Beating the November-to-February Doldroms

A penny saved is a penny earned.-Benjamin Franklin

One of my owners complained, "I refuse to accept the conventional 'wisdom' that there is nothing I can do about business being off during the winter months." I liked the idea. Let's fight back! I began searching for some practical ideas. In his book The Art of Profitability, Adrian Slywotzky suggests that the real problem for a cyclical business is to find a way to remain profitable during the off-season. If we look at it from that point of view, the following suggestions become immediately obvious. These are easy things to apply.

  1. Reduce buying. Sales are down and so should be purchases. If during the summer months you generally bought six of a particular item per order, try buying four during the winter months. Four during the winter months may last as long as six during the winter months. Watch your vendors. Tell them what you expect.

  2. Reduce inventory. This is a good time to mark down inventory that you want to get rid of. Return slow-movers that you tried during the summer to the vendors who will take them back.

  3. Delay expenses. Put off repairs and buying supplies that you can do so without increasing the damage. The dollar amount of the expense may be the same in March as it would be in December, but it will preserve your cash flow. You want to have as much money available for spring as possible.

  4. On the other hand, make repairs that will save you money the next few months. For example, if all your canopy lights are in good repair and operating at peak performance, you can order your employees to turn only half of them on during the first hours after sunset and again after 11pm. If all your canopy lights are not in good working order, then you cannot do this because it will be noticeably too dark.

  5. Reduce your labor costs.
    1. Is there anyone you have already decided to let go? Now is the time.
    2. If anyone quits, do you really have to replace that employee? If you do, wait until spring.

    These first five suggestions are about controlling costs to improve net profit to offset falling gross profit

  1. This is not just putting off expenses to "look good" now
  2. With the extra money on hand, you can make a better spring
  3. Besides, savings in steps #2, #4, and #5 are permanent savings.

    The next several suggestions are not about reducing costs, but about increasing sales even in the winter months.

    1. Firewood.
    2. Artificial fireplace logs, Duralogs, and accessories.
    3. "Winterize your car" promotions: , frost scrapers [snow scrapers up north].
    4. "Traveling to Grandma's House" promotions: windshield wipes, Rain-X (be aware of the variety of Rain-X products), car interior wipes, car caddies, and other travel conveniences.
    5. Christmas and New Year's products
    6. Don't just sell egg nog, promote it.
    7. Superbowl
    8. Have you ever thought about promoting hot food to go? Why don't stores that sell chicken fingers buy to-go cartons that can be promoted as "Family Packs" or "Game Time!"?
  4. Remind your customers that spring is going to come again and that you will have what they want. For example, if during the summer you find three iced beer tubs profitable, keep one on display year-round so that in the spring when your beer-drinking customers think of beer, they will remember having seen your iced beer tubs.

  5. Increase the price of moderately-moving items. Because customers are buying less, they are less sensitive to prices. You probably will not want to increase prices on beer and cigarettes, possibly not on soft drinks and candy, but you should on grocery items.