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Coping with seasonal swings: tips for retailers and other businesses

8-minute read

Some businesses thrive at Christmas while others experience a seasonal downturn. On the other hand, winter can be the busiest time of year for many sole traders, while others have to push through until the weather warms up. If your business is affected by the seasons, here are some tips for coping with the peaks and troughs.

Key take-outs
  • Each season can be good for some businesses but a slow time for others
  • Planning ahead is important, as is keeping good records to refer back to
  • Review all aspects of your business to ensure you’re ready and optimised
  • Savings accounts and short-term loans may help

Keep on top of your cash flow

Most businesses will be keen to maintain a positive cash position, even when they know they are in a predictably quiet period. During the summer break for example, while retail and tourism could be booming, other businesses could be quiet – struggling to pay suppliers and staff, with cash flow typically at its weakest in January and February. 


So, what are some ways that could help improve cash flow?

1. Get paid faster

  • Invoice customers promptly
  • Send invoices to the right person
  • Chase up slow payers
  • Offer multiple ways to accept payment
  • Establish or renegotiate payment terms


According to the Australian Tax Office2, e-invoicing reduces the cost of invoicing by around 70%, so it makes sound economic sense to consider making the move online yourself.

2. Pay your bills when they are due

We’re not suggesting you upset your suppliers, particularly as they may be doing it tough in a seasonal business too. But if you’re in the habit of paying them early, perhaps think about paying on time instead. And it could be worth reviewing your payment terms and renegotiating arrangements if necessary.


If you find yourself in negative cash flow territory during a natural downturn period, you may wish to consider short-term finance options such as a business credit card1, an overdraft1 facility, or a business loan1. Talk to your business banker and accountant about the most appropriate choice for your circumstances.

Manage your stock and supplies

As a seasonally affected retailer there may be times when you have to stock up to meet demand, but you don’t want to get left with excess that’s locking-up cash. That’s why it’s important to keep detailed sales records this year, to help inform your purchasing strategy next year. 


When you’re considering the relative merits of fast-moving stock versus slow, remember we’re all overloaded with choice these days. Your customers may value a more selective range of products.


Ordering less but more frequently is generally good for cash flow, so take some time to check how flexible and responsive your suppliers can be. But make sure you’re not risking running out of this season’s big seller just as supplies dry up.


Alternatively, are you in the type of business that struggles to get necessary equipment and supplies during, for instance, the holiday season? If you are, then remember to plan ahead and check when essential suppliers may be out of action.

Shift dead stock

Do you have unsold ‘dead’ stock lying around, with little or no demand for it? Christmas might be a great time to offer ‘bundles’, which could be a handy way to offload not-so-popular items on the back of popular ones, while providing appealing ‘added value’ present ideas.


Or, if you’ve given up hope of selling some items, you might like to consider donating them to appropriate charities, or for use in raffle hampers.

Consider your pricing strategy

Are you in the retail business? In the rush to stock up for and manage seasonal sales, it’s worth taking time out to make sure you’re optimising the profit potential of your inventory. Again, look back at last year at the same period and ask yourself:


  • What sold the most, even at a lower margin? Could that margin be increased?
  • What sold the least, though at a higher margin? How can these products be pushed? Are they in the best location?
  • Is it okay to keep some margins low for products that lure customers in? Have you chosen the right ‘loss leaders’?
  • Are some lower priced items undermining the sales of more profitable items?
  • Do all prices comfortably reflect your desired customer perception of your retail brand. Are you smart and exclusive or cheap and cheerful?


Achieving a balanced pricing strategy will always be a juggling act but having sound sales records to refer to when planning will help you optimise your potential for profit.


And one other thought. If you’re offering deliveries, making them free is very attractive to customers and can often give you an edge.

Review your payment plan

If your retail or food and beverage business enjoys a seasonal income spike, do you have the right EFTPOS machine pricing plan for the time of year? You may need to switch to a higher income plan for the months running up to Christmas, then adjust it back in the New Year.


You don’t need to worry with Westpac EFTPOS machines1, as they come with simple flat rate pricing that applies all year round. 

Make buying from you easier

Today’s modern consumers and business customers have become used to paying the way they want to, rather than the way companies want to receive payment. So, take some time to review if you’re making it as easy and as fast as possible for people to pay you, whilst ensuring you offer the options that match your own needs.


Some payment systems may be more convenient and secure than others, while others could get the money into your account faster. It could be worthwhile checking out Westpac payment solutions1 to make sure you’re offering the right choices for your business, and to chat to your business banker about your needs.

Save for seasonal downturns

If yours is the type of business that benefits from a particular time or times of year, you may accrue surplus funds. So, what to do with them?


First up, it can be a good idea to have a business savings account1 linked to your business transaction account1. Through online banking1 you can quickly shift surplus cash into savings, where it might benefit from a higher interest rate. Depending on the account, it may be worth doing this even for short periods, particularly if no transfer fees are involved.


Not only does this put cash aside to help cover seasonal downturns, but it could also offer an efficient way to store the funds needed to fulfil your tax obligations come Business Activity Statement time.


If you’re prepared to lock your money away for a month, months or even years, it could be worth shopping-around for a business term deposit1 that matches your needs. Term deposits generally earn a higher rate of interest than standard savings accounts, but you must be comfortable with the possibility of general interest rates going up while yours is locked in. You’ll also need to consider the likelihood of an unforeseen need to access your cash before the ‘term’ is reached.


One business’s busiest time of year may be another’s quietest, but there are plenty of ways to help smooth out the peaks and troughs. We hope these tips have been useful.

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Things you should know

1. Westpac’s products are subject to terms, conditions, fees and charges; and certain eligibility criteria may apply. Before making a decision, read the disclosure documents for your selected product or service, including the Product Disclosure Statement and T&Cs for Westpac business credit cards, business loans and overdraftsmerchant services, business transaction accounts, business savings accounts, online banking and term deposits; and consider if the product is right for you.




The information in this article is general in nature; does not take your objectives, financial situation or needs into account; and does not constitute financial or taxation advice. Consider its appropriateness to these factors; and we recommend you seek independent professional advice about your specific circumstances before making any decisions.