Seasonality and Surviving the Slow Months

Part B: Understand the Money

Ask a landscaper in July how business is and you will hear that he is buried. Ask him in January and you will hear something very different. The same man, the same trucks, the same crew, and two completely different businesses depending on the month.

We see this constantly with contractors, and it is just as true for restaurants, cleaners, retail shops and consultants. Somewhere in the year there is a stretch when the phone rings all day, and somewhere else there is a stretch when it barely rings at all. Every business has seasons. What matters is whether you knew about yours when you set your prices, hired your people and spent your money.

Seasons you can see and seasons you can’t

Some slow months are predictable, like snow on a roofing schedule or the week after a holiday for a restaurant. Others feel like surprises, but only because nobody wrote the pattern down. Plenty of owners say a slow month “came out of nowhere.” Look back at the previous two years and it usually sits in the same place both times.

The bills do not follow the season. Rent is the same in a slow month. Insurance is the same. A crew you want to keep still needs paying. A slow month is a cash problem as much as a revenue problem, because money goes out on the same schedule while less comes in.

This is the same idea from Your Business Can Be Profitable and Still Run Out of Money, stretched across the calendar. A year can end in profit and still contain three months where you could not make payroll.

Finding your pattern

Pull up your last twelve months of money coming in and money going out. If you have two years, even better. You do not need software for this. A bank statement and a pen will do.

Then ask some honest questions. Which months were strong, and which were thin? Did the thin months come after the strong ones, or before? What did you spend during the good months that you were sorry about during the bad ones? And which expenses could you actually have pushed to a different month?

Here is a simple, clearly made-up example. Say a landscaper nets $4,000 of spare cash in each of seven busy months, and comes up $3,000 short in each of five slow months. The busy months produce $28,000. The slow months consume $15,000. The year works, with $13,000 to spare, but only if the $15,000 is still there when the slow months arrive. If he spends the busy-month cash as it comes in, the same good year feels like a crisis every winter.

The 12-month cash-flow forecast is where this pattern goes on paper so you can see the low point before you get to it.

Ways to soften the slow months

You have a handful of real levers, and many owners only pull one of them.

• Set money aside in the busy months. Treat part of every good month as already spoken for. We will go deeper on this in Building a Cash Reserve.
• Move what you can. Truck maintenance, equipment purchases and big marketing pushes can often be scheduled for when cash is comfortable, not when it is tight.
• Bring in money earlier. Deposits and stage payments turn future work into present cash. See Deposits, Payment Terms and Collecting Money Faster.
• Create something to sell in the off months. A cleaner might offer deep cleans before the spring rush, a contractor might sell winter inspections or smaller indoor jobs, a restaurant might build a lunch or catering offer. These only work if they are real offers customers want, so test one small version first.
• Keep marketing on during the slow months, in proportion. The work you book in the slow season is often the work that fills the first busy weeks. Cutting all marketing to save cash can stretch the slump.

None of these need a bigger business, just an earlier decision.

This week

Write the twelve months down the side of a page. Next to each one, mark it strong, average or slow, based on the last year of your own records. Then circle the two months in which cash was tightest and write down what you spent in the two months before them. That page is the beginning of your plan.

About two to three hours if your bank statements are handy, a little more if your records are scattered. It costs nothing. The Resources page has the 12-Month Cash-Flow Forecast spreadsheet if you want a place to put the pattern once you see it.