Surviving a Seasonal Business
Tuesday, July 15, 2008; 12:00 AM
Seasonal business owners are often envied as having the ultimate gig: They work hard for the few months that form their peak season, then sail through the rest of the year with their feet up and a wad of cash in hand. Sound like the ultimate dream? Then it's time for a reality check:
Running a seasonal business requires year-round work and tough self-discipline. Behind every successful seasonal business is an entrepreneur who's willing to work twice as hard and twice as smart as the conventional business owner.
"Like any business or project in life, the outer results mirror the inner world of the individual at the helm," says Terry Kyle, author of 400 Latest & Greatest Small Business Ideas. Kyle recommends these four tips for running a tight ship and guiding your seasonal business through the inevitable rough waters ahead.
Be financially disciplinedIt's imperative for seasonal business owners to be strict with their expenses, even when they're raking in the dough during their peak season.
"Seasonal business owners who can't control their spending during the good times of the year will inevitably run into trouble during the down time each year," Kyle says. "The long-term financial maturity required in running a seasonal business is much, much greater than a conventional 9-to-5 employee that can rely on a regular paycheck."
Teevan McManus, 32, learned this lesson the hard way when he started San Diego-based Coronado Surfing Academy in 2003. McManus failed to save enough money for the long winter months and nearly faced financial wipeout before the next surfing season began.
"I definitely didn't plan accordingly the first year," McManus says. "I burned through everything I made in the summer and was living off my business line of credit before the next season came around. I barely made it to the next June."
Since that first year, McManus has learned not only to sock away as much money as he can during his peak season of July and August, but also to manage his money during the long off-season.
Make the most of your peak season"Every dollar counts in a seasonal business, and any entrepreneur who doesn't maximize every angle income-wise during the peak season is asking for financial problems later," Kyle says.
After nearly three decades of designing haunted houses,Steve Kopelman, 51,of HauntedHouse.com has learned a thing or two about maximizing his business's short six-week season. Every year, Kopelman polls his patrons to see the demographics of who's attending and what they thought of the event. He also checks out his competition in person and online by viewing every haunted house website in the country.
"I want to learn what's successful and get prepared for what works and doesn't work for the next year," says Kopelman, who estimates his four haunted houses based in Miami and Phoenix will bring in $2.6 million this year.
The valuable information Kopelman gathers during the peak season is then put to work during his off-season, and that brings Kyle to his third point.