Financial Strategy
Seasonal business, steady obligations
“Our year has a few strong months and a long quiet stretch.”What owners tell us
The situation
Signs you are facing this
- Cash is plentiful after the season and tight before it
- Salaries, rent and loan instalments fall due all year round
- The overdraft covers the quiet months and is slow to clear
- Hiring, refurbishment and stock decisions are made without a month-by-month plan
The situation
Seasonal business, steady obligations
Driver 1
An annual budget for a monthly problem
Yearly totals hide the months when cash runs out.
Driver 2
Fixed costs sized for the peak
The cost base assumes the busy season continues all year.
Driver 3
Funding not shaped to the cycle
Repayments and limits ignore when cash actually arrives.
- 1
Diagnose
Map the seasonal curve
Use past monthly sales, costs and cash to draw the real cycle.
- 2
Design
Plan cash month by month
A rolling forecast that shows the low point and when it arrives.
- 3
Embed
Shape costs and funding to the cycle
Reserves in strong months, repayment profiles and limits that match the low season.
- Seasonal cash curve
- Rolling 12-month cash forecast
- Reserve and funding policy
- Cost-base review for the low season
Start this week
- Chart monthly sales, costs and cash for the last three years
- Build a rolling 12-month cash forecast
- Set a minimum cash reserve for the low season
- Align loan instalments and limits with the cycle
Common questions
How do seasonal businesses plan cash?
By forecasting monthly or weekly cash against the seasonal sales curve, setting aside reserves in strong months and agreeing funding that matches when cash is short.
Which sectors are most affected?
Tourism and hospitality, education, agriculture, construction and festival-driven retail commonly see strong seasonality.
Related situations
- “We are profitable, but cash is always tight.”Profitable on paper, short of cash in the bank
- “Our bank limit is up for renewal and we are not sure the numbers will pass.”Bank limit renewal and covenant pressure
- “We are raising money and our numbers will not survive an investor's questions.”Raising money, but the numbers are not investor-ready