Five Keys to Success for a Seasonal Businesses
On our family vacation over Labor Day weekend, we went hiking with friends along the shore of Lake Tahoe’s Emerald Bay, and afterward stopped by the Sunnyside Restaurant in Tahoe City for a late-afternoon snack. There was a very large noisy party inside in the bar area, but fortunately plenty of empty tables on the deck with a wonderful view of Lake Tahoe. So we were both dismayed to learn from the hostess that they could not seat us, as the kitchen could not keep up with the customers they already had. “Come back next weekend, we’ll have plenty of room to fit you in,” we were told as we left for another restaurant down the road.
Then this past weekend, we took an hour long drive north to Stuart’s Farm in Granite Springs, NY to pick up some apple cider, apples and pumpkins. The Stuart Family has had this farm since 1828, and I’ve been taking my family there since 1986. They are a bit off the beaten track, and used to be mainly a destination for school groups and Yorktown locals, but word seems to have gotten out. On a crisp fall day, their visitor count is well up from anything I can recall, but easily accommodated by their expanded parking. The prices are a lot higher then I remember too: $9 for a gallon of apple cider, the same price charged by Fairway Markets in NY City, and $.79/lb for pumpkins.
All of which got me thinking that the folks at Stuart’s Farm seem to know a whole lot more about running a seasonal business than the owners of the Sunnyside Restaurant.
But what exactly are the keys to success for running a seasonal business? Based on my experience, I would boil it down to these five things:
- Understand both your peak season and off-season demand – Stuart’s Farm seemed to have this well understood, while Sunnyside Restaurant did not.
- Service as much of the peak season demand as you can do economically – temporary labor is often a good solution, provided you don’t damage the brand, due to poor quality or service.
- Avoid price discounting during the peak season – once we had made the drive to Stuart’s Farm, I was pretty well committed to buy the cider, and to buy the pumpkins, regardless of the price. And if I had decided not to, there was someone else right behind me in line who would have. So there was no reason for Stuart’s to be offering any discounts, the cider and pumpkins were sure to sell out.
- Avoid advertising in peak season – it only exacerbates the seasonality of the business. This was a lesson I learned earlier in my career, as financial manager on the team that successfully launched Jell-O Pudding Snacks. The plant in Mason City, Iowa could not keep up with demand in the fall, yet the marketing team insisted on back-to-school advertising. I convinced the marketing team to stop doing this, as it made no economic sense to whip up demand beyond the point at which we could service it.
- Plan your cash flows carefully – the money you make in peak season has to last you through the off season. After nearly 200 years of continuous ownership of the farm, it seems as thought the Stuart family has this one mastered!
