Seasonal sales: opportunity or problem?

Feature Article- Thu., Jul. 14, 2011
- Contributed Photo

For seasonal businesses, those furious months of activity are the difference between profit and loss, keeping the doors open or closing them altogether. Therefore, it’s critical to carefully plan your operations ahead of time, so you can take maximum advantage of your opportunities before they are gone, just like the changing seasons.

Failing to plan well could cost you more than just increased sales. The same day-to-day risks every owner faces are amplified during the crush of your busy season. The pace quickens with new and more customer demands for products or services. New, inexperienced workers may need to be added. Investment in new capital expenditures has the potential to blow out budgets. Your business will be under the spotlight, and as mistakes will be magnified in the eyes of current and potential customers, you need to have a smart plan for the business to succeed.

Hire and train workers carefully

The workers you hire are agents of your business, and the business is responsible and liable for any actions they take while on the job. So you must not take any shortcuts in the hiring process, in order to protect yourself from charges of negligent hiring. Do background checks as required; investigate references and past work experiences.

If a customer, vendor or another employee files suit against your business because of the actions of a worker, you will need to show that you took every reasonable step to prevent a bad hire. Save all paperwork from the hiring process to show you did your due diligence.

In addition, be sure to formally train all workers in company procedures, especially the new or temporary ones, to avoid accidents and incidents in the first place. Documenting these procedures will protect you against charges of negligent training, should something go wrong. Finally, terminate workers at the first signs of trouble, because keeping them around only opens up the business to more liability later.

It’s important to document your purchases, train accordingly, limit accessibility (especially among more temporary workers), and be on the lookout for fraud. Be sure to update your insurance policies for any expansions.

Incorporate to limit business and personal liability

Even if you take your time during the off-season and carefully plan your operations to avoid workplace dangers, you can’t anticipate everything that could damage the business. However, establishing a formal business entity with state authorities comes with enhanced limited liability protections backed by law that are difficult to secure elsewhere.

“Incorporating your business into a formal entity, like a C Corporation or forming a limited liability company (LLC) means the company is a separate legal entity responsible for its own debts resulting from business activity,” says Karen Kobelski, general manager of BizFilings.  “You, as a business owner, are only responsible up to the amount you have invested in the company (and no more). All of your personal assets are secure and shielded from business creditors.”

Take steps now, reap benefits later

While the busy season may come and go rather quickly, problems occurring during this period have the potential to leave a permanent mark on your business. Assessing newly-emerging risks and planning for contingencies will help the busy season go more smoothly, and make the off-season more enjoyable.

Courtesy of ARA Content


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