SBA Outlines Hurdles for Seasonal Businesses

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Small seasonal retailers can earn 50 percent or more of total annual sales between May and September, according to Small Business Administration Regional Administrator Stanley Nakano.

Nakano outlines the top six hurdles for seasonal businesses to help them get through their selling season with the cash flow to weather the winter.

1. Lack of inventory control. Inventory control is crucial for all small retailers, especially during the busy summer sales months. It is important to remember that inventory equals profit, and knowing how much product to order, when to order it, and what items to order can make the difference between having cash in the bank or aging inventory on the shelves.

2. Hiring the wrong employees for critical positions. There is a cost to hiring the wrong people for key positions. Small firms tend to have less layers of management between the owner and the employees, therefore new hires must be able to perform with less direct supervision and be motivated to get the job done right the first time.  Avoid this issue by writing a detailed job description, and training new employees on how you want them to represent your business.

3.Undercapitalization is a problem no business wants or needs. Cash flow is the life blood of all small businesses. Cash flow allows a business to make payroll, pay suppliers, and keep its doors open. Business owners can immediately increase cash flow by collecting accounts receivables in a timely manner; not keeping too much cash tied up in unnecessary inventory; and eliminating unprofitable account relationships.

4. Not embracing online sales and social media. Recent U.S. Census Bureau reports show that more than $294 billion in e-commerce sales were made nationally in 2014. A Forrester Research Inc. study shows that by 2018 e-commerce sales will reach nearly $414 billion. In the near future, nearly 60 percent of all U.S. retail sales will involve the web. As more consumers make purchases using the internet, it is imperative that small retailers develop a retail web presence. Also, leverage Twitter and Facebook to promote one-day sales or plug special product lines and high inventoried merchandise.

5. Not delaying the employee office party and social events. It is sales crunch time from May to September. Office parties can cause distractions at a time when the business needs to be especially productive. Too much food and drink can not only cause a nasty hangover, but sidetrack employee and management’s focus.  Consider moving the company’s summer BBQ until after Sept. 30 and call it the annual end of season thank you event.

6. Innovation and creativity lost. Historically, locally-owned small retailers beat their big box competitors by providing outstanding individualized customer service.  The many summer holidays have pushed large retailers into flooding the market with lost leader pricing on a wide array of seasonal products. Small retailers should take the offensive by selling creative and innovative products that cannot be found at the local mega mall. Create a customer experience that will draw shoppers to travel outside of their comfort zone and discover that out-of-the-ordinary shopping district with 10 trendy stores, not 100 traditional chain stores.

For more information on ways the SBA can assist your small business this summer season, visit or call your local district office.


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