Planning around my business cycles is one key way I have been able to
stay in business for 12 years.
Unfortunately, too many people believe that the amount they make one
month will translate to all months and then they're in trouble when that's
not the case. I have seen it too many times. A business owner will have a
big party and overspend after having a great month then they are short when
a lean month comes along.
Most businesses have an annual cycle and it's imperative to know what
that cycle is for your business.
Determining The Cycle
If you have been in business for a year or more, go back in your records
and chart the amount of business each month. Is it steady? Are some months
much higher while others much lower? Use this information to define your
business cycle.
If you are just starting out, do some informational interviews with other
people in your industry. Ask what the busiest times of the year are and what
the slowest are. Ask what affects people's decisions in buying.
It's important to make the distinction that the business cycle I'm
speaking of in this article is not dictated by the economy but rather by the
buying habits of your clients and the seasonality of your market. Slow
periods created by a down economy require additional measures be taken to
generate business.
Making The Most Of Your Business Cycle
Once you determine your business cycle, brainstorm ways to leverage or
minimize the slow times. Here are some ideas:
- Do side work - For example, I teach classes at a virtual university.
During slow client months I keep my calendar full by teaching more classes
and replace the client cash flow with teaching cash flow. This minimizes the
impact of client's taking vacations and breaks that month.
I would recommend that the side work either relates to your main
business, compliment your main business or feed a passion in you. The point
is to stay engaged, not to start something completely new and different.
- Catch-up. Although it's great to think we get everything done we need
and would like to, the reality is we often don't. Make a list of unfinished
projects such as scanning business cards, calling old contacts, updating
addresses, hiring a new CPA and plan to knock out the list during a slow
month.
- Create. Design new products, set-up partnerships or create a marketing
campaign that will roll out following the slow cycle.
- Plan. It seems easier to take time to think, plan and strategize when
there are fewer day-to-day activities happening.
- Update systems. When fewer people are using the systems you have in
place it's easier to transition to newer, better ones. Some systems to
review: credit card processing, database, newsletter provider and
communications among your team.
- Schedule doctor's appointments. I book all my annual doctor's
appointments during my slow months. Doing so keeps appointments from
conflicting with my client call schedules and gives me more wriggle room
around the appointment so I don't feel rushed to get back to the office.
- Connect. Meeting friends for coffee or taking the time to have lunch
with your spouse can be a luxury during a busy month, so plan some outings
when you can.
- Rejuvenate. Slow months can be the perfect time for you to get away
because fewer clients will miss you. I take two to three weeks off in
December to spend quality time with my family in Colorado. I find that
during this time I can turn off my computer completely and enjoy really
quality downtime to refresh my creative juices.
To offset the weeks without work, I offer clients the opportunity to pay
upfront for the following year's sessions if they need more tax write-offs
in the current year. Typically, two to three clients take advantage of this
offer that helps to keep my December income balanced with other months.
No matter how you choose to use the extra time during slower months, make
sure you do use it efficiently. Time is a commodity for small business
owners.
(c) 2009 Leah Grant Enterprises LLC.
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New Business Mentor Leah Grant publishes Startup Success, a weekly enewsletter. If you're thinking about starting a new business or are in the
early phases of entrepreneurship, get your FR.EE New Business Startup Kit
including the Secrets of Successful Business Owners audio at
http://www.leahgrant.com
