Tips for planning for seasonal dips in income for your business
We at Albert O’Connor & Co Accountants understand that seasonal dips in income can be highly challenging when you’re a small business, especially trying to forecast in Covid times. But there are proactive ways to predict, plan for and overcome these dips in revenue yearly.
The key to dealing with seasonal dips is to try and forecast when they’re most likely to occur and to have measures in place to spread your income and revenue pipeline over the course of the year.
The Albert O’Connor & Co Accountants team have put together a list of ways to plan for this kind of seasonality?
- Forecast your seasonality – it’s vital to know WHEN you’re most likely to experience any seasonal dips. Looking at benchmarking reports for your industry is one way to predict the seasonality in your niche or sector. But you can also use your own accounting data to great effect. Look back through your profit & loss reports and spot where the peaks and troughs have occurred over preceding years.
- Charge a premium in peak time – one straightforward approach is to apply premium pricing for your products/services during the busy season. By increasing your pricing, you boost your overall revenue, giving you more working capital to see you through the leaner months when sales and income are at their lowest.
- Offer additional peak-time services – offering added extras and other additional service lines during peak time is another way to maximise the season. In the months where customers are most engaged, look to upsell these premium services and offer more value. Satisfied clients will be more inclined to pay for added extras, giving you an increased revenue stream from the same number of customers.
- Target other markets – exploring other related markets is another useful tactic. When you’re experiencing downtime, look for other ways to monetise your existing assets, products or services. For example, if you’re a hotel where sales peak in summertime, offer discounted conference space in the winter months to boost revenue.
- Diversify your products/services – if one product/service has a known seasonal dip, look at adding an additional product or service to offset this downtime.
- Have a regional e-commerce strategy – If you’re dependent on a small local market, broadening your marketing and e-commerce strategies can help to attract a wider customer base – and bolster sales. Paid advertising through Google, Facebook, LinkedIn or Twitter can easily target new geographical markets, bringing in new customers and giving your revenue a much-needed uplift during seasonal troughs.
For the latest business/practice news, taxation/financial resources and our Newsletter, visit https://albertoconnorandco.ie/