Do you think about starting a seasonal business? It can be difficult to operate for only a portion of the year. Learn how to start a seasonal business now and prepare for the challenges of your first season.
How to start a seasonal business
A seasonal business is very similar to a full-time startup. However, there are unique challenges that you will have to overcome as you start your business. Here are five steps to help you start a seasonal business.
Step 1: Select a business structure
Different business structures will require different ways to keep records and pay taxes. You will have different tax obligations depending on the structure you choose.
If you own a business, it is automatically a sole proprietorship. Sole proprietorships have their pros and cons. This structure is simple and low-cost, so you and your business can be one entity. Your personal assets could be at risk if your company takes on debt that it is unable to pay.
A partnership is a way to have multiple owners for your business. You and your partners, just like sole proprietors are one entity. Both you and your partners are responsible for any business debt.
It is possible to incorporate your seasonal business. The incorporation of a business is more costly than other structures, and it has more rules for your accounting software. However, your personal assets and company assets are protected because you are independent entities.
An LLC (limited liability company) can also be formed. An LLC is a combination of the characteristics of a corporation, a sole proprietorship, or a partnership. Separate business and personal liabilities exist. The tax on the pass-through entity passes through the owners to the company.
To determine which structure is best for your seasonal business, take a look at each one. Before making a decision, you might want to consult an accountant.
Step 2: Register your business
Register your business name with the secretary of state if your business name isn’t your own. You must make sure that the name is different from all others in the state.
Let’s assume your name is Joe Smith, and that you would like to open Joe’s Tree Service. The company name must be different from your own name. You need to ensure that it isn’t already registered and verify its availability.
A DBA name allows you to operate under another name than your legal business. What is a DBA name? DBA stands for “doing business under” and refers to a fictitious business name under which the business chooses not to operate.
Register for the necessary permits and licenses. The licenses and permits that you require will depend on your industry and whereabouts. A temporary business license is available. You can also get a permanent license that is good for the whole year.
Step 3: Develop a business plan
A small business plan can help you organize your thoughts, tasks, strategies, and ideas. Prepare a plan before you begin your seasonal business.
Begin by planning where the seasonal business will be run. Is it possible to run your business online? Do you still need to have a physical address? You could also share space with other businesses that operate during different seasons if you have the need.
Add a budget to your business plan. Your available funds can change as a seasonal business. A budget is a tool to manage and project your cash flow. Build a budget around your projected revenue and expenses. Also determine your initial funding sources, and how you intend to spend the startup capital.
Step 4: Market your business
Market analysis is a great way to decide how you market your seasonal business. To determine which products and services are most profitable, conduct a market analysis. Collect data from local and state commerce websites, interviews, and competitor information.
After you have done a market analysis, market your business using the results. Seasonal businesses have a limited window of opportunity to make profits. Potential customers need to be aware of your company before the window opens. Avoid a slow start by marketing before the season starts.
Also read: How to Successfully Market Your Business
Step 5: Hiring employees
Are you looking for workers to help your seasonal business? It is crucial to find qualified employees when starting a seasonal business. Because you only make money part of the year and not all, every sale is important. Hiring employees who offer exceptional customer service, have efficient work habits, and are reliable.
You must comply with all applicable employment laws. Know your state and federal employment regulations as well as payroll taxes. Payroll software allows you to record payrolls and pay employees. Software programs can file and deposit payroll taxes on your behalf.
You need to keep track of your business’s transactions, regardless of whether you are operating year-round or seasonally. Patriot’s online accounting software makes it easy to keep track of your books. Our simple program is easy to use and offers free support. Get it today for free!