Peaks and valleys are typical for small businesses, especially in industries that have seasonal demand. If you have a seasonal or cyclical business, you're likely already using strategies like reducing costs during the down cycle. But why not take advantage of the slow season to turn it into business opportunities?
Use these business growth strategies to help inspire new ideas next time you're going through a lull.
1. Identify new opportunities through strategic planning.
A lawn-care business is as seasonal as it gets, especially in the Midwest. But Andy Kurth, president and co-owner of eight Weed Man locations across the country, decided to challenge that idea.
Over the last few years, he turned a “lawn-care business into a business that happens to do lawncare." As a result, the revenue of his 18-year-old, Madison, Wisconsin-based company more than doubled since 2016, and he expects to finish 2019 with $15 million in revenues.
It all started with strategic planning during one off-season.
“We created a 10-year business model showing what we want out of the business," he says.
One of the challenges identified during strategic planning was the cost of seasonal employee churn. Taking advantage of technology, Weed Man added more full-time sales employees, working remotely year-round. Additionally, field technicians can work full-time year-round by shifting their roles to marketing and sales during the off-season.
“We have marketing campaigns that drive a substantial amount of sales for us during the slow window of time, when traditionally people in our industry wouldn't be marketing," Kurth says.
This unorthodox marketing resulted in drastically increased full-time employment. Because the sales are so robust during the slower season, the business no longer depends on cash flow generated during the peak.
Kurth's Weed Man franchise now also offers add-on services, such as ground and pest control.
“Those would not be necessarily done during the down season but they augment our business with highly profitable services," he says.
Kurth cautions other business owners to choose growth strategies that align with their business model.
“We've built a business model now that isn't dependent on the season and sustains employees without needing to have a seasonal business," he says. “Take a look at your business—can you add something that fits into it?"
2. Find out what customers want.
Don't strategize in the dark, however. Use customers who keep coming back year after year to guide your planning decisions, recommends Robert Lee Allen, managing partner for Esperance Series LLC, a private equity fund based in the New York City area.
“Five calls to repeat customers can be more valuable than 50 market surveys with non-customers," Allen says.
When you get a customer on the phone, Allen suggests asking questions that help you “find ways to make life more convenient for them," and to understand the challenges they face in their own businesses.
“Besides the potential of new business opportunities, the goodwill generated—from non-profit-seeking good deeds—can prove invaluable in case your business ever takes a turn for the worse," he says.
3. Thinks outside the (seasonal) box.
Like Kurth, Kyle Welch wanted to challenge the notion of seasonality in his industry. Based in Chicago, Welch opened his first Cold Stone Creamery ice cream shop in 2014. Today, his company, Chicago Scoops, owns more than 40 Cold Stone Creamery locations throughout the country.
Welch used creative business growth strategies for the colder, so-called shoulder seasons, when traffic in the stores slows down.
He learned through research that Americans consume ice cream year-round—but in the colder months, they buy it at the grocery store instead of the ice cream parlor. To get ice cream to consumers easier during the off-season, the company emphasizes off-site sales, such as catering and delivery, as well as ice cream cakes.
Discovering something new and exciting can invigorate your passion for your business and give you more energy to jump in and do things by the time the next peak rolls in.
—Mark Webster, co-founder, Authority Hacker
Chicago Scoops was one of the early adopters of third-party delivery, piloting the idea near the Chicago headquarters to make sure they got the ice cream delivery “science" right.
“Third-party delivery has become such a lifesaver for us," Welch says. “We embraced it early and it was very fruitful for us because our customers got used to ordering Cold Stone via delivery very early on."
To promote off-site sales, the business uses a mix of marketing strategies, including digital marketing, social media and rewards programs. Welch says their guerrilla marketing tactics, however, likely had the biggest impact. These included strategies such as giving out samples to admin assistants planning Christmas office parties.
“You have to be innovative and say, 'How do I do things that aren't my routine?'—and maybe you have to take some risk, but you have to get your product to people during the off-season," he says.
To stay profitable, Welch says it's important to make sure the new strategies help grow revenue and not negatively impacting the overall cash flow. He recommends starting slow—as he did via pilot programs—and having realistic expectations about how much revenue the new growth strategies will generate.
He adds that it takes a lot of planning and saving the cash flow during peak time, as well as leveraging technology, such as an enterprise resource planning (ERP) platform for data and business intelligence.
“There's the stigma of technology replacing people and processes, but my view is that technology gives you the tools to make good decisions," Welch says.
4. Prioritize strategies based on highest value.
When you have many ideas that you'd like to try, how do you choose the best ones? Since the goal is to increase revenue, that's the lens you should use when prioritizing slow-season goals.
“In the grand scheme of things, it's always going to be about increasing the value and profit of the company," says Mark Webster, co-founder of Authority Hacker, a London-based online marketing education company.
Webster says Authority Hacker uses slow periods—typically after New Year's and in summer—to make plans, do some long overdue maintenance, update the product lineup and even take time to rest. When it comes to choosing a specific growth strategy, Webster says one approach is to look at the backlog of ideas, techniques and products they've been wanting to experiment with or update.
“Out of these, we prioritize the ones that will likely provide the most value to the company," Webster says. “This usually brings together a nice bundle of projects for the slow season."
One example is a project during a recent down time when Authority Hacker analysed millions of links, headlines and other metrics and wrote several articles based on conclusions from that research.
“We love data, so we often run tests and analysis of whatever we're interested in," Webster says. “This [article campaign] has proven to be very popular with our audiences and is a great marketing opportunity."
His advice is to not use the slow season to recuperate from the peaks.
“Use it to explore new ideas, interests, projects; maybe try to branch out into something evergreen even," he says. “This is especially true if you're prone to burnouts—discovering something new and exciting can invigorate your passion for your business and give you more energy to jump in and do things by the time the next peak rolls in."
5. Take a systematic approach to planning.
Dmytro Okunyev, founder of AI-powered business collaboration platform Chanty, prefers to use tried-and-true strategies during the down time. At the New York City-based company, marketing goes through a cyclical flow, and Okunyev says that's not the time when they like to experiment.
“When things are going well, I suggest trying different growth tactics like PPC (pay per click), [Google] AdWords, Facebook ads or something else," he says. “But when everything is slow, it's best not to take any risks."
While it's the opposite approach from Kurth's and Welch's, it's worked for Chanty by producing forecastable results.
“Forecastability is essential in the slow season to understand operational costs and therefore have a transparent financial outlook," Okunyev says.
One example is content marketing, which has worked well and has provided good return on investment. During one slower period, Chanty increased the focus on guest posts, link building and outreach—and the result was a 10 percent conversion of visitors into app users via that targeted source.
Whether experimenting or using tried-and-true tactics is best for your business, prepare for the slow season by deciding ahead of time what business growth strategies you want to pursue.
“The slow season is not an unexpected hurricane and you should prepare yourself and set reasonable goals," Okunyev says. “And remember that every slow season is followed by a busy one."
Photo: Getty Images