The ebbs and flows of Seasonality

No two seasonal small businesses are the same, but that doesn’t mean there aren’t common tips that can help all of them manage seasonality. Ryan Himmel from Xero shares his below. ~WizeOwl

Despite being called the same thing, no two seasonal small businesses are the same. For a seasonal business to be successful, they have to plan ahead by looking at previous seasons. They also need to ask the right questions. While the questions will be very similar for most seasonal businesses, the answers will vary from one to another.

I recently penned an article for Smart Hustle about how one of our customers, Matt Phare, manages the uncertainty of running a seasonal business.

Matt is the founder of Snow Trainers — a ski and snowboard instructor training institute with locations in New Zealand, the US and Japan. He knows a thing or two about what it’s like to run a business whose success is dependent on the seasons, or more specifically, snow.


Diversifying your sources of revenue can be as easy way for a seasonal business to keep cash flowing in year-round. For Snow Trainers, Matt looked to other regions where he could do just that. After establishing their business’ first location in Coronet Peak, New Zealand, Matt and his business partner travelled to the US and Japan to work the Northern Hemisphere’s winter at the end of New Zealand’s ski season.

This led to the question, “why can’t we open the same business there?” The answer? We can. They went on to open two successful locations in Niseko, Japan and Copper Mountain in Colorado.

Take advantage of your existing knowledge to set up revenue sources in other areas without spending a lot.

Watch for signals

Being aware of what’s happening in and around your business will help you know when to expect expansions and declines. The weather forecast, foot and website traffic all hold insights. At Snow Trainers, they don’t rely solely on the snow forecast.

One of the biggest indicators of demand in each of their regions is how the opposing hemisphere’s snow season went. If Europe had a good snow season then Matt knows to expect lots of inquiries from Europeans about booking in for training in New Zealand.

Knowing when you’ll be busiest will help you plan for staffing, marketing and inventory. If it’s early days and you own a brick-and-mortar location, you may be able to ask other businesses in the area for advice on foot traffic fluctuation.

If you use quality accounting and POS software, you’ll have data to benchmark for resource planning. Know your metrics and you can properly plan for your business.

Know your cash flow

Cash flow is the lifeblood of any business. But for those whose cash flow fluctuates dramatically depending on the time of year, accurate overview of this position is critical.

With a seasonal business you already know your peak time. It’s important to time cash inflows and outflows around when cash is coming into your business.

Cloud accounting software can help you track your business’ cash flow, saving you from tricky spreadsheets and outdated data. Xero automatically calculates your cash flow in real-time. You even have an elegant dashboard where you can see how your business is traveling with a simple glance.

With cash flow tracked automatically, you’ll have more time in your day to focus on the big picture stuff.

Xero’s extensive ecosystem features hundreds of app integrations, including dozens of specialized budgeting and forecasting apps to help you plan ahead and know how much money you need to keep in reserve.

When it comes to financial planning for his business, Matt keeps it pretty simple. His mentality is don’t spend money if you don’t have it. He elaborates further.

“We wait until the end of the ski season to see what sort of profits we’ve made and then allocate out the budget for next year. This way we’re never in the position as a seasonal business where we aren’t prepared,” Matt explains. “Especially when it comes to ski fields, it can be quite fickle.”

“You can be up 100% one year, 50% the following year and have no indicators as to why until it’s too late. We try not to overcommit and always have some money in reserve.”

At times, running a seasonal small business can feel overwhelming and fraught with uncertainty. By being aware of your surroundings, staying on top of your cash flow and looking for ways to expand your offerings, you can run a successful seasonal business.

Want to learn more about how Xero’s products can help you watch & manage your business finance? Talk to Bizwize, certified partners of Xero, today.