A seasonal business means a smaller profit window

A seasonal business means a smaller profit window



James Albis cannot wait for it to snow — messy, heavy, hard-to-drive-through snow. He probably wants it to snow more than just about anyone but a small child eager to have a day off from school. Without lots of snow, his technology startup, SnoHub, which he has called “the Uber of snowplowing,” could suffer.

Last year, there were two major snowstorms in southern Connecticut, where Albis tested his app, which connects homeowners with snow-filled driveways to a roving band of snowplows. He said the app had been downloaded 1,000 times and the company brought in $25,000.

In the offseason, the company expanded north to Boston and south to Philadelphia by contracting with more snowplow drivers. In a traditional business, this would be a sign that a company was poised for growth. But with SnoHub, all the preparation could be for naught if the snow does not fall.

Entrepreneurs with seasonal businesses are a different breed of business owner. Their days are filled with all of the rush and anxiety of a typical business owner, but the time to make a majority of their revenue — upward of 70 percent — is compressed into a few months.

Fluctuations in seasonal employment — and by extension, seasonal business activity — are well tracked in the labor market, which is why monthly job numbers are seasonally adjusted, removing the peaks and valleys in the economic cycle.

But when those figures are not adjusted, the raw data from the Bureau of Labor Statistics show that businesses increase hiring and business activity two times a year, in the summer with a peak in June and for the holidays, cresting in November. Regardless of how the broader economy is faring, January is always a low point for business activity.

But knowing what the statistics say and managing a business with a small window for profit are two different things. There is little margin for error. Here are some tips from small business owners who depend on the seasons.

Preparation is key

Helen Yarmak, a high-end fur designer, said her selling season stretched from a few weeks before Thanksgiving to Valentine’s Day. To get clients interested in her new designs, she invites them to her studio in Milan during the summer.

But with her business, much of the preparation is based on the availability of top pelts. For example, she said she spent years buying the 80 sable pelts that went into a single coat, which she is selling for 450,000 euros (about $528,000).

“It can take a long time to collect sables,” she said.

Cielo and Philip Masters, mother and son owners of Craftmasters on Nantucket, Massachusetts, a store that has been operating on the island since 1976, spend the winters making their signature belts, knowing they will have no time to make them during the summer. They also work with their artisans to produce perennial favorites, like accessories with scrimshaw on them.

“We prepare for things that are staples, but every year, there are going to be different things that are popular,” Philip Masters said.

Adapt to clients

At risk in missing a trend, of course, is the financial viability of the store. That adaptability can mean accommodating a client outside normal business hours.

Kenneth Mark, a dermatologist, has offices in the Hamptons and Manhattan. But a decade ago, he got his medical license in Colorado and opened a winter office in Aspen. He opened the seasonal business for personal reasons: his love of skiing.

Mark said he spends one week a month in Aspen from December to April. But that means he has to accommodate clients in the New York area — or in Aspen — if they call at the last minute.

“I can’t say, I’ll see you next week,’ if I’m not around,” he said. “It’s not as easy or as glamorous as it sounds. I’m working every single day I’m out there.”

Less than a quarter of his income comes from his Aspen practice, but he said it had helped him to expand his medical practice. Clients from Aspen come to see him in New York in the summer. And being on the slopes has helped market his presence, he said.

“I could be skiing down a run under the gondola and people could be yelling down, ‘Hey Dr. Kenny, I need Botox,’” he said.

Hire year-round staff

Every entrepreneur has stories of things going wrong, but there is less time to fix them in a seasonal business. David Schreiber owns Club Getaway, which has a traditional summer camp for children but has staked its brand on weekend camps for adults.

Each weekend is focused on a group — young professionals, entrepreneurs and investors, and even fans of filmmaker John Waters — and he has developed a loyal following. But he struggles with hiring people who can advance his brand.

“Every year, it’s starting from scratch,” he said. “It’s hard to find staff who are wiling to work six months on, six months off.”

His solution is to have a year-round staff of about a dozen who can continue to sell camp weekends in the offseason and train new employees in the spring.

For some seasonal business owners, starting each season fresh is a source of flexibility, not stress. Kimberly Summers founded Student Concierge Services, essentially an on-call mom for boarding school students in northern Connecticut, when her son started attending one of those schools.

She charges $4,500 for a year for services that include taking a child to see a doctor or to buy a new iPhone. The business gives her summers off, which she wanted to spend with her son.

The offseason for most of these businesses is a time to regroup. But certain businesses get another blip of activity, which helps with any business’s big concern: cash flow.

Masters said he and his mother were getting ready for the Christmas Stroll on Nantucket the first weekend in December. “Anyone who lives on Nantucket during the summer, they all come back for one last hurrah,” he said. “We could make more on that weekend than the entirety of October and November.”

Schreiber said he was planning a ski-themed Club Getaway weekend at Mount Snow, a resort in Vermont, for January. Typically, 100 people go, compared with 300 for a summer weekend.

“It’s not that profitable,” he said. “But it really helps with cash flow.”

And managing cash flow is the key to these businesses living to see another season.


 
 
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