Even if a business isn’t thought of as seasonal, interest in and demand for products and services is still affected by seasonality. It’s a perfectly natural, and at times, annoyingly unavoidable aspect of business. But never fear. Just like we anticipate the leaves turning and the snow falling, the seasonality I’m talking about is predictable. This means it can be learned and understood. And, through that understanding, those perfectly unavoidable instances can be leveraged to your benefit.
How Seasonality Affects Business Sales
Seasonality plays an important role in business. Oftentimes, it is the cause of otherwise unexplained increases and decreases in sales. Those who lack an understanding of an industry’s natural cycle might misdiagnose a decline in sales, especially if it lasts longer than two months.
But, with a basic understanding of seasonality, a lull like that won’t lead business owners toward implementing unnecessary changes or chasing wild geese. Instead, it will be attributed to the industry’s annual fluctuation.
Seasonality and Business Performance
Accounting for seasonal fluctuations is necessary for developing a clear understanding of business performance. Take for instance some of the standard seasons capable of influencing consumer demand: holidays (Christmas, Easter, Valentine’s Day), government (tax returns, first day of school), and fiscal timelines (end of quarter and year-end reporting) are all key influencers.
Knowing how your product or service is affected by these timetables is necessary so the sales data can be adjusted to represent accurate sales performance. Otherwise, raw data showing a poor quarter might actually be above average when viewed according to seasonal benchmarks. Without accounting for seasonality, you’re leaving a blind spot in your business plan.
Leveraging Seasonality for Business Performance
Perhaps the greatest benefit to understanding how seasonality affects business sales is that it clues business owners into what they can and cannot control. Sometimes sales will be up and sometimes sales will be down, but if you’re able to adjust those figures according to the industry data, you’ll know whether those fluctuations are inside or outside your control. Which means you can allocate your energy and resources where they can make a difference.