Article Summary: Preparing for your busy season is much easier today than it once was. In fact, you don’t need to guess—you can even use data to help you ramp up and get ready.
Here are three things you can do to prepare for your business season, whenever it is:
- Incorporate predictive analytics into to anticipate demand: Look into software and tools that will allow any business to leverage more data into their decision making.
- Review how you’ve done in past years: Hopefully you’ve been keeping track so you can refer back to your success and challenges from previous years.
- Leverage financing to fuel investment: Many businesses, both large and small, rely on financing to take advantage of opportunities to grow. Strategically looking at your financial needs for the year might help you fuel growth during the business season.
Farmers understand that you need to “make hay” when it’s the season for making hay. Small business owners do too. Keep reading to learn more.
In many respects, a busy season is a healthy development. It’s a signal that your company is generating abundant revenues. Busy seasons may also signal a payoff for the hard work associated with establishing a business and getting the word out to prospective clients and customers. However, maximizing the benefits from a busy season requires more than providing services and products in real time. Anticipation and analysis are each essential to ensure that your company is prepared to properly handle busy seasons.
Incorporate Predictive Analytics to Anticipate Demand
Back in the day, attempting to anticipate demand involved more guesswork than anything else. At best, companies estimated their future inventory or service needs based on the outcome of previous seasons or accounting periods, coupled with applicable forecasts — such as anticipated severe weather or a rise in unemployment rates.
However, thanks to better data availability along with advances in hardware and software to analyze the data, guesswork has been largely replaced by systematic, estimation known as predictive analytics. Predictive analysis harnesses the information contained within historical data to anticipate future outcomes. No longer the exclusive domain of mathematicians and statisticians, predictive analytics has migrated into the mainstream of business operations. Companies that fail to incorporate predictive analytics into their business operations run the risk of being left behind by their competitors.
Along with minimizing fraud risk and evaluating customer creditworthiness, predictive analytics also represents a powerful tool for inventory management. Predictive analysis also improves the effectiveness of marketing campaigns through analyzing customer purchases. Identifying, cultivating and retaining the potentially most lucrative clients or customers is another excellent use of predictive analytics.
Here’s a list of 10 predictive analytics tools to help start your search for the tools that could be right for your small business.
Review Company Past Performance
Of course, the best predictive analysis system is only as good as its data. It is not enough to collect basic sales numbers. A proper review of your company’s past performance can address many questions, some of the most important of which are listed below.
- Is the company effectively reaching its core customers? If not, should there be a reconsideration of the company’s marketing techniques — or its core customers?
- How did the company perform in comparison to comparable competitors? Are companies of similar available capacity in products and/or services even busier during busy seasons? If so, how do they accommodate increased demand?
- Has the busy season generated a potential for customers who will return during subsequent busy seasons or even during slow season?
- Did the company adequately meet its customers’ needs and/or desires during the busy season? Selling out of a hot item is not a positive outcome if too many customers walk away from an establishment empty handed.
- Was the busy season evenly distributed among products or services? If not, which products or services lagged?
- Was your staff or team up to the task of handling the busy season? If not, was the problem due to inadequate staff numbers, poorly trained staff or staff whose qualifications were simply not up to the task?
Answers to these and related questions form the foundation of an solid Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis the data from a well-executed SWOT analysis along with predictive analytics provides an excellent basis for analyzing a past busy season as well as preparing for upcoming busy seasons.
Utilize Business Loans and Financing to Fund Essential Investments
One possible outcome from a SWOT analysis and predictive analytics report is that additional investment is needed to finance essential equipment, inventory or personnel. Especially in very competitive markets or industry sectors, failure to keep up with current equipment and inventory, software or marketing techniques can result in a company being labeled as unresponsive, out-of-touch or outdated.
However, financing essential investments can be challenging. Unless your company is flush with cash, borrowing is called for. There are a number of options for business borrowing, and no one-size-fits-all solution. In fact, depending on size, industry or other factors, companies may need to consider a combination of options to obtain necessary funds from borrowing. A few of the more common options for small and medium-sized companies are listed below:
- Bank and Credit Union Loans – Although the financial crisis has yielded to an ongoing recovery, banks have retained stringent standards for granting loans, especially to startups, entrepreneurs or small businesses. Companies with business plans have the best chance of securing bank loans, especially from community banks. Credit unions may also be more lenient, especially with long-time customers.
- Small Business Administration (SBA) – SBA loans carry federal guarantees, which make it easier for businesses to qualify. However, a solid business plan is still necessary.
- Invoice Factoring – For companies that process payments through invoicing, factoring represents one of the most readily available forms of funding. With invoice factoring, companies yield a percentage of their paid invoice to the invoice factoring provider.
- Micro Loans – Credit challenged business borrowers can often obtain small loans (under $35,000) from nonprofit micro lenders. Formerly associated with enterprises in the developing world, micro-loans are increasingly available in the United States.
- Crowdfunding – Crowdfunding isn’t limited to the greatest new gadget or aspiring artist attempting to fund an album. Small companies and startups also turn to crowdfunding. However, many crowdfunding campaigns fall short of their goals.
- Online Lenders – Many online lenders, like OnDeck, offer loans for a variety of loan purposes and regularly work with small business owners to fuel growth opportunities or fund other business initiatives. Applications are usually very simple and business borrowers can have an answer that same day and potentially the funds to work with within 24-48 hours.
The key to maximizing the benefits of a busy season is through proactive planning rather than reactive regrouping. Using tools such as predictive analytics, SWOT and judicious financial investments can ensure that your company is ready not only to meet the demand of a busy season, but to reap maximum profits now and in the future.