The holidays are officially over, and you’ve survived the busiest season of the year. Great work! Now, it’s time to buckle down and figure out how you’re going to handle the after-season. For seasonal small businesses, it can be a real challenge to keep your cash flow consistent when you’re no longer in the thick of the holidays. Rather than worry about how you’re going to manage the off-season, it’s time to buckle down and create a plan for the coming months. There’s no better time to start than right now!
First thing’s first: Get a clipboard (or your favorite inventory management system) and take stock of what you have left over after the holidays have concluded.
If you’ve done a good job at forecasting sales and purchasing the right amount of inventory, you shouldn’t have an enormous amount of stock left over. But even the most thorough forecasting can’t account for random fluctuations in the market, so it’s important to have a detailed inventory report before you start making plans for handling that extra product.
While you can take inventory the old-school way, we recommend investing in a good inventory management system before you get started. Some top-rated choices include Cin7, which has a user-friendly cloud storage system, and NetSuite, which is best for handling high-volume inventory counts.
Offload Extra Product
Now that you have an idea of how much extra product you’re dealing with, it’s time to start getting that inventory out the door. Seasonal merchandise often changes from year to year, so you might find that this year’s products need to sell now instead of holding onto them for next year. Additionally, every pallet of product that you keep for next season takes up valuable resources in terms of storage, so it’s often cheaper and smarter to offload.
Plenty of shoppers look forward to Boxing Day sales, where they can expect holiday merchandise to go on sale at a steep discount. Who doesn’t love stocking up on Christmas baubles and tinsel at 80 percent off? Get on board with the blowout sale trend by marking down your inventory to the lowest prices your margins allow. Even if you end up selling some of it at cost, you still end up saving money overall compared to the cost of storing the items until next season.
Bulk Discount Promotions
Want to sell more? Give your customers a steeper discount for buying multiple items at once. Maybe your seasonal candles are 30 percent off for your January blowout event, but if a customer buys 3 or more, that discount jumps to 40 percent. When the discount scales with the purchase size, customers are incentivized to spend more, which means that much less inventory that you need to worry about for the next few months.
E-Commerce Customer Retargeting
If your company has an online presence, try retargeting customers who looked at your products earlier in the year. This is especially effective when you target customers who put the items in their online shopping cart before abandoning it, indicating that they had a strong interest in the product but didn’t complete the purchasing process for whatever reason. Use a retargeting tool such as Retargeter to email these customers alerting them to the new afterseason blowout prices, and offer a coupon code to seal the deal.
If all else fails, turn to an inventory liquidator to buy out your excess product. This should be your last resort, because liquidation often results in a net loss – the liquidators that buy seasonal products often pay below cost for the items. However, if you’ve already aggressively marketed your after-season sales and sold a majority of your product, it can be worthwhile to liquidate the leftovers instead of storing them.
Switch Gears in the Off-Season
Now that you’ve dealt with your excess inventory, it’s time to start diversifying your income streams for the off-season. The bills don’t stop coming just because it’s January, so be prepared to switch gears. Flexibility helps get your business through the off-season without suffering too many financial bumps.
Introduce New Products
Consider adding new, related products that you can sell in the off-season. If you specialize in holiday-scented goods that you sell from October to December, you might want to add new lines of wax melts and candles in a broader range of scent types, such as ocean spray scented for the summer and florals for the spring. Or if you sell Christmas trees, consider repurposing pre-cut but unsold trees as rustic wood material for crafters and DIYers throughout the year.
Take on Working Capital
Depending on your income streams, you might find that you need to take on a working capital loan to serve as a cash bridge throughout the off-season. Mulligan Funding can help you with that, as well as making sure that you’re borrowing the right amount to keep you on track.
A working capital loan through Mulligan Funding offers benefits such as:
- Flexible capital that you can use for any purpose, from purchase orders to payroll.
- A quick, one-page application process, minimizing the time investment needed to get the process started.
- Fast approvals because we understand that when you need capital, you need it fast.
- Access to funding experts who can help you understand the terms of your loan and repayment.
Prepare for the Next Busy Season
Of course, it’s never too early to start getting ready for next season’s sales, and there’s never a reason to be passive in the off-season. Use this valuable time to plan ahead and make sure that you maximize sales and profits for the next busy season. Preparations are extensive, and can include:
- Forecasting next year’s sales. Use last year’s sales data (or multiple years, if possible… the more data, the better) to predict what next year’s sales are going to look like. This gives you a better idea of what to expect in the upcoming busy season, so you can prepare accordingly.
- Negotiating new deals with suppliers. Long-term relationships with great suppliers give you the flexibility to negotiate when your contract is up for renewal. Check with your suppliers and see if you can negotiate a better deal on bulk inventory, or if you place your inventory orders in advance. Alternately, shop around for new suppliers if you think it’s time for a change.
- Conducting market research. What do your customers want? Now’s the time to survey your audience and figure out what problems they have and how you can solve them. Customers just want to be heard, and conducting market research through surveys (or loyalty data) is the best way to make sure you’re listening.
- Implementing new marketing channels. Marketing is your biggest asset when it comes to preparing for a successful busy season. The constant evolution of marketing means that there are always new channels and outlets for you to be exploring, from PPC advertising to organic marketing, social media marketing, and more. The more you branch out, the bigger your reach!
The holidays may be over, but the work is far from done. Take some time today to start building your plan for the after-season. From inventory management to developing new products and beyond, there’s always work to be done! With the right preparations, you can keep your seasonal small business on track for another successful busy season next year.
Need a cash bridge working capital loan to get you through this year’s off-season? Call Mulligan Funding at 855-326-3564 to discuss your financing options today!
The information shared is intended to be used for informational purposes only and you should independently research and verify.
Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.