ALMOST EVERY INDUSTRY has some kind of seasonality. When I talk to someone about their business, it’s usually fascinating to dig into the cycles which are natural for them.
This came to mind today because I had a chance to talk with a lady who’s starting up a great business bringing products from South America and Asia here to Colorado. I suspect that many of these products will be used as gifts, which means that she’ll be connected to the gift-giving occasions around Christmas, Mother’s Day, and so on. Birthdays happen year round, of course, so that may help even out the revenue stream a little.
Her primary selling methods will be on her website and via markets and similar events – which means lots of activity during the warmer months.
We can see, then, that there will be big “selling seasons” during the summer and before Christmas. Of course, this means that the first third of the year will probably be significantly less income.
Because this business is based on ever-changing inventory, she also has to worry about acquiring her goods. That’ll be happening a few months before the products are sold, so it’ll be a great activity to focus on during the winter inactivity.
You can see what will happen to cash flow. She’ll need to have stockpiled some money from her busy Christmas season so she can afford to pay her suppliers before things ramp up again.
Now here’s an interesting question: What’s likely to be her mental and spiritual state over the course of the year? Quite likely, this summer she’ll be feeling great about the business because she’ll have a ton of customer interaction, she’ll be running around from event to event, and sales will be flowing. If her inventory runs low, well, at least it’s because sales are good.
Moving into autumn, she may be able to relax just a little, but it’ll all be in preparation for holiday sales. She’ll have a whole bunch of anticipation, and especially in this first year, probably some anxiety around how big the season will be for her. It’ll be important to stay firmly grounded in her vision and values.
Right after Christmas, sales are likely to plummet. So she’ll have to be prepared for this, lest she lose heart and faith in what she’s doing. This is on top of what else is going on in society, in nature, and in her family life. She might become discouraged. It’ll be critical to again ground herself in what she’s learned and accomplished in the past year, perhaps doing an evaluation of her business plan and processes. She’ll probably have time to spend on improving her processes and tools before launching into the big “buying season” activities.
It’s an interesting thought exercise, right? Here’s the questions you can ask yourself regarding your own business seasonality. For each month or two:
- What’s likely to be happening to your revenue stream?
- What’s happening with your inventory and supply?
- What’s going on with your employees and contractors?
- What’s happening in your personal and spiritual life?
- What’s going on with society and nature?
Out of this, you’ll gain some insights for how to manage through boom and bust, how to manage your employees, and even how to set specific business goals.
What a great exercise to do with your business coach!