Managing Finances During Seasonal Fluctuations: Tips for Small Business Owners

Every small business owner juggles — client and employee schedules, materials and products, budgets and bills. For most entrepreneurs, managing finances during seasonal fluctuations goes on that “juggle” list too. Even if your business doesn’t peak and dip during certain times of the year, your customers’ businesses (and purchasing patterns) might.   

Knowing how to navigate seasonal shifts is crucial for maintaining financial stability and for setting up a small business for long-term success. The tactics and tips that follow should make that particular juggle more manageable (and highlight the ways Merchants & Marine Bank may be able to help).

ONE: Study your patterns

Effective strategy starts with knowledge, and your books are a roadmap. Review your sales history for patterns: peaks, valleys and cash flow trends. When you have a sense of past trends, you can anticipate future changes and make financial decisions to account for them.

TWO: Shape seasonal budgets

Build a budget that allocates resources — what you’re spending on staffing, inventory, marketing and everything else — around the patterns you found. By taking a proactive approach, you’ll be prepared for the ups and downs that come with seasonal fluctuations. 

THREE: Consider pricing and promotions

Seasonal price adjustments and promotions are nothing new — but are they new to you? If you aren’t already doing it, consider increasing prices during peak seasons to align with demand and maximize profits. During slower seasons, discounts or promotions can help sales pick up (and give you a marketing message that customers respond to). 

FOUR: Build capital reserves

We can all learn a thing or two from squirrels and their seasonal savings approach. During peak seasons, set aside a percentage of your profits as a cash reserve. (We offer Capital Reserve Savings Accounts for just this purpose.) Those reserves help you avoid cash flow challenges during slowdowns, and the need for short-term, higher-interest borrowing. 

FIVE: Prep for peaks with flexible financing

Be ready for peak seasons by exploring credit options that can offer working capital when you need it. Business Lines of Credit and Inventory Loans are just two of the many business lending options we offer at Merchants & Marine Bank. They were shaped to support small businesses during high-demand periods and to help you seize growth opportunities.

Our business bankers are here to help

Seasonal fluctuations are a complex juggle, but having proactive measures like these in place can make it more manageable. If you have questions about business loans, checking accounts, business credit cards or other business banking needs, our business bankers have answers.  

Find your closest Merchants & Marine Bank location here, or contact our community bank online.