seasonal business cash flowWhile there are many advantages to running a seasonal business, one of the primary challenges is managing cash flow—having enough money on hand to get ready for the busy season, making the most of the revenue generated in season, and having enough money on hand to pay bills in the off-season.

With these tips, small business owners with seasonal businesses can learn to better manage cash flow to optimize opportunities before and during the busy season, while also learning ways to save for and get through downtime.

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1. Keep a calendar of bills and scheduled payments

Keep a calendar of bills and scheduled payments to help you plan your expenses properly as you gear up for the busy season and ensure that you never fall behind on bills in the off-season.

Record all business transactions in a bookkeeping program (QuickBooks is popular, and there are others available). In addition to keeping track of revenue, you won’t forget to include expenses in end-of-year financials, which will help decrease your taxable income.

Regularly review your business bank statements to confirm all transactions and avoid unnecessary fees, like those for insufficient funds and overdrafts.

Prepare a schedule in advance, so you’ll be more likely to put enough money away while revenues are strong, and be ready for any dips in income.

2. Have a full understanding of your business’s working-capital cycle

Have a full understanding of your business’s working-capital cycle to optimize opportunities. For many seasonal businesses, this will look like inventory to accounts receivable, to cash, to accounts payable, to inventory.

Inventory: How much do you have? How much do you need in every order? How often do you order? Can you buy in bulk during the high season to save money? Wholesalers typically provide better price points for bulk purchases.

Cash: Know how much cash you have at any given time. Most business owners rely only on bank account statements or current balances, but checks may have been cut that haven’t posted in the bank, which can lead to significant miscalculations. It’s critical to track everything you spend and earn daily.

Accounts payable: Negotiate with vendors to get longer terms and lower payments during the off-peak season and larger payments during the high season to help you optimize your cash-flow cycle, and be sure to make all payments on time and as negotiated to stay in good standing and avoid getting behind on bills.

Accounts receivable: Invoice clients on time and collect regularly, and negotiate with your customers for faster payment terms to create a smaller working capital gap. If a client falls behind on payments, consider whether to continue doing business together, as small business owners are often lax about following up on late payments.

3. Look for additional revenue streams during the busy seasons

Look for additional revenue streams to capitalize on during the busy seasons and use slower months for planning. It’s important to keep your core products and services as your main focus during your busy season, but keep an open mind for other revenue opportunities.  

For example, a landscaping company will focus on consulting, installation, and maintenance on projects throughout the warmer months, but may also maintain a plant nursery that can remain operational for additional months throughout the year.

Before taking on an additional revenue stream, make sure that it fits in with your core operations and overall vision for your business, and won’t have a negative impact on your primary lines of business.

4. Secure a loan or line of credit in advance

Prepare for off-season cash-flow crunches by securing a loan or line of credit in advance: Several months before you may need it, meet with your banker about obtaining a business loan or line of credit. Most banks will want to see your business plan when you apply for a business loan, so start thinking about putting that together too. 

For some businesses, too, it may be advantageous to negotiate for interest-only payments during the slow times and full monthly payments (interest and principal) during the busy time.

Loans and lines of credit can also be used strategically to fuel growth in your seasonal business. A loan with affordable monthly payments and reasonable terms can help you hire additional staff, buy more efficient equipment, or even refinance other higher-cost debt your business may have.

If you do take out a line of credit, make sure to understand its “cleanup clause contractual provision”—that’s bank-speak for how long you’ll need to bring your balance down to zero. Usually, it’s for a period of 30 to 60 days. Be prepared!

5. Budget and forecast properly

Budgeting is critical for seasonal-business success, and effective cash-flow forecasting will keep you on top of your cash availability throughout the year. If you need help creating and using cash-flow forecasts, this EGF article can help. Don’t just think in terms of the on-season or off-season.

Most successful seasonal businesses don’t consider their operations as seasonal at all. Instead, they shift focus during different times of the year and plan with the long-term in mind. Do your best to plan for three to five years out to ensure you’re prepared for the unexpected and have clear goals in mind for the future.

6. Staff appropriately

Staffing appropriately during and between high seasons is essential, as insufficient staffing during your busy season can mean lost sales, and overstaffing during your low season can mean extra expenses that you don’t need and can’t afford.

Consider hiring independent consultants on a temporary basis and scale down your staff in the off-season. Another option, if it fits your business, is to bring on employees on a commission-only basis, so that you’re paying less during your downtime. 

As a note: Be cautious about providing benefits to seasonal staff. While benefits are a great way to retain talent, ensure that your business is profitable, stable, and sufficiently capitalized first.

If there’s an opportunity to keep seasonal staff on for the off-season, take advantage of it. This can help fight the statistically high turnover for seasonal employees and show that you value the work they put in during the peak season.


For seasonal business owners, the off-season is the time to review every aspect of your business and prepare for your busy season—and during the busy season, it’s just as essential to stay on top of your daily financials to leverage opportunities to generate revenue and strengthen your position when things slow down.

AvatarSteven Cohen

Steven Cohen is president of Excelsior Growth Fund (EGF), which helps New York State small businesses grow by providing streamlined access to business loans and advisory services. Excelsior Growth Fund is a not-for-profit 501(c)(3) and certified by the U.S. Department of Treasury as a Community Development Financial Institution (CDFI). Steven has a bachelor’s degree from UC Berkeley and a master’s in public administration from Harvard’s Kennedy School.