How to Conquer Cash Flow in a Seasonal Business

Are you a seasonal business owner? Are you struggling to manage cash flow in a seasonal business so that you can prosper in those slow months?

cash flow in a seasonal business

I once worked for a company in the small resort town of Queenstown, New Zealand. Queenstown is the adventure capital of New Zealand, and tourists visit to experience adventure sports year round.

The company I worked for which provided a hot pool experience for its visitors was fully booked. But as the skiing season finished, tourists left, demand dropped, revenue plummeted. Other employees and I had fewer shifts. We found ourselves doing maintenance and making improvements to prepare for the next season.

If you’re reading this, the chances are that you’re a seasonal business owner and have experienced something similar:

  • Your business has experienced peaks and valleys in revenue
  • You’ve struggled with how inconsistent cash flow is in a seasonal business
  • Some months business is slow, and in some cases, even non-existent

You’re left wondering:

  • How will I going to survive those slow months?
  • Can I cover my operating costs?
  • Will I be able to grow my business to a place where I’m thriving?

Thankfully, we’ve got you covered. In this post, we share 6 strategies that will help you conquer cash flow in a seasonal business so that you can run a thriving business. You’ll also be happy to know that you can implement many of these strategies right now. These strategies work for all types of seasonal businesses:

  • Business that is weather/season dependent. For example, a snow removal company or landscaping service
  • A business that is tied to tourism or a holiday season
  • Agencies or creative professionals who are at the mercy of client budget cycles
  • Writers facing the reality that magazine issues getting smaller during summer
  • A business that is busy because of a specific happening. For example, a chartered accountant who’s busy at tax time.
  • A business affected by fluctuations in supply

Even if you don’t fall into one of these categories – but have significant variations in sales from one month to the next – the chances are that you have a seasonal business. And, you will benefit from these strategies.

Planning for Cash Flow in a Seasonal Business

For some companies, identifying the slow season is obvious. For others, it’s less obvious. Think of having to deal with fluctuating client budgets.

In either case, it pays to track and predict cash flow year-round so you can better prepare for those lulls. In fact, forecasting cash flow for a seasonal business is easier than a year-round business. Why?

A year-round business deals with the regular fluctuations from one month to the next while a seasonal business often has predictable expenses during those slow periods.
It’s even more predictable if you’re a business that closes down in the off-season altogether because you know what expenses you’ll incur.

Once you understand your cash flow needs, you’ll be better poised to devise strategies to deal with the valleys. Let’s discuss some of those strategies.

1. Work All-Out During the Peak Season

Business will decline during the slow months, but operating costs will remain. These costs can include paying staff (including your own salary), rent, electricity and even contractors. As such you need cash on hand to cover those costs.

You could take out a loan, but that will only mean that you’ll spend the busy season paying it off. A better option is to go all in during the peak season to make as much money as possible from your core offering.

You can do this in many ways. Here are 2:

Market Your Core Offering to Find More Clients

As a freelance writer, my slow period is from December to January. During the year I’m constantly cold emailing to market my services and find new clients.

I ramp up my efforts as I near my slow periods. I tell clients that I’m booking my schedule for the January months and create a sense of urgency: if they want my services, they need to book me now.

I also know that many other writers slow down their marketing efforts as Christmas nears. So, despite business slowing, I’m able to capture a portion of the market.

Generate More Revenue from Existing Clients

Your existing clients are a goldmine because you already have a relationship with them. Use that relationship to upsell your current services. You could, for example, provide a different version of your service at various price points.

Beyond upselling, you can also look to get them on a retainer so that you guarantee a certain amount of income. Such guaranteed income ensures a consistent cash flow.

2. Use FreshBooks and Get Paid Faster

Delays in payments from clients can have a devastating effect on cash flow in a seasonal business. It may not concern you when business is thriving.

But, if your slow period is imminent it can can become a serious concern. After all, expenses remain even when cash isn’t coming in. And I doubt you want to be a position where you’re unable to pay staff, bills, and outstanding debts? It can cause a lot of unnecessary anxiety.

