How do I handle the off seasons?

Monday, January 26th, 2009

Dear Norm,
I have a three-year-old company that produces job fairs, and we’re riding a roller-coaster. Business is great for three or four months in the spring and again for two or three months in the fall. In between, there’s nothing. Our cash flow falls to zero. Meanwhile, we still have to pay our employees. We’ve tried attracting customers by offering off-season discounts—to no avail. The cash crunch gets so bad that we spend most of the good months just recovering. This problem is crippling the business and my emotional stability.

Dear Kent,
First of all, off-season discounts usually don’t work and may undermine the profitable part of your business. Instead you should look for ways to diversify. Are there other types of shows you could produce in the down months? Could you do consulting during those times? You have to be creative, but diversification is generally the best solution to seasonal fluctuations. Meanwhile, deal with the cash-flow problems directly. Can you negotiate to pay your leases during the months when you have more money in the bank? Can you speed up your collections when cash is tight? Also try explaining the problem to your employees and asking for their suggestions. They may well come up with ideas you’d never think of.
Yours truly, Norm

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