Running a seasonal business in Alberta comes with unique challenges. Whether you are a landscaper or construction operator racing against weather windows or an ice cream shop dependent on summer traffic, your success can depend significantly on intelligent cash flow management during the off-season.
Here are some practical ways to keep your business viable year-round.
Understand your business cycle
Every seasonal business has its rhythm, and it’s essential to map your cash flow for the year. Although you may make 80% of your revenue between May and October, you will likely still have year-round costs like rent, utilities and staffing. Is your sales cycle similar every year – can you identify its highs and lows? What are your main low-season payments, and have you had difficulties paying them?
Create a buffer
Set aside a percentage of peak season revenue for off-season expenses. Build an emergency fund for unexpected costs. During your high season, automatically set aside a daily percentage into a separate account for off-season expenses. This creates a financial buffer without requiring extra discipline during busy periods.
Boost off-season revenue
Developing an alternate revenue stream for your off-season can address cash flow issues. Offering gift cards and other pre-sale discounts at the end of the peak season and during slow months can also boost revenue.
Monitor your cash flow
Use accounting tools to stay on top of your finances - QuickBooks and Xero can automatically track every dollar in and out of your business. Set up alerts for low balances and overdue payments and consider connecting your accounting software to your business banking for real-time insights. During slower seasons, make it a habit to review your numbers weekly. This simple routine helps you spot potential issues before they become problems.
Learn more about cash flow management tools.
Set strategic payment terms
The key is to collect more cash when customers are eager to book, giving you a financial cushion for leaner times.
For instance, a wedding venue might require 50% upfront during peak season but offer flexible payment plans in winter. A snow removal company might incentive early-bird payments in the fall, while a tour operator adjusts deposit requirements based on tourist seasons.
Managing expenses
- Negotiate with suppliers to align payment terms with your busy season or seek out alternate suppliers who will.
- Consider seasonal staff instead of year-round where possible.
Smart inventory management
The small business supply chain can significantly impact profit, but 43% of small businesses don’t track inventory. Don't let your cash sit on shelves.
- Negotiate return policies with suppliers wherever possible.
- Use end-of-season sales to convert inventory back to cash.
- Order stock just before peak season – Just-in-time (JIT) inventory can minimize excess stock and reduce holding costs.
- Drop-shipping may make sense for some businesses as an alternative to stocking inventory.
Use credit wisely
Financing can not only be your safety net, it can also help increase profits if used strategically. A line of credit will position your business to maximize profits during Alberta’s intense but profitable summer months. Here are a couple of examples:
- A construction company owner uses a line of credit to keep skilled tradespeople on payroll, maintain heavy equipment, and lock in lumber prices before spring construction season drives them up. When the ground thaws and our short but intense building season begins, they’ll have crew and materials secured and ready.
- A whitewater rafting business uses a working capital loan in early spring to overhaul rafts, replace gear, and hire and train new guides before the summer tourism rush begins.
Communicating plans openly with your ATB advisor allows us to adjust your credit limits seasonally. This will ensure you have extra capacity when you need to gear up for high season and potentially reduce your limit (and carrying costs) during slower periods.
Your advisor can also help you anticipate cash flow gaps, recommend the right mix of financing options, and structure payment terms that align with your business's natural revenue cycles. This partnership approach helps you manage costs while maintaining the flexibility to seize opportunities when they arise.
Learn more about using credit strategically.
The bottom line
Managing seasonal cash flow isn't about avoiding slow periods - they're part of your business. Turn quiet periods into opportunities with intelligent planning. Our advisors are here to help you make the most of every season.
