In every kind of business, there are certain periods of the year that are called off peak seasons. That is the time when business starts to slow down, sometimes to a standstill. In some places, businessmen who have made a killing during the peak period will take this opportunity to close shop and go for a long holiday. Those who makes it from hand to mouth have no choice to slog on despite the poor business.
Off Peak seasons normally occur between the months of March right to August, when things will slowly start to pick up again. That’s because from September till February, almost all major festivals happens during these few months. Coupled with the year end bonuses, spending naturally increases. Knowing this trend, a businessman’s should be able to plan out a strategy to cut expenses during the off peak season to minimise the burden.
The most first thing is to cut down on purchases. Most retailers increases their purchases during the peak periods to take advantage of the increased sales and like most retailers, they get a credit term of at least 60 days before they are required to pay for their purchases. Smart businessmen will keep all their profit from the peak period to cover the losses and sustain purchase during the off peak season.
Say for example January is a time where business is the best. Naturally businessmen will increase their stocks. Purchases made in January will have to be paid in March or latest by April, a time when business starts to drop. If what was made during January has been channelled elsewhere, they will have a hard time paying for what they bought in January. So the wise thing to do will be to reserve what you made in January in anticipation of what will happen in April.
During festival seasons. many suppliers or hypermarkets will start to compete with each other with each other by slashing prices. it is during these times where small retailers have a field day picking up items that cost less that their cost price if they were to buy from their regular suppliers. Those who has the money will make killing by grabbing as many of the cheap items as possible. However, they will have to pay in cash, so if those businessmen who are cash strapped, will loose out on this opportunity.
I have friends in the restaurant business who stocks up a whole year of beer supply during the New Year Sales offer by supermarkets when they slash the prices of beer to way below cost. Selling them at the regular price sold at restaurants, he stands to make an extra 2 bucks for each bottle of beer sold. If he sells about 20 bottles a day, he stands to make an extra 40 bucks a day, conservatively, he makes 14,600 extra per year. To make this money, one will have to be as disciplined as him. All the money made from the sales of beer will have to be kept aside. Come the next New Year, he will have the money to stock up for another Year and the money made during that year will make sure he have a really Happy New Year.