Seasonal ups and downs are unavoidable in business. This concerns nearly every business but especially the tourism industry, like hotels, amusement parks, etc., even certain other industries like construction, horticulture and retail, for example Christmas shops. But what can you as business owner do to hedge these downtimes? Fix costs like rent, taxes or maintenances are due despite everything, so you have to consider whether to keep your business open or you can afford to close during the off-season.
To be able to budget exactly, you have to know about your businesses income and expenses and be able to create a monthly cash flow. Estimate your expected monthly income and determine your most profitable month. Calculate your fix costs and find out which costs you can reduce. With this information you will be able to create a report and set your budget, which should be supervised regularly.
Your revenue from the busy season should be your reserve for the low season, to cover costs which may arise and start the next season without debt. Accountant Melbourne CBD is committed to help and guide you at every step of accounts and tax task of your business.
Besides, find possibilities to reduce costs, for example by engaging seasonal employees instead of full-time employees. This way you can save not only salaries but reduce taxes as well. Furthermore reduce your inventory, because a large inventory is associated with higher costs Through your customer’s purchasing patterns you can determine which items should be on hand at which time of year and provide them accordingly. Beside flexible payment terms, a good credit is helpful to overcome downtimes. Negotiate with suppliers and your bank about beneficial terms. You can use Unifac.com to help you with your inventory and shipments.
Most important of all is to use the time between your seasons to analyse how things are going and plan for the next. Also, maintain your equipment and devices to avoid failures during peak seasons. Continue to work on your marketing plan, think about improvements and start the implementation in a timely fashion to remain successful in your coming peak seasons.