The solution is to speed up payment and make sure that you get all outstanding payments from clients. Here are a few ways you can make sure your invoices get paid on time:

  • Send invoices to clients as soon as you’ve completed the work
  • Show courtesy in your invoices as it increases the percentage of invoices paid on time by 5%
  • Specify the exact number of days within which the client should pay you
  • Send a gentle reminder before the invoice is due. FreshBooks lets you automate this process so you don’t need to worry about crafting delicate emails.
  • Send late payment reminders. FreshBooks allows you to set late payment reminders that run on a schedule.
  • Make it easy for your client to pay by accepting multiple forms of payment such as credit cards. For instance, FreshBooks accepts payments from Visa, Mastercard, and Amex. It even integrates with Stripe.
  • Reward clients for early payment with a discount.
  • Make sure the invoices are correct to avoid back and forth with a client. This means including the correct PO number and addressing it to the right person.

If you find yourself continually chasing late payment, perhaps it’s time you asked for an upfront deposit?

3. Diversify Your Offering to Improve Cash Flow in a Seasonal Business

Some seasonal businesses will close during the off-season while others remain open. If you’re the latter, consider increasing your income in that period by adding extra services beyond your core offering.

However, it’s essential that the service you offer is in line with your brand so that consumers can see the association.

Think about what your customers need in the off-season. For example, if you’re a landscaping business you could offer snow removal services during the winter months.

Or, if you’re a chartered accountant who offers traditional tax services and is only busy during the tax months, you could provide:

4. Keep Your Operating Costs Down

Operating expenses remain even when revenue falls. That’s not to mention that you’ll sometimes incur extra expenses (e.g., maintenance) to prepare for the next season.

But that doesn’t mean that you can’t reduce costs to soften the blow of reduced income. Here are a few ways you can do that:

  • Hire part-time employees who for the busy season
  • Communicate with vendors to negotiate better payment terms
  • Instead of hiring full-time staff, consider hiring contract staff
  • Lease equipment through skip payment leases and step payment leases
  • Make the most of your office space. For example:
    • Negotiate with the owner of your building to increase rent in peak season and reduce it during offseason
    • If you don’t need office space in the off-season, negotiate a shorter lease
    • If you own the offices but don’t need them in the slow period, let another company rent
    • Ask yourself: Do you even need office space? It may be that your entire team can work remotely year round

Skip payment leases let you make payments in peak periods and stop payments in slow times.

Step payment leases require payment throughout the year. You either start with a higher monthly payment that decreases with time or a lower monthly payment that increase with time. Visit Easylease and Equilease to find a solution for your seasonal business.

5. Find Anchor Clients to Carry You Through Your Off-Season

Your anchor clients are those that provide you with a constant stream of guaranteed income over a period.

More importantly, they carry you during those difficult months. The ideal scenario involves having an anchor client that covers all the bills. But how exactly do you find these clients? Here’s a few tips:

Upsell Services to an Existing Client

Your ability to upsell will depend on how good your relationship. Assuming you deliver quality work on time and that you’re reliable, this shouldn’t be hard. This will help you build your income with that client.

Tap into the Network of that Existing Client

This will help you generate more anchor clients. Tell your anchor client that you’re on the lookout for some more opportunities. Ask them if they can recommend you to someone.


Running a seasonal business can be challenging. There are months when revenue will be meager, and in some cases, even nonexistent.

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Cash flow in a seasonal business can become a serious concern. It can leave you wondering how you’re going to survive, cover your costs, and thrive.

Thankfully, you can take control of your cash flow. You just need to use the right strategies. Strategies such as:

  • Planning for those slow months with cash forecasting
  • Going all in during the busy months, so you have money on hand
  • Getting paid faster by using techniques to ensure your invoices get paid on time
  • Diversifying your offering to guarantee extra income
  • Maintaining your costs to soften the blow
  • Finding anchor clients to carry you through those tough months

Are you ready to conquer cash flow in a seasonal business? What strategies do you use?

Nick Darlington

Written by Nick Darlington, Freelance Contributor

Posted on November 3, 2017