Why is seasonality important

If you know that your sales are going to dip in the spring no matter what you do, you might be tempted to pull your foot off the gas when March rolls around.

So ask yourself: Are you really putting the same effort into prospecting during your slow season as you are during your busy season? Do you have a marketing budget at the beginning of the year that is nearly tapped out by the end of the fall?

Do you always keep the same number of sales reps on your team? When do those reps tend to go on vacation? In other words, make sure that you're not just looking at buyer behavior when analyzing seasonal trends. Your team's behavior can be driving those trends in ways you might not have even considered. How does seasonality affect your business, and how do you take advantage of it?

Tweet us your thoughts nutshell , or join the Sell to Win private Facebook group and chip in your two cents there! Nutshell Marketing plugs directly into your CRM data, so you can create highly targeted audience segments, track the impact of your emails in real-time, and manage all your communications out of a single tool. Get started for free! Sell to Win. Seasonal businesses can offer business owners invaluable additional time to develop their systems, processes, procedures, and budgets. The offtime provided to seasonal business workers can decrease burnout and keep their engagement levels high.

For employees with a limited schedule, such as a college student, these seasonal roles can be considered ideal. Once you've formed an outstanding team of professionals for your seasonal business, your hiring process will likely be much more time-efficient and cost-effective. Additionally, a great work environment can lead to personal referrals from your existing employees to their own job-seeking network, further expanding your candidate talent pool. Seasonal businesses often have a narrower customer base, a benefit for marketing and outreach initiatives.

For example, a summer camp could start marketing directives during the winter months through discounted pre-registration offers at local schools. The consequences of seasonal businesses include unexpected seasonal variations in weather patterns. An unforeseen weather event can be catastrophic to even the best-laid business plans. Pain points including shipping delays and inappropriate inventory levels can be avoided by obtaining weather data in advance.

While minimizing risks, make sure to consider that while seasonal work offers employees many benefits, your employee turnover rate may be higher than other businesses due to the instability and scarcity of available shifts. The capital required to start up a seasonal business can be difficult to gather and there are often many large upfront investments necessary. However, with the right team, dedication, and proper management, a seasonal business can be a great investment.

When used correctly a seasonality forecast can decrease business costs and increase bottom-line profitability. Predicted seasonal variation can inform business decisions ranging from inventory levels to staff hiring initiatives. Seasonality forecasting methods can assist business professionals with stock and economic trend analysis.

For example, retail sales are generally affected by seasonality. If the monthly data of a retail operation is evaluated without the context of seasonal variations, a business can easily assume they are more profitable than they actually are. Seasonal forecasting provides businesses with critical data to assist with preparing for upcoming business operations.

You may need to segment your data geographically to identify seasonality patterns. At the same time, aggregating forecasts to a less granular level—product category instead of product, for example—may make it easier to distinguish seasonal patterns from random noise.

Most forecasting methodologies allow for explicit modeling of a seasonal term. The Holt-Winters seasonal method comprises a forecast equation and three smoothing components for the level, trend and seasonal components. But beware of their limitations and additional accommodations you may need to make depending on the model you select.

Then there are some models that assume integer seasonality. Instead, you could model them as binary regressors using holiday calendars.

Watch out for times that basic seasonality is not actually the most relevant factor in the forecast. It may just be covering up the true underlying driver.

As a result, you would be better off incorporating the regressor variables in the model instead. For example, purchases of antifreeze have a more direct relationship with the temperature than the precise time of year, as weather patterns waver on an annual basis. Schedule Consultation Now. Whether you are a business owner looking to sell your company, or represent an acquisition-minded corporation, or are personally interested in owning your own business, we can help you.

Transworld Blog From business brokerage to mergers and acquisitions; we are the business sale specialists. All Posts. No business is exempt from the effects of seasonality. But never fear. This means it can be learned and understood. And, through that understanding, those perfectly unavoidable instances can be leveraged to your benefit. Seasonality and Business Performance Accounting for seasonal fluctuations is necessary for developing a clear understanding of business performance.

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. Brian Caldwell. Recent Popular Categories.

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