What the Start of Summer Should Trigger for Your Business
by Kristina McMenamin, on Jun 21, 2017
Depending on your business, summer might be the busiest time of year, the slowest time of year, or just another time of year. Regardless of what’s happening in your business, June, July, and August are the perfect months to think about what could help you manage through the crazy or fill the lull.
If Summer is your business’s busiest time of year
Ex) Materials-heavy businesses like construction
Focus on cash flow
If your business ramps up significantly in the summer, cash flow management can be critical, especially if you run a materials-heavy business like construction. During flush times, you might be surpassing your revenue goals but simultaneously bleeding cash unless you’re actively monitoring it.
For example, say you double the number of projects you take on in July, you will need to purchase twice the amount of expensive construction materials to complete those projects than you did the previous month. But, because you only had half the projects in June, you may not have the cash on hand to purchase all the equipment or materials you need or even if you do, you could run into other related cash problems in the short term.
Ramp up communications with your accountant or CFO
Having an accountant with construction industry experience actively monitoring your cash situation and providing weekly recommendations can be an incredible asset to a business owner during a hectic time. Think about how you might adjust the frequency of touch points with your finance team depending on the season.
For example, one construction client switched from monthly financial updates with their accountant to weekly updates for the summer to help them manage cash flow during the crazy summer project months. Every week, their remote accountant provided them with their projected cash flow for the week to help them make decisions about hiring additional contract labor, buying materials, etc. These additional touch points not only eased the business owners’ concerns, but also provided great insight for how to better structure projects, accounts payable and accounts receivable for the following year.
Ex) Seasonal marketing spend industries like food & beverage and CPG
Other industries ramp up in different ways over the summer: spend, spend, spend! Many food, beverage, and packaged goods businesses leverage the fact that people are out and about eating, drinking, sunbathing, sporting, and celebrating all summer long to get their brands in front of these potential customers.
Wine brands set up booths as music festivals, sports drinks sponsor beach volleyball tournaments, energy drinks partner with the local clubs and bars. Even smaller, growing brands find ways to market locally at the neighborhood arts and crafts fair or the block party. These brands spend a lot of money on marketing—from physical banners and postcards to logo items, product giveaways, discount coupons, and more.
If this sounds like you, what you may not be thinking about is whether you will see a return on your marketing spend right away or in several months. If you get immediate results from your marketing, fantastic! That’s ideal. But it’s not always the case, especially if you’re just getting the word out about your brand. So, as you’re starting to increase spend, it can help to think through when you will start to see the sales from your efforts and how you will manage your cash flow along the way.
If summer is your business’s downtime
Some businesses experience a summer slowdown. Rather than lay back in wait for busier times, evaluate what projects you might be able to tackle in the summer, spend this time investing in brand awareness and marketing campaigns in order to have an even more successful peak season, or think about investing in your own personal growth and development.
Invest in your business
Investing in your business during slow months can take many forms: perhaps you renovate your storefront, set up new equipment, decorate your office space, transition to a new POS system, or ramp up your sales team (training and hiring take serious lead time!).
Obviously, all of these require money, so be thoughtful about what you’ll gain from these projects in the short and long term before you spend. For example, decorating your office space may seem frivolous, but if you are looking to attract young, dynamic talent over the coming year, having a fresh, modern workspace could give you a leg up. You may be eyeing the hottest, latest 3-D printer, but first consider whether a slightly used and much less expensive model may suffice your needs.
One bakery we work with did a thorough evaluation of how an expensive kitchen renovation would help the business’s growth. Because 50% of the bakery’s business occurs between October and January, summer was their time to catch up. The bakery was cash rich from the busy winter season, so they decided to reinvest some of that cash back into the business by remodeling the kitchen during the slowest month. Kitchen capacity was much lower during this time, staff was on vacation, so it was the perfect time to take on the massive renovation. In addition to modernizing the kitchen, the renovation made it easier to bake more and more efficiently during the busy winter, money-making months.
Think about what investments you can make in your seasonal business during the summer that will payout during busier months.
Invest in yourself
Many business owners are too busy in the day-to-day of running their business to spend time on their personal growth and development. By stepping away and focusing on yourself, you may end up coming up with a brilliant new idea or thinking about your business in a new way.
So, take that people management class that’s been on your to-do list for years, start practicing meditation (one of the common practices of successful entrepreneurs), mentor a startup founder, join Toastmasters, or do something completely for yourself like bike riding, cooking, singing, taking guitar or dance lessons, Cross Fit, or any number of other things that promote learning and growth. By investing in yourself, you are investing in your business.