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Expert Panel® Forbes Councils Member featuring JC Abusaid, CEO/President

For some companies, the “busy season” only begins with the end-of-year holiday rush. Others see more sales during the summer vacation and travel months. If your business is prone to seasonal shifts, you may notice a significant difference in your cash flow in the “off” season, which may make budgeting, staffing and bill-paying more challenging.

However, with the right strategies, seasonal businesses can remain successful and profitable even during their “down” times. Below, 16 members of Forbes Finance Council share their best financial tips for seasonal businesses.

  1. Maintain A Minimum Bank Balance

Seasonal companies should keep a minimum of two months’ business expenses in the bank. Not only will this help you pay bills and staff, but it will also allow you to keep up with your marketing. If you slow down on your marketing during a seasonal slowdown, you’re going to drain your pipeline for the next few months. – Christina DeSimone Nappi, The DeSimone Agency Inc.

  1. Keep Your Cash Flow Model Updated

Conduct cash flow modeling annually, quarterly, monthly and weekly. Keep a 13-week cash flow, and update it weekly for quick pivots. Identify fixed and variable expenses, and plan to cover fixed expenses, such as key personnel, year-round. Historic seasonal variables data can guide you during budget creation. Secure a line of credit for the unexpected (for example, equipment failures), and plan a fixed payment for a line of credit in your cash flow. – Cynthia Hemingway, Fourlane, Inc.

  1. Develop A Cash Preservation Mentality, And Be Opportunistic

A cash preservation mentality is the key to managing the down cycles of seasonality. Cash flow forecasting, a thorough understanding of variable and fixed cost structures, and potential financing alternatives are essential. However, it also pays to be opportunistic—find alternative ways to leverage excess capacity and keep cash flowing during down periods. – Rick Loss, MyBasePay, LLC

  1. Avoid Short-Term Decisions

Seasonal businesses should understand how much working capital they should have. Knowing this helps you keep a steady hand on the “rudder.” Anchor to your strategic plan. Avoid making short-term decisions—think long-term. It is tempting to make short-term decisions to improve or address an immediate need; however, reflecting back on those decisions, we can often see that they may not have had the best impact. – John Abusaid, Halbert Hargrove

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