Learn something new every day More Info... by email
A seasonal business is a business which is either only open during certain times of the year, or largely dependent on income earned during certain times of the year. Both types of business require some unique management skills, as business owners cannot count on a steady cash flow throughout the year. There are a number of different kinds of seasonal business, and a range of management approaches to such businesses.
In the sense of a business which is only open seasonally, seasonal businesses are often tied to events or holidays. For example, a ski and snowboarding instruction school might only be open during the winter months, because snow is required. Conversely, a resort, campground, or group of vacation cabins might only be open during the summer months, when people want to visit the area. Other examples of this type of seasonal business can include a mail order catalogue which is only open during the winter holidays, a boat rental service which is only open during the summer, or a lawncare service which only runs during the spring and summer.
With this type of seasonal business, the goal is usually to close the books at the end of the season, not carrying any debt over into the next year. A few staffers may be kept on during the closed season to do basic maintenance and handle the handful of customer inquiries which come in; for example, a campground may hire a winter caretaker to live on site and keep an eye on things. Often, the business owner acts as the caretaker for the business, so that he or she doesn't have to pay a staff member during the off season.
With the other type of seasonal business, the business is open year round, but the bulk of the money is made in seasonal bursts. Candy stores, for example, count on Valentine's Day and the winter holidays for a large part of their annual income. Specialty retailers may also rely heavily on the winter holidays for their profit. Businesses in tourist towns often operate on a similar model, making their money during the peak of tourist season and operating with limited hours during the off season.
In the case of a business which operates year round, running a seasonal business can be very challenging. While it may be tempting to take the income from periods of peak profits and reinvest it in the business, this is not always wise, as it may mean that the business runs out of money in the dead season, and is forced to close. Businesses have to ration their money carefully, ensuring that they have enough funds to make it through the period in which they may only see a handful of customers a day, if any.