Running a Successful Beachfront Business

While many businesses tend to ebb and flow into different seasons, businesses like a beachfront business, a ski school, or summer camp tend to have a defined season when they are open and doing business and then subsequently close. Owning a seasonal business that isn’t operational all year long requires a business owner to be skilled at budgeting, great at hiring and training people, and adept at managing the financial implications of fluctuating cash flow.

While there are challenges associated with owning this type of business, there are also some advantages. Because employees are hired for the season and end their employment when business is done for the year, there’s no need to make payroll all year long. Nevertheless, that doesn’t mean the need for cash flow entirely disappears, so these business owners know they need to manage their revenues to meet their financial obligations (including paying themselves) throughout the year.

I have a friend who guides at a fishing lodge in Alaska that is only open four months of the year. The lodge generates their annual income during that time and all their staff and employees go to Alaska for the season: and return to wherever they’re from to do something else for the remainder of the year. With the exception of the owners, who take reservations for the next season, maintain their website, and prepare for the next year, my friend says nobody else is paid during this time, but he likes his arrangement. He makes enough income to support himself throughout the year and is able to pursue other opportunities on the other side of the season. For example, he runs a snowmobile touring business in what Alaskan’s call “The Lower 48” during the winter here. It works for him.

There are some unique and specific things you need to consider, and some skills you can’t do without, if you’re going to run a beachfront business. Here are six of them:

You have to hire the right people: Even though there can be challenges associated with hiring seasonal employees, you still need to make sure you hire the right people. I learned a long time ago that you shouldn’t simply hire the best of who shows up to interview; you need to make sure you hire the right people for the job. This can be particularly challenging when the economy is generally strong, unemployment is low, and seasonal jobs are harder to fill.

That being said, my fishing guide friend is a good example of a highly skilled employee who returns season after season. Like the lodge owner, he makes enough during the season to keep the wolves at bay the rest of the year, there is a great atmosphere at the lodge for he and the other guides, and the tips are good. This might not apply directly to a beachfront store, but there are likely things you can do to keep the right seasonal employees interested in returning for more than one season—which will make it easier for your business.

In other words, make sure you ask for references, do background checks, and thoroughly vet every potential employee to make sure you’re getting the best employees you possibly can. And, unless they will make incredible employees, avoid the temptation to hire family members or friends simply because you know them and they need a job.

Training employees is still critically important: Although your seasonal employees will only be working a few months out of the year, that doesn’t mean you can scrimp on training. In fact, if you’re hiring new employees every year, proper training might even be more important if you don’t have a lot of employees that return season after season. You may even want to consider a formal training program that every employee must complete before you set them loose on your customers each year.

Use your down time wisely: Even though the business is closed and your employees are gone for the year, that doesn’t mean there isn’t work you can do to wrap up the season that just ended, ramp up for the upcoming season, or make improvements for next year. Many small business owners take on the role of chief cook and bottle washer, but this is particularly true for business owners who close their businesses for the season and take on all the day-to-day responsibilities of managing all the things that still need to take place during the off season. This could include things like keeping up on building maintenance, ordering inventory for next season, hiring new employees, answering the phones, responding to emails, or anything else that still needs to happen even when customers aren’t in the store. The store may not require your full-time attention any longer, but that doesn’t mean you can waste any of the down time. I have a friend who earns his living operating a haunted house, which is only open for a couple of months every year, but requires attention all year long to be ready for the next season. At least, he seems to always be busy doing something to get ready for next year—whether it’s working with contractors doing maintenance on his space, making improvements in the haunted house, or hiring and training employees in preparation for the upcoming two months of his season.

Think local: As you stock inventory for your store, it’s common for example, for a beachfront store to stock things like sunscreen, sunglasses, beachwear, and beach towels. Choosing locally made products to sell in your store might be a good way to set your business apart while supporting local producers who will then likely support your business. When I’m on the road, I’m always more interested in something less generic and widely available; and am often looking for something from the region I’m visiting. Take a lesson from the Harley-Davidson motorcycle dealers all across the country who probably generate as much revenue selling t-shirts that feature their dealerships and the areas they are in as they do selling motorcycles.

Additionally, as you consider your inventory needs for the season, don’t succumb to the temptation to keep this year’s leftover inventory for next year. Even merchandise you believe “never gets old” does, so putting last year’s inventory on the shelf this year might not be the best use of space. Make sure you’re maximizing the value of all your shelf space with the most current and saleable merchandise.

Make hay while it’s time to make hay: In other words, although it might be a good idea to try to generate additional income during the off season (and many seasonal businesses work to do that), it could be an even better idea to consider ways to boost your revenues when customers are in your store and ready to buy. Are there complementary items you don’t currently stock that you could offer to boost sales, would staying open an extra hour increase revenue, or would hiring an additional employee enable you to serve more customers and make the cash register ring a few more times each day?

I’ve always been of the opinion that there were really only three ways to increase sales revenue: increase the number or customers you serve, get the customers you have to purchase more, or some combination of the two. The number of customers visiting your beachfront store can fluctuate with conditions sometimes out of your control, but it is possible to offer additional products to get those customers you have now to spend more. My Grandpa’s advice to make hay while it’s time to make hay is good advice to a seasonal business like a beachfront store.

You may also consider investing in pre-season marketing to encourage potential customers to visit your store. It may also be a good idea to look at other beachfront stores in your area that offer complementary products and co-op your advertising dollars to encourage their customers to visit you and your customers to visit them. By sharing advertising expenses and leveraging each other’s traffic, it could be a good investment for both of your businesses.

Don’t neglect your credit profiles: I’m talking about your business credit profile as well as your personal credit score. Both have an impact when your business is being evaluate for a potential small business loan. Most people have a pretty good understanding about how their personal credit score works, but are less familiar with their business credit profile.

For most small business owners, the need to maintain a good personal credit score will likely never go away, even though your business credit profile is probably a better indication of how your business meets its business credit obligations. The best way to start positively impacting your business profile is to regularly review where you are. All the major credit bureaus will give you access to your profile (sometimes for a small fee). What’s more, looking at your profile every month is not too frequent and since we tend to impact the information we pay the most attention to, business owners who are regularly reviewing their business credit profiles tend to see regular improvement.

Seasonal businesses sometimes rely on borrowed capital to help them bridge from one season to the next, so a strong credit profile becomes very important should your business need a little extra capital. While it may not be a guarantee you’ll get the financing you’re looking for, it will give you more options as you look for a small business loan.

Have I missed anything? If you run a seasonal business like a beachfront store, a ski shop, a summer camp, or other similar business, what is some of the advice you’ve discovered that helps you be profitable year after year?

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