There are times when your small business might have high sales during certain months compared to the rest of the year. These seasonal fluctuations in sales boost your profit and help your business. However, mismanagement of such spikes can result in higher costs and inefficient use of resources. Learning how to manage seasonal shifts provides you with a competitive advantage.
These are some cash flow management and seasonal sales fluctuations best practices that can help your small business.
Plan for Seasonal Shifts
Create a plan for the possible upswing in sales before they start. Analyze previous sales reports and make a forecast. These provide you with insights as to how much inventory you need to buy, possible sales strategies you can implement, and cash flow management best practices that allow you to maximize your resources. Plan for additional staff you might need for the sales spike you’ll experience. Determine their workdays and hours so that you can factor them in when you make a budget.
Balance Inventory
Seasonal changes in your sales mean that you always need to have the right inventory so that you don’t overstock or have too few of the products that are in high demand. Identify which items are likely to sell during a particular season. Purchase enough of these and provide enough lead time so they don’t arrive too early, especially if these are perishable goods. Your sales history from previous months and years allows you to determine the inventory you need to avoid overstocking.
Hire Seasonal Employees
You don’t have to hire full-time staff for seasonal fluctuations. Hire temporary employees whenever the need arises. You might need additional sales staff, customer support, warehouse staff, marketing, and others for the upswing in demand. They don’t need a full shift; however, this depends on your need for extra help. Hiring seasonal employees provides you with a cost-efficient way to manage seasonal fluctuations.
Begin Promotions Early
Prepare for the seasonal fluctuation early. Review your forecasts and sales strategies. Start your promotions through social media, your blog, and website. This informs your target audience that you have an upcoming sale or launching a new product. Your promotions build up excitement around your brand and give you a head start over your competitors.
Diversify Your Products and Services
Boost your small business’ profit by diversifying your sources of income. Offer complementary products or services to the ones that are already in your portfolio. Sell items that your target customers may need during different times of the year outside of your usual seasonal fluctuations. Consider entering a new market for your products. Experiment with your product development, but always keep your current customers satisfied. A new set of products piques the interest of current and new customers and provides you with a new source of income.
Proper cash flow management and handling of seasonal fluctuations include preparation, planning, forecasting, and diversification. All these allow you to meet the surge of customers buying your products during certain times of the year. If you need someone to update your books during these busy times, we at Robookkeeper can assist you. We offer first-rate bookkeeping services for small business owners.
