Innovation generates prosperity
December 26, 2011
By Paul Howard, Business Development Specialist and CBA IV
SAN ANGELO, Texas — The holidays are coming to an end and many small businesses have a reason to celebrate.
Hopefully sales were up during this season. Many small businesses depend on holiday sales to earn profits for the year.
Some rely on sales during other times, even those that are not retailers.
Unlike the mega stores, small businesses typically need to generate profits every month. Reviewing financial statements on a regular basis will help business owners get a handle on cash flows.
In the past few years we have witnessed some Halloween stores that pop up in August and September. They appear in vacant buildings around San Angelo, tempting customers with fabulous displays and costumes. They do a booming business for the two months they are open. As soon as November arrives the shops are closed and become empty storefronts again. This can be a teachable moment for small-business owners.
Entrepreneurs, especially those who don’t generate revenue year round, should see these stores as how not to address cyclicality. Businesses that struggle with cyclical revenues should not close their doors. They must work to generate profits even when their product or service is not in season.
A good example is a landscaping company. What can they do when winter arrives? Many landscapers have diversified their services and rake leaves or winterize lawns. This time of year they become Christmas light installers. Some new equipment may need to be purchased, but the business now is less cyclical and more consistent year round. However, small-business owners should stick to their primary revenue driver.
Entrepreneurs should continue to market their primary product or service during the offseason.
The landscaper can mention to winter customers that they would be happy to provide landscaping services in the spring and summer.
There will be times when business owners’ marketing strategies and revenue streams are not working out.
This is when they start thinking outside the box and determine ways to increase sales and revenues, which may require new business enterprises.
Consulting may be an option. Small-business owners could use their expertise and make money doing it. A consulting service does not have to follow an entrepreneur’s primary line of work.
Many small-business owners face seasonal sales. Overcoming the challenge posed by inconsistent revenue can be difficult at best, but small businesses that take action and are open to a different way of thinking can move their business back into the black.
By offering new services, using clever marketing, or pursuing new personal ventures, a small-business owner can take charge and ensure success.
“Business Tips” was written by Paul Howard, Business Development Specialist and Certified Business Adviser IV of Angelo State University’s Small Business Development Center. Contact him at Paul.Howard@angelo.edu.