Get the best Credit Tips at Credit Visionary
Seasonal businesses are charged with an uncommon accomplishment: make one period’s revenues enough to sustain the company for an entire year. Some companies have the advantage of being able to close in the off-season, while others continue to be open all year. Some companies have cycles which correspond with actual periods while others are heavily depending on certain seasonal events such as tax due dates, weddings or graduation.
Let us analyze some popular companies that flourish throughout the summertime and the challenges they deal with when the seasons change.
IN PICTURES: 6 Ways To Save Cash This Summer
Ice Cream and Summer Treats
During the summer season, people are always searching for ways to beat the heat. As a result, ice cream shops see a nice bump in business. Rita’s Italian Ice is an ice cream franchise which placed # 121 on Entrepreneur.com’s 2013 Franchise business 500 Positions. Ice cream businesses are commonly risky because winter season months often be slower, for that reason, warm locations or seasonal hours are an essential part of the company model to find the dish for excellence.
Generally, most areas in colder climates are only open the months of March with September, but there are also a number of locations and businesses like Rita’s, which are open year-round. Nevertheless, most of them are found in states where the weather condition is warm all year. According to the business site, Rita’s is the leading Italian Ice franchise in the United States.
Once institution lets out, the rush is on for families to take holidays and for parents to discover ways to occupy their kids. Most amusement park are open between late spring and early fall to accommodate the rush. 6 Flags is the world’s largest amusement park business, with 21 parks across North America and one destination in Dubai.
Some locations have the ability to stay open year-round since of their moderate to warm weather places, however others such as The Great Escape and Splashwater Kingdom in New york city are only open in the summer season. (We break down a few of the U.S.’s most popular amusement parks to find out which one offers the best value.)
In current years, 6 Flags struck hard times, however the business reemerged from Chapter 11 restructuring in Might 2010. As an example of the seasonal nature of the company, in the last 3-month duration of October 2009 with January of 2010, income amounted to $102 million while in July through September of the same year it was $457 million.
Aside from the significant holidays, summer marks the peak period for travel, and thus tourist. Destination-based tourist guide stay in one location and let the travelers visit them. Many offer tours on foot or by means of bus and even boat.
One such boat line, the Maid of the Mist, has been granting vacationers an up-close and personal view of Niagara Falls considering that 1846. For less than $15 per individual, travelers can depart from either side (American or Canadian) of Niagara Falls and ride into the water at the base of the falls. Hing on the weather, the fleet runs from April to October.
As with the aforementioned companies, tourist guide companies must create sufficient cash flows during their time of operation to validate their operations. (If flying to an unique locale is not in the cards this year, have a look at these more affordable holiday alternatives.)
Depending on exactly what area the company is located in, the profits for landscaping companies might dry out up with the shrubbery.
Lawn Physician, the largest ‘automated lawn care franchise’ in the United States, flaunts a typical annual gross earnings margin of 68 % for locations that have been open for at least two years. Although summer is the season frequently connected with yard maintenance, the business offers services year round. Their website offers ‘Grass Care Suggestion By Period’ and their services consist of evaluations and periodic check outs to maintain each customer’s yard, therefore offering prospective for a revenue stream past summertime’s end.
Seasonal Business Challenges
The expenses don’t stop – while it holds true that many costs will lower when the business isn’t operating, some huge responsibilities will remain continuous. For instance, any business with leased space will be accountable for paying the bank on a monthly basis regardless of the season. Other consistent costs which may use consist of insurance, energies and security costs.
For companies with weather condition delicate equipment, arrangements must be made to safeguard valuables. Finding storage or weatherizing equipment and locations for the off-season can also produce brand-new expenses.
Each year the company is accountable for connecting to old workers and/or recruiting brand-new ones. Working with takes time, cash and various other resources considering that prospective workers need to be interviewed, chosen and trained prior to the company opens.
Unlike company that continue to be open all year long, seasonal companies must endure each year on the cash flow produced over the course of a couple of months. While the company is open, it’s essential to maximize profits as they’ll be had to cover any expenses that linger year round.
The Bottom Line
Even though summer season sales could cease after a specific date, the responsibilities of a seasonal business owner will continue throughout the year. Maintaining a watchful eye over cash management, devices and workers all year long can improve the possibilities of a seasonal company making it successfully from one season to the next.