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Basics for Seasonal Business Owners

You may depend on a sliver of the year for the bulk of your business. Here's how to maximize the rest of it

The Stewart family was scrambling. Last May, Jeff Stewart and his wife, Mary, owners of Back Harbor Marine, bought a second boat for their $600,000 company, which runs dolphin- and whale-watching excursions out of Cape May, N.J. They expected to get it in the water by August, and booked enough trips for two boats in early September. But the Spirit of Cape May needed a lot more work than they'd realized. Canceling some of those group trips would have meant losing about $50,000 in sales—not a good option for a company that earns half its annual revenues between Memorial Day and Labor Day. So the four-person company ran three trips a day in September on its one boat, rather than the usual two. "It was tiring," Stewart says. "But when you see an opportunity, you gotta do it."

No entrepreneur can afford to let business slip away. And that's even more important for seasonal business owners. Whether you are running an inn in a tourist town where vacationers disappear several months a year, operating a quarry with a brief mining season, or distributing produce that is harvested during just a few months, extensive planning and execution are are crucial to protecting your cash flow. "A seasonal business is infinitely more difficult to manage than most other businesses," says Les Charm, who teaches entrepreneurial finance as an adjunct professor at Babson College. "You have short time periods to make very critical decisions."