During the just-ended electioneering period in Kenya, most businesses (small and large) experienced a slow-down in activity. This is common with every election year, albeit in varying degrees. Some businesses also get affected by holiday seasons while others cash in to rake incomes they hardly get during ordinary seasons. A good example is the public transport and hospitality sectors, while those in school supplies sector get into a slump during holiday seasons.
But it’s the small and medium size enterprises that are most affected by fluctuations in cash flows. Not every small business flourishes all year-round, and this can make the slow weeks and off-seasons a trying time.
I had an interesting chat about this phenomenon with an entrepreneur friend who runs a small tour and travel business. He told me that his business peaks during the tourist high season between July and October. However, it was not so this year due to the election-related activity in the country, so it was not the best time for him. He said it isn’t just the decrease in incoming cash flows that makes it difficult. When working capital is stretched thin, business owners often choose to cut costs. Deciding which operations to compromise can be stressful – and it often results in losing market share, ultimately hurting your business. For him, he had to reduce his fleet from thirteen to nine.
He says, however, with a little imagination and courage, you can get by, even though off-seasons cannot be just as profitable as the peak times. There are strategies that can ease the burden when business slows. He took advantage of the campaign period and leased out the idle cars to some aspirants.
Here are a few ideas on how you can keep your business moving until things pick up again.
Shuffle your range of products and services
One reason most businesses suffer the effects of intermittent low seasons is specializing in products or services that are only useful during certain times of the year. While expanding your product line isn’t an option for every business, it’s a good way to generate extra revenue.
For most businesses, these seasonal fluctuations tend to boil down to the items or service they offer, and changing that could do a lot to beat the doldrums of low sales. For example, the pudding business can offer hot meals during the cold season to make up for the low consumption during the cold days.
Extend your operating season for consistent cash flows
Sometimes it’s easier to lengthen your operating season than your product offerings. You could do this by offering overlapping services so that you do not move out of business when the low season sets in. Instead of specializing in removal services only, you can position yourself as a trusted home-care professional with expertise in home and office organization. By checking in every so often, you can earn cash flows year round.
But that’s not the only way to extend your operating season. Getting ahead of the curve and offering your services a little sooner than the competition may be a better idea. If your business tends to get the most jobs during the dry season, do more aggressive marketing during the wet months. This way, you can lock in clients early, and you won’t need to invest in marketing when you’re busy on the job site. In other words, pursue your customers before the high season and you’re likely to get off to a good start.
Get a grip on your finances
The biggest problem with slow seasons is the lack of incoming money. For that reason, you may want to get in the habit of keeping tight purse strings, particularly on non-essential business functions. Staying on top of your finances does not necessarily mean cutting expenses; it means spending smarter. Downsizing or cutting operations might not be the panacea; the goal is to maintain business continuity by eliminating unnecessary costs.
Above all else, keep on keeping on
Unless you truly cannot operate in the off-season it’s important to stay focused and keep working towards your goals. Stay active and positive. Don’t let yourself get overwhelmed because business is slowing down. You’ll be in much better shape if you keep showing up and work like normal. Turning up for the show is the first part of winning.
Also take advantage of the slow season to review your finances, strategy and ineffective processes, look into options, like new suppliers and partners, and get ahead on your marketing and administrative work. Use the downtime as an opportunity to maintain and grow your business. Perhaps it’s also the best time to take a breather; travel, attend a seminar, network and rejuvenate. Stay positive, active, and focused on the big picture.