Tips for Surviving Your Business’s Slow Season
With the holiday shopping season now coming to an end, we enter a time when many businesses see a drop off in sales. Even if your industry isn’t necessarily “seasonal” by nature, there are surely times when business is slower than normal. These lulls can be harsh for entrepreneurs and could even serve to knock some out of business for good. So how do you hang on when the income slows?
The keys to survival are part creativity, part practicality, and part preparation. Here are a few options to consider for riding out the storm.
Get a loan or line of credit to maintain working capital
Perhaps the biggest challenge that most small business owners face is a lack of working capital. An inability to cover basic operating costs let alone any unexpected expenses is a surefire path to closure. That’s why you’ll likely want to look into securing a small business line of credit or loan before things go too far south.
While there are pros and cons to each, opening a line of credit may make more sense for entrepreneurs who want some security but are currently not in immediate need of funds. Once approved for a small business line of credit, you’ll have access to money when you need it but can also sit unused without costing you interest. On the other hand, if you do have a specific use for your capital in mind, taking out a regular small business loan might make more sense. Either way having a plan and knowing your options for acquiring capital in advance will help you to avoid resorting to far more expensive products like merchant advance loans.
Give deal site promotions a try
One popular tool that many small businesses use to drive traffic even in the slow season is selling on a daily deal site. You’ve likely heard of some of these sites such as LivingSocial or Groupon… and may have also heard some mixed reviews from both customers and owners who have used them. It’s true that there are a number of risks associated with these sites since you will typically have to offer customers at least 50% off your products or services on top of paying the sites an advertising fee. Furthermore there’s no guarantee that deal buyers will return to your business after they’ve taken advantage of their discount or that the people buying them weren’t already customers of yours.
While these are legitimate concerns, there is a lot to like about these sites as well. For one they can be effective in driving traffic and generating revenue even with the discount factored in. Additionally these sites may reach people completely unfamiliar to your business and, if you impress them on their visit, there’s a good chance they will return in the future. If you haven’t done so already it may be time to give one of these sites a try and see for yourself.
Promote your own sales and offers on social media
Of course you don’t need a third party website to offer deals to your customers. In fact your social media accounts may prove more than powerful enough to spread the word about your special offers. You could tie your discount into special events, offer different daily deals for a week or month, or just create a coupon that’s good for the duration of your slow season — you could even experiment with several methods to see what works best for your business.
A word of warning: be thoughtful about the parameters you put on any promotion to ensure that you’ll be able to fulfill demand without going broke. One recent cautionary tale is a Ruth’s Chris Steak House location in Michigan that ended up offering 78% off meals thanks to a 78-0 Wolverine’s football victory (they later backtracked and limited it to 50%, causing some anger among customers). Bottom line: plan deals that are enticing enough to bring people in but be careful about how good of a deal you offer so that this doesn’t happen to you.
Team up with some other local businesses
If your business is struggling during a certain season, chances are that other entrepreneurs in your area are as well. As a result it might be worth exploring a possible partnership that would cross promote your businesses. For example an art studio and a local restaurant might work together to offer date night specials that include dinner and pottery painting. Obviously this one will take some creativity on the part of you and your partners but, when done right, these types of promotions can be a win-win-win for both businesses and their customers.
After the high of the holiday season, it can be painful and panic-inducing to see sales at your small business slowing. Luckily there are some things you can do to either help incentivize customers to return or to at least maintain the capital needed to make it through to the next boon. Just don’t forget to be prepared, be practical, and be creative and your business will be on the way to not only surviving but thriving.