Holidays, vacations, seasonal and business plan

Summer and sunshine are coming soon. The first picnics begin to be organized. But for some entrepreneurs and business leaders, it also means reduced activity. This is the famous phenomenon with the phone, which will no longer ring when the 15th of August is approaching. For others, the activity begins on the contrary (in the tourism sector for example). But how can one for a business creator anticipate this seasonal and transcribe it to his business plan? Why is it important to take into account this seasonal condition?

Anticipating seasonal fluctuations in your business plan is crucial

The main reason for this expectation is the cash flows that determine your ability or not to pay your suppliers, salaries and your various expenses. It is important to monitor the level of your cash flow week after week. Therefore, if you do not take into account seasonal fluctuations in your business plan, it may prove to be harmful later. Example: you are in the gift business. 50% of your revenue happens at Christmas. But you do not take this into account and level your forecast every month. Therefore, you will have too many stocks in June and not have money to keep for Christmas. Your banker will be surprised to see a hole in the cash flow or a drastic drop in it because you have not anticipated this in your business plan.

Failure to anticipate seasonal fluctuations in sales will result in you losing customers due to your inability to deliver them on time. An interesting example: you run a shop that sells a bit of everything to tourists. If you’re able to predict the weather (at least from one week to the next), then you’ll be able to make additional sales of … umbrellas.

It also equates to being surprised when it comes to recruiting. If you open a restaurant and observe a peak in your market research in April, you will have to cope with this peak in the kitchens, but also at the server level. This must be foreseen in the business plan with reasoned decision-making in the form of appropriate employment contracts.

Finally, planning seasonal fluctuations in your business plan means that you give your various partners, and especially your suppliers, the opportunity to prepare internally. It is important to share your business plan with them to help them get organized. They will also be able to share their sector expertise to support you in your forecasts.

Tools and methods for predicting seasonal fluctuations

Market research should allow you to discover seasonal purchases. Examine drinking habits. Monitor your competitors and observe how their revenue is generated. Asking suppliers also helps to know the extent of seasonal fluctuations. It is therefore a must during your market research.

For Internet businesses (but also for so-called classic businesses), Google offers an excellent tool called Google Trends. This tool allows you to know month by month whether keyword searches are more or less important. By taking into account seasonal searches, you will be able to extrapolate it on your revenue, but also better predict your purchases and inventories to meet this demand. So you will be able to anticipate your financing needs month by month. For example, the Google Trend tool shows that in June there are 50% fewer searches on the term “shopping box” than in December.

You also need to plan events that may affect your revenue: the World Cup, Mexico’s year in France, law changes, etc. In short, anticipate in your business plan any major event with which your activity is correlated. Thus, sales of the new generation of televisions increased in 2006 by… 106% in Germany under the influence of the World Cup.

Anticipate seasonal fluctuations and suggest solutions

Once you have anticipated low load periods in your business plan, you also allow yourself to suggest solutions to occupy those periods. You have a restaurant and no one comes in February and March according to your market research? Maybe you should rearrange the space to rent it out at that time or arrange special events? Do you sell gift boxes, but 80% of the activity takes place at Christmas? Offer specific actions for Mother’s Day, Father’s Day, Valentine’s Day, etc. This will smooth out your activity a little more.

Do you have high activity, but only in July and August? How to handle the topic of recruitment? What contracts do you offer your employees? How do you expect recruitment? Do you work part time? Seasonal workers? Many questions need to be asked to be sure not to get into a difficult situation.

Conclusion

Seasonality has a significant impact on the management of many companies. Failure to do so may have unfortunate consequences for the progress of your activity. So try to carefully study the standards of your sector and anticipate variations in activity in your business plan. That being said, seasonal and its periods of bustle or valley are also a great way to test your team’s solidity and involvement.

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