How to plan for a sales slump in a seasonal industry
We've asked experts in our in community - women we admire and who have so much knowledge to share - to contribute to blog series titled Ask A Creative Founder.
This month's question is: How do you plan for sales slumps in a seasonal industry?
Seasonal sales slumps can be a real problem for the stationery industry. Read some of the advice given by Creative Founders in our community and see how planning and multiple revenue streams can help your business survive!
Tell us about how you plan for a sales slump in a seasonal industry, Amy: This is my 5th year in business. Every year I see growth and every year I’m able to more accurately identify the slow seasons almost to a number. Late Fall to Christmas is my most profitable time of the year. I’d learned that about the first 4 months of the new year after Christmas, will be my slowest and I’ll need to live off that income from the 4th quarter. Basically, I don’t spend a lot of money the first 4 months. Overall, I’ve learned to save money when you have it. The wholesale industry is a numbers game and CASH is KING.
Tell us about how you plan for a sales slump in a seasonal industry, Brittany: Sales slumps can be hard on our small businesses. I have a good idea of which seasons are busier and slower for me. During high sales months, I put more into my business savings account and build up a surplus to cover my costs in slower months. I also created a cash flow plan to keep a close eye on my business. My cash flow plan helps me see what my cash balances will be months out based off of projections so I can plan ahead for sales slumps with more certainty.
Tell us about how you plan for a sales slump in a seasonal industry, Caroline: I really use the slow times to work on the back end parts of my business. For example, if I know I want to refresh my website or email newsletter design, I will probably save it for a slower time. I also use that time to explore new art techniques and create new designs for collections and releases. It’s a great time to focus on personal things like vacations and taking classes. I just really try to make the most of that time and schedule it out way in advance so I know it’s coming.
Tell us about how you plan for a sales slump in a seasonal industry, Jackie: Wedding invitations slump over the summer and around the winter holidays. The first year after leaving my full-time job I freaked out because I hadn’t really paid attention to slumps before that. I thought my business had failed – but then, like a switch, things picked right back up and I realized it was a rhythm. Now, I use the down time to enjoy the respective seasons and to do back-end foundation work for my business, such as figuring out profits, planning for the year, networking, updating my website, etc.
Tell us about how you plan for a sales slump in a seasonal industry, Kelly: Sales slumps are inevitable so during those times I make it a point to have a plan in place. I truly believe that what you work on now will affect your business 6 months to a year from now so when times are slow I keep my same schedule and work towards my goals for the year. I may work on something in April that isn’t going to happen until December or January, but when I have the time to work on it I buckle down and get it done. Sometimes it’s hard and I just want to watch Netflix, but I know that the work I’m putting in now will be beneficial later.
Tell us about how you plan for a sales slump in a seasonal industry, Kelsey: I plan out my product launches + promotions in increments throughout the year, so everything is nicely spaced and balancing out the busy + slow seasons. This helps keep my revenue more consistent throughout the year, and forces my work-aholic brain to NOT try and do everything all at once :)
Tell us about how you plan for a sales slump in a seasonal industry, Valerie: Creating multiple revenue streams has been helpful to us. When retail is down, typically wholesale is up and vice versa. Licensing revenue also helps boost during seasonal down times.
Tell us about how you plan for a sales slump in a seasonal industry, Kristin: Every business has it's busy season and it's slow season, and it's important to review your numbers to know when those slumps consistently are so that you can plan ahead and also know when they'll be based on past months within your business. It is easy to be hard on yourself and take it personally when sales are slow - but you have to remember that being an entrepreneur comes with ups and downs and that every month won't be consistent. I think it is so important to have a budget for your business so that if you have an amazing month saleswise, that revenue can support your business for the months your sales aren't so great. I draw an income that is the same every month, regardless of how much was generated, which is helpful for the times when sales aren't the best. When you do have the influx of sales, put the additional revenue in an account that you can't necessarily see so that you don't think you have the extra money to spend, especially if you have a hard time sticking to a budget. At the least, keep track of necessary monthly expenses so that you know exactly what your minimums are and build your business budget from there. Once you make a realistic budget, stick to it, reviewing it as you go along to make sure you're running your business within its particular needs instead of within your wants. More than anything, try to plan ahead as much as possible, and be willing to make adjustments as needed to keep your business running smoothly.
Thanks so much for sharing more about how you plan for a sales slump. In the next installment of the Ask a Creative Founder series, we'll talk to our creative founders about hiring help! In the meantime, keep up with all of our creative founders through the links above.