Risks of Operating a Seasonal Business

A seasonal business is one that is only open during certain times of the year. This may be a small ice cream shop only open during the summer, a Halloween costume shop opened in October, or a ski shop selling snowboarding and skiing equipment in the winter. Whatever the business is, it is important to understand the risks. Many of your risks are similar to other businesses, but most have to do with the fact that you are not running your business year-round.

Financial Risks

The first type of risk when owning and operating a seasonal business is financial risk. Since you may only open 1-3 months out of the year, you will have to make a year’s worth of money in that short period of time. Some businesses conduct related business for the rest of the year, but focus on their primary business during the hot season. For example, if you have a Christmas tree lot near the holidays, you can grow something else or contract with another vendor the rest of the year. Either way, you need to be aware of the financial risks and implications of losing or not earning money for the remainder of the calendar year. It takes extra planning, not to mention the risk of not making enough money in comparison to businesses that have more time to make it up more easily.


Next, you tend to have more competition with a seasonal business that other businesses. While traditional businesses have competition year-round, you rely on every sale when you’re open. This makes it that much more important to get ahead of your competition and gain an edge. In October, there may only be a few costume shops open, but the competition is fierce if you’re selling relatively the same thing.

Advertising and Marketing

Due to the competition and financial factors, you need to pay close attention to your advertising. The marketing itself is a risk because if you invest a lot in it, it is only worth it for the short period of time when you are in business. Be creative with your marketing and keep up with advertising year-round, not just during the season you are open. About 3 months before the season starts, become more serious about your marketing methods.

The Off Season

If you don’t do any sort of side business the rest of the year, your off season may potentially be difficult. One of your primary risks is not earning business or income for the rest of the year. It is important to budget your business income during the busy season so that you have enough to stay afloat during the off seasons. Another option is to think of a way to keep your business open the rest of the year. If you have a retail store where you specialize in unique Christmas décor, consider stocking the shelves with other décor the rest of the year.

Hiring Seasonal Employees

Your employees become a risk because most aren’t going to be willing to not work nine months out of the year, and keep returning. This means you’re generally hiring new seasonal employees every year. It can be hard especially when you are trying to choose employees and managers, train them and make sure they are ready for the season.

While you can still do very well owning and operating a seasonal business, you should also protect your business from risks with business insurance. General liability, crime insurance and workers’ compensation will help prevent loss of business income.