning side of the business. Get them to start thinking about ways to capitalise on the slower periods and give them greater or different responsibilities outside of their usual job.

2. Running costs

Imagine a world where your monthly expenses or business running costs could fluctuate based on the amount of income you generated every month? That would definitely make life easier but sadly your rent, water and lights, salaries, and maintenance costs are there to stay and will most likely increase over time. You also need to forecast for those periods when you will need an increase or decrease in supplies, products or services etc. For example, your electricity bill during winter could be 5x more than what it usually is.

Thought starter: Analyse your historic sales data to try identify the different products and services that you will require additional amounts of during the busier seasons. You can also strategise with your core team to see how you could reduce your monthly running costs.

“Sales will go up and down because of the seasonal fluctuations but it is important to recognise and reward your loyal customers”

3. Time 

The saying “time is money” couldn’t be more true in the business world and it is also the one thing you cannot get more of. During the exceptionally busy months it feels like you can hardly keep your head above water and get to everything that you need to each month. In the quieter months however it feels like time comes to a complete stand still.

Thought starter: Take advantage of the slower periods to plan and focus on your business strategy and long-term goals. You can also try assess whether there are any opportunities to diversify your product offering during the slower months or to undertake projects so that your business is ready for the busy season ahead.

4. Sales

Sales will go up and down because of the seasonal fluctuations but it is important to recognise and reward your loyal customers. Remaining visible, relevant and top-of-mind during those quieter months is critical.

Thought starter: Surprise and delight your loyal customers that continue to support you during the slow periods, this may be in the form of a discount or voucher. You might also want to try run some relevant promotions that drive sales when business is quiet.

5. Hardware and infrastructure

During the extremely busy seasons, the wear and tear on your infrastructure and hardware increases significantly. The last thing you need is for your equipment to break when demand is at its highest.

Thought starter: Use the time available during the slower months for maintenance and the upgrading of systems to ensure there is no down-time when things get busy.

At Merchant Capital we understand that seasonality affects nearly every business, that is why we created the unique pay-as-you-trade system so that you can continue focusing on the important things versus worrying about a big loan instalment every month. Our distinct product allows our clients to capitalise on seasonality fluctuations and build it into their business plans, ensuring their success into the future.

About the author: Dov Girnun is the CEO and founder of Merchant Capital. The company is an innovative solution for South African small and medium businesses struggling to access working capital for growth. Merchant Capital offers an alternative to traditional funding option and uses a unique funding and payment model to provide a working capital injection for growing businesses. You can follow them on Twitter @MerchantCap

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