How Startups Can Beat Seasonality


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I’ve been investing in, buying and restructuring small businesses for over 20 years and it’s a passion of mine to see everyone succeed from employees to shareholders, owners and investors. One of the issues however that appears to hamper growth or even attract investors is the acceptance of some of the lulls that come in the off season. I have found that keeping an offseason strategy in place is essential to everything from staff morale to staying relevant and minimizing losses – especially if you have a seasonal business or seasonal product like my lozenges that treat the common cold.

Run of the mill startups accept seasonal drag without a plan while the ones that eventually grow significantly larger do not accept profit swings or revenue losses as part of their company’s reality.

Here’s how to change your business model in order to mitigate or leverage seasonal demand:

Level out revenues

Mitigating Seasonality

As, CEO of Prophase Labs, makers of Cold-EEZE® Cold Remedy, I’ve mitigated some of the unavoidable seasonality of cold and flu season, which falls in the fourth quarter and first quarters. This has involved leveling out revenues, curtailing costs and launching complementary campaigns.

Off-Season Campaigns. If you have a holiday app that is supposed to make shopping for family and planning parties easier during the height of holiday hoopla (early November to early January) you should continue marketing from spring to summer on a reduced campaign structure. Keep a presence for Easter, 4th of July and Labor Day etc. with a reduced-level marketing campaign that does not demand the same capital as a Christmas season push. This also will help curtail costs and keep your budget more balanced.

Keep Buzz Alive

Complementary Products

Don’t worry about trying to change seasonal demand, that’s an exercise in futility and if you are say, a purveyor of summer sportswear, good luck convincing someone to wear your madras shorts in the winter. That’s not the point. How about instead, making a scarf for the winter in a similar design to your summer wear? The production cost of a scarf should be similar to that of a pair of shorts.

Along these lines I had Prophase Labs launch an allergy medicine. Because the manufacturing process, operational and organizational demands are similar to those involved with producing and selling the cold remedies line there isn’t much in the way of additional overhead. So not only are you limiting spending during a slow revenue period but now you’re staying relevant in the off season.

Off season public relations and engagement plan:

Keeping your brand relevant in the offseason has a lot to do with how engaged you are when people aren’t necessarily thinking about your product. Having consumers consistently identify with your company strengthens their loyalty, especially when you are engaging with them outside the lines of seasonal sales.

You could also use off-season pricing strategies in the form of TPR’s (temporary price reductions) and IRC’s (Instant Redeemable Coupons) for your product which keeps consumer engagement active.

Finally, tight fiscal management is crucial as income ebbs and flows. It practically goes without saying, but curtail spending when sales are lower and keep a war chest for marketing during the peak of the season. For example, a key component to marketing the Cold-EEZE brand is through TV advertising. In the summer months, we still advertise on TV but spend at about 10% of the rate of spending in the winter months. The same ratio holds for our other forms of advertising.

Inspire Employee Engagement Year Round

Office Morale

The offseason can drag on and some staffers may get complacent or lose interest when not given the opportunity to stay busy and make an impact in the summer. One method is to conduct brainstorms over the slower months where employees can offer suggestions on off season campaigns. Other ways to engage employees in the offseason is with product development meetings in which everyone gets provide their ideas for new products to be developed for the following season. This is particularly effective given that all of our employees are also consumers with ideas that are often just as good or better than management’s! When employees feel like they are a part of the decision making process it keeps their productivity up regardless of whether they are in-season or out-of-season.

About the author: Ted Karkus

Ted Karkus graduated from Tufts with a BS in Psychology and got his MBA from Columbia Business School. He began his career on Wall Street and is currently CEO of a small, publicly traded specialty Pharma company named ProPhase Labs.  In 1998 Karkus invested in and consulted to the vaccine company ID Biomedical when it was valued at $25 million dollars and on the verge of bankruptcy.  Under Mr. Karkus’s direction, the company was sold to GlaxoSmithKline for over $1.4 billion 7 years later.  Mr. Karkus is passionate about turning companies around and doing right by shareholders.

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