Managing Inventory in a Seasonal Business
Trying to manage inventory in a small business is a challenge in itself but when your business is a seasonal business it throws a whole new level of complexity into the plan.
Heavily relying on a certain time frame within a year to make the majority of your sales can prove tough. When you factor in the added difficulty of managing your cash flows and inventory levels throughout the four seasons, it can become overwhelming.
- Starting out with a 12-month plan is crucial in a seasonal business. Even though you may only plan to be open for 8 months of the year you, must financially plan to pay items such as taxes, equipment, rent, depreciation, and anything else that applies to your situation on a 12-month basis.
- Depending on how many years you have been operating a seasonal business you should have a general idea of forecasted demand and sales. Ironically enough, your forecasted sales may rely on the actual weather.
- Always plan ahead when it comes to ordering inventory and supplies for your store. Know the lead-time from your various suppliers and make sure you have everything set up and ready for your peak season.
- Maintaining consistent inventory levels can be one of the most stressful aspects of running a seasonal business. Staying up to date on industry trends and projections while also tracking data from years before will be the best way to predict the future.
- Pay close attention to your top selling items. Top selling could be anything from fan favorites, most essential, or the most profitable. A snowboard shop running out of mask and gloves, right before the peak season, is an exaggerated, but worse case scenario.
- Your offseason is not break time. This is when you will want to be reviewing your numbers and self-evaluating on how you did. Set goals and strive for improvement next year.
- Entrepreneur.com interviewed a seasonal business owner in New Jersey, named Jay Kandle, on the success of his business. When asked about the offseason he said, "We prepare for the coming year like farmers." Jay's business is only open eight months, but he and his team will dedicate an entire year to the company.
If you are a seasonal business owner with inventory problems, BoxFox might be your solution. We connect independent retailers with excess inventory to resellers searching for merchandise just like yours.