Seasonal risks small business owners should be aware of

By Lexie Lu

When you’re running a small business, there are potential landmines you must dodge if you want to be a success. Every business is unique, and the problems vary by industry. However, some facts remain true for nearly every business, such as the failure rates and what you need to do to avoid the same problems as other business owners who went before you.

The No. 1 reason businesses fail is lack of market need, with 42% of business failures due to a lack of demand. If a market has become oversaturated, it’s difficult to overcome that no matter what the season is, but there are some seasonal things you can do to increase your odds of beating out the competition. Knowing the risks for each season allows you to avoid the pitfalls and gain a tactical advantage. Each season brings opportunities for specific promotions, which we’ll cover below, along with the hazards to avoid.

Winter blues and slow sales months

Winter often ushers in a season of stagnant sales. Retail sales often fall dramatically in January, a trend seen year after year. To survive the cold winter months, plan by saving some of the profits from increased holiday sales, and promote events and exclusive discounts throughout the coldest days of winter.

Criminals may be indoors during cold weather, but still hard at work. Cybersecurity threats are a year-round issue, but winter is an excellent time to ramp up your site security. You likely have more time on your hands to focus on keeping your digital assets safe. If your business is cloud-based, it is vital to ramp up your online security.

The winter blues are a real thing, and may even impact small business owners. Lack of sunshine and customers may leave you wondering if your business will survive. Take advantage of the slower times to get a break from life and take a small vacation for yourself to de-stress and refresh your mind. Go to a small business owners conference and come back revived. If you can’t afford the vacation of your dreams, at least take some time off and visit local museums and attractions.

Spring hazards for your small business

Spring is all about fresh starts and new beginnings, and this may be true for your small business as well. Small business owners sometimes get excited about the prospect of the seasonal increase in tourists or people getting out and about after a long, cold winter and start ordering inventory. However, it’s also an easy time to overspend and wind up with a lack of cash flow in your business. Track data from previous years when ordering inventory to ensure you don’t overbuy and wind up with more stock than needed.

Spending too much on marketing to prep for upcoming sales and events is also an area of concern, so make sure you budget your marketing dollars for the entire quarter and don’t spend every dime the first few weeks of spring.

When it comes to weather, bear in mind hazards such as an increase in flooding and tornadoes during the spring. Although some areas are more prone to twisters than others, they can occur anytime and anywhere. May and June are the most common months for tornadoes, and they are most likely to hit in “Tornado Alley,” which is Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, South Dakota and Texas. Make sure your insurance policy includes protection for natural disasters, and that you’ve paid it in full.

Summer heat to avoid

In the summer, your profits might soar from tourist foot traffic if you have an offline location in a popular vacation spot, but it might also fall if you have an online presence. People are busy enjoying the great outdoors, so set a little money aside in case sales aren’t all you think they might be.

Your bills might also go up a bit in the summer, as you’ll use more electricity to air-condition your building and pay more employees to handle the extra work. If your profit margins are already slim, you may need to institute cost-cutting measures, such as making sure to turn off all the lights when no one is in the store and adjusting the thermostat during hours the store isn’t open.

For decades now, crime rates have spiked during the summer. Be aware of this tendency and work to protect your business and your employees. Make sure anyone working late has an escort to their car. Install security measures to avoid theft. While you can’t control every situation, such as looting during a riot, you can do a lot to prevent issues by installing lighting and cameras.

Fall preparation is vital

As fall nears, you must gear up for some of the busiest shopping months of the year. Between Black Friday and New Year’s, many businesses do the majority of their sales. Black Friday earned its name because it is a day when businesses historically move out of the red and into the black, or into profitability. However, if you don’t plan for this, you risk losing out on all those extra sales due to lack of inventory or advertising.

Overhiring can also be a problem during this busy season. You have to cover the extra work, but when the holidays are over, sales may drop dramatically. To combat this issue, hire seasonal workers who only want extra income for the holidays themselves. However, you should still give your top regular employees preferential shifts and hours, or you’ll risk losing them to competitors.

With more business, you also increase the risk of liability. Someone might slip and fall in your store, or you may completely mess up an online order. If you don’t already have an umbrella policy for your business, you need one. You should also make sure your small business is an LLC or S-Corp to protect your assets from a lawsuit.

Succeed from season to season

No matter what time of year it is, being aware of the weaknesses in your business allows you to spot potential problems. Regularly survey employees and customers for input on what you’re doing well and what needs improvement. Talk to other business owners about their struggles, so you can spot the same issues in your business before they become cash drains. With attention to detail and a bit of determination, you’ll make it through every season of the year and grow over time.


Lexie Lu is a web designer and CX enthusiast. She enjoys covering topics related to UX design, web design, social media and branding. Feel free to subscribe to her design blog, Design Roast, or follow her on Twitter @lexieludesigner.

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