50 Days to Christmas…How does the Festive Season affect your business?
Those who operate businesses have the unenviable task of trying to maintain profitability throughout periods in which their business may experience significant slowdowns and indeed shutdowns in some cases. The extent to which seasonality may affect a business depends upon a number of different factors. All businesses have cycles. The length of a cycle can be exceptionally short but for others the prospect of longer periods require strategic planning.
Moneyworks
The amount of working capital that a company must maintain is affected by the festive season. During periods of peak productivity, the amount of working capital that a company maintains will generally be higher to cover increased operating expenses. Depending upon the nature of the industry, some of that working capital may have to be put into reserve for when business and cash flow slows down.
The HoHo Low down on Labour
Seasonality has an effect on the labour supply in businesses that peak during the festive period. In the retail industry, businesses must hire greater numbers of workers during the Christmas period to handle the extra work that comes with holiday sales. The hospitality industry is also challenged by the festive period, not only peaking during this time but facing additional staffing challenges with extended hours. The same is true during peak months of the tourist industry in various locations throughout the country. Seasonality can put considerable stress and strain on managers who must account for any shortages in the labor force.
Time Flies
During periods of peak business activity, the amount of time that a business owner or manager has to plan for future operations will be limited. However, during periods of significant slowdowns, those with seasonal businesses can use those slower periods as an opportunity to plan for future operations.
The Christmas season arrives each year to the same set of responses…….”where has the year gone?” or, “this has snuck up upon us so quickly!” At Jewell Moore our Business Advisors are always there to look ahead. To help you plan seasonal changes as well as provide a financial overview of the looming business landscape ahead and help you to keep your business on track.
