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Managing a seasonal business, Part 2: How to extend your season

This article is Part 2 of a four-part series on managing seasonal businesses.

For most seasonal business owners, the dream is to make the business less seasonal (unless, of course, you’re a ski equipment manufacturer who loves to spend all summer surfing instead of working in your business). Instead of making all your income in a few short months, then budgeting it carefully over the year, why not make more money all year long?

Here are three ways you can extend your season.

1. Expand your product line

Once your seasonal business is thriving in its niche, consider adding new products. To determine the most promising products, keep your ears open to what your existing customers are requesting. Do they regularly ask for a related product you don’t make? Do they want your product in different materials, colors or sizes?

For example, if your business currently makes wrought iron patio furniture, perhaps you could make wrought iron window bars, gates or railings, or expand from patio furniture into indoor furniture or office furnishings?

Also, assess your existing equipment and supplier relationships. How else can your manufacturing equipment be used? Does your supplier sell different materials you could use for a new product line?

In most cases, your new products relate to your original product line in some way — maybe it’s a complementary item or targets the same customer base. While it is possible to expand into a completely new arena, it also means additional costs and time to develop new distribution channels, sales strategies, and marketing materials.

In the example above, indoor furniture could be marketed to the existing customer base, and probably use the same distribution channels. Wrought iron window bars, however, would be marketed to a different audience requiring new channels.

2. Expand your market geographically

Since seasonal businesses are typically affected by weather, expanding into different regions of the country can help extend your season. For instance, a roofing materials manufacturer that sells to customers in the rainy Pacific Northwest can extend its season by reaching out to prospects in sunny Southern California or Florida, where the demand for roofing is almost year-round.

Geographic expansion worked for Greg Bailey, founder of Outdoor Living Today (OLT) in Ridge, British Columbia, Canada. The company manufactures and sells do-it-yourself backyard kits for projects including gazebos, raised beds and outdoor sheds. Made with sustainable practices using Western Red Cedar, the kits sell for $500 to $10,000 on the company’s website and at retailers including Costco, Lowe’s, Home Depot, Walmart, Wayfair, and Hayneedle.

OLT currently sells about 7,000 kits per year; 4,000 of those are sold in April, May or June. During its “shoulder” season, October through February, when sales are low, OLT traditionally focused on manufacturing stock for the busy season. But Bailey’s expansion strategy has worked so well that, he says, “We’re beginning not to have a shoulder season.”

How did he do it? In the winter, OLT focuses on warmer states—“California into Florida,” Bailey explains. In fact, OLT has even expanded to the southern hemisphere—New Zealand and Australia—which enjoy summer weather during North America’s winter. The result: Strong sales 10 to 11 months of the year and growth of about 20% annually.

Expanding your market to other countries, as Bailey did, has the bonus of buffering your business against ups and downs in the regional or national economy as well as the weather.

Read the success story for Outdoor Living Today

3. Expand your demographic market

Can your product line be repurposed for a different target market? For instance, a company that sells Halloween costumes can target customers who need costumes for Mardi Gras or Carnival, or extend sales year-round by targeting community theater groups or children’s theater groups. A company that makes office furniture for commercial clients could sell to consumers. Brainstorm ideas with your employees, and you’ll be surprised at the new customer demographics and ideas generated.

Do your homework

Before undertaking any expansion, do some thorough market research to make sure the demand is there. At OLT, market research helped convince Bailey to go ahead with a new product — a tiny house that can be built on-site without heavy equipment, catering to one of today’s hottest real estate trends.

Survey your existing customers to discover their unmet needs and pinpoint opportunities. Learning what your current customers like to do in the off-season can spark plenty of ideas. If you manufacture water sports products, for instance, you might discover that 50 percent of your current customers also participate in snow sports. It’s a fairly easy move from manufacturing water skis to manufacturing snow skis.

Don’t forget to research the competition in the geographic area and product category you’re considering.

Last, but not least, be sure to create a financial plan for your expansion. Growth takes money, so it’s vital to make sure you’ll have enough working capital to cover your operating costs.

Part 3 of our series on managing a seasonal business will offer advice on conquering cash flow challenges. Read Part 1 of the series.