Guide to Coping with Seasonal Sales Swings

Plan for the swing in income

Your best defense is to plan for a variable cash flow. Map out your projected income so you'll know when to expect dips and you can prepare for them.

I recommend: Learn how to perform a cash flow analysis and get help creating cash flow projections with PlanWare's software and easy-to-use templates. For assistance with sales forecasting, check out seminars and software from ForecastPro.

Lower off-season costs

When cash is flowing freely into your business, it's easy to spend it. Don't! Be cautious with your expenditures and remember that income from your busy season will need to be stretched out over the slow seasons as well.

I recommend: Discover ways to save money during the slow seasons.

Budget your time

There is never enough time in a day for a busy entrepreneur, especially during those hectic seasons. Learn to budget your time wisely. Set priorities. During slower times, connect with fellow entrepreneurs. Use this time to analyze your processes and better prepare for those busy times.

I recommend: Keep an activity log during slow and hectic seasons to understand how you use your time on a daily basis. Use your slow time to learn time management techniques that will help you during those hectic seasons.

Spur off-season demand

Find ways to create demand for your products or services during slow periods. Consider offering deep discounts or pre-season sales to generate income.

I recommend: Place coupons offering discounts for immediate purchases or advance orders in well-known coupon mailers, such as Money Mailer or Valpak. Or send coupons online with services, such as mUrgent's e-Coupon Club, which offer custom coupon designs, templates and unlimited email volume.

Diversify

Are there products or services you could offer to complement your current line that could beef up sales during slow times? Consider partnering with other companies, licensing your products to others or targeting new markets with your existing products or services.

I recommend: Find 10 ways to diversify your business at Entrepreneur.com and use JPB.com's online idea evaluator to determine if your diversification ideas will fly.

Anticipate staffing needs

As your sales increase and decrease, your staffing needs will also fluctuate. Hire temp workers to get your through the busy seasons and pare down when sales flatten. Develop a relationship with a local staffing agency, and you may be able to hire some of the same workers season after season. This can trim valuable training time and speed up productivity.

I recommend: Locate a temp agency at the American Staffing Association, where you can search for staffing agencies by location, skills and services offered.

Manage your inventory

An essential key to survival for businesses that deal in seasonal products is efficient inventory management. Forecasting how much inventory you'll need and when you'll need it can ensure a successful season. In addition, you need to have a system for stocking items, tracking products and monitoring sales and returns.

I recommend: To facilitate inventory management, use software, such as NetSuite, QuickBooks or even Microsoft Office, which offers a demo and templates for inventory management.