“I don’t think you can even out customer demand, not the way you may want it to happen,” says derek walker, owner of brown & browner advertising in Columbia, S.C. “People buy when it is time for them to buy. Trying to change that is a lot more time- and energy-intensive than we think.”
Still, there are some ways you can make business seasonality work for your shop:
Run a few year-over-year and longer-term trend reports and make an appointment with your business banker. “We’ll look at where you have gaps in cash flow and talk about how to plan better for that,” says Lisa Long Jackson, business banking relationship manager with Fifth Third Bank in Raleigh, NC. “We can also discuss strategies for CapEx spending.” Your banker may also be able to make introductions to businesses looking for manufacturing services -- they know a lot of people. Don’t have a relationship with a business banker? “Ask your contact on the teller line to introduce you. The more people you know in the bank, the more comfortable you are with the relationship.”
The biggest challenge is overcoming the mindset that the way things are is the way things have to be in the future,” asserts Dan Markowitz, president, Markovitz Consulting in Corte Madera, CA. He recommends talking to your customers to understand why they buy at the times they do. “It might be simply a function of an accounting preference or a historical accident, and asking them to reconsider might be enough to get smoother order flow. Similarly, talk to your salespeople and understand why they’re bringing in orders in batches, rather than in a smooth flow — does their bonus plan incentivize them to hit targets at the end of the month/quarter/half?” One more tactic: challenge your sales team to find customers whose buying activity occurs during your slow times.
If you can’t even out deal flow, perhaps you can get more business from existing customers so you have more cash on hand during the leaner times. Use slow periods to strategize with the sales team about how to increase each customer’s spend. “It costs more to acquire new customers than it does to grow existing ones,” walker notes.
They say you can find everything online, and it’s true -- even manufacturing projects. Portals like Xometry have thousands of jobs ready for bids, making it easy and smart to even out manufacturing cyclicality. “We want to keep things consistently moving and Xometry is a great tool to fill production capacity gaps,” says Naseem Khan of Prestige Screen Printing, Inc. in Derwood, Md. “There are plenty of jobs that hit the portal -- if you’re slow, you can fill those gaps and keep your plant working.”
"Training does take time and many teams struggle with that,” notes Tony Glocker, CEO and co-founder of SolidProfessor, in San Diego, CA. “But spending time upskilling during slower periods means you'll be even faster and more efficient in your work when things pick up again.” This is also a good time to have employees shadow your most effective team members to learn their good habits and strengthen team mentality.
Since you can predict when equipment is idled, schedule maintenance and upgrades for slow periods. This reduces disruption for you and your customers. This also a good time to review safety and emergency response procedures including drills and town halls.
“A slow time is a great time to develop a plan and start to work it,” walker notes. “An owner can think about the ‘why’ of their business - ‘why anyone should care about what the business has to offer.’ The answer to this is the foundation of any strategy.” Once you have the foundation, brainstorm marketing and outreach around it to form your strategy. Then, he counsels, vet your work. “Is this strategy something we believe in enough to actually do? We write grand strategies or plans because they look good on paper, but we have no intent to actually follow what we have developed. A strategy can only work if owners are committed to actually doing what it says.”
Managing business seasonality is a reality for most shop owners. Use these tips as a starting point -- one of them might spur another great idea for you to try.