Tips for managing through peaks and troughs

Content Summary

How to manage effectively through peaks and troughs

  • Know when your business is likely to grow and slow. Regularly analyse sales data and customer flows over different periods to understand when these peaks and troughs occur.
  • Be flexible with your staffing arrangements. When you've identified customer flows, you can match staff numbers and skills to those predictions. Make sure your employees are qualified for their role and properly trained in the service standards you expect.
  • Use cash-flow forecasts to ensure you have adequate cash buffers and available funding to cover business operations through non-peak periods. This funding should include fixed commitments, such as rent and loan repayments. 
  • Have working capital funding facilities in place, such as a line of credit or an overdraft, that you can access to help fund your business when you need it.
  • Carry the right amount of stock. Excess stock comes at a cost to your business: insurance, storage and spoilage are all impacted when you have surplus stock. Consider negotiating with suppliers so they deliver stock when you need it. You could also reduce the minimum volume of stock you have before replenishing.
  • Consider reducing excess capacity in off-peak periods by changing staff rosters, selling excess assets, outsourcing non-core activities, using short-term leasing or sub-leasing out assets or premises. 
  • Consider charging a premium during peak periods or early in a product's lifecycle. Outside those times, your pricing strategy could include bundling products or services or reducing prices. 
  • Look for opportunities to expand your business in line with your strategic direction and with proper funding. Mitigate the fluctuations in your income by expanding into areas less impacted by peaks and troughs. Expansion plans could include new locations or increasing products and service offerings to include those less impacted by fluctuations. 
  • Take a holiday. In spite of your best efforts, you may lose money staying open in slow periods. If you do close for a holiday, you might consider leasing or sub-leasing your premises or assets to another business.