Mechel is a father of 7 who is still learning in kollel. His wife Rivi works as a part-time nurse, but her salary is far from sufficient to support the family. For the past 3 years, Mechel opened a small home goods store in a resort which is an enormous help in covering the family budget. But Mechel is always stressed wondering whether his revenues would be sufficient to not only cover his expenses but the extra money he needs for rent, tuition, and day camps.
The experts say that the biggest benefit of having a seasonal business is that one does not have to work year-round. It is possible to take several weeks or months off without being burdened by the constant pressures of running a business. Mechel was able to learn in kolel most of the year and yet find a location that rented out a small store for the summer season only meaning that he did not have to rent the store for the full year. Perhaps the only disadvantage is that he could not vacation with his family like some of his colleagues.
A good percentage of American businesses can be classified as seasonal businesses. At this time of the year, it is common to see many pop-up food stores in resort areas and stadiums. Places like the Catskills are full of seasonal stores, albeit increasingly many of the stores stay open year-round to cater to the growing number of people who are making the Catskills their full-time home.
Many of the seasonal stores have a “feed” from a year-round store, meaning they can always transport goods from that store to the seasonal location and the same in reverse when the season ends. These stores are either theirs or somehow connected to them. There are a few rules for seasonal businesses which are important to follow. The first is to keep the overhead low. The second would be to somehow maintain contact with an existing customer base to the extent that a database is kept from year to year. Marketing should take place 2-3 months before the seasonable business opens. It is often good to team up with another seasonal business to share in the marketing costs.
As a general rule of thumb, it is recommended that businesses have at least three to six months’ worth of cash on hand to cover operating expenses if possible, though it is important that the business can afford whatever amount is set aside. According to the SBA, failure rates for seasonal businesses are on par with year-round businesses. Much like teachers’ salaries, seasonal businesses have to spread their income across an entire year. Many teachers, for example, take on summer jobs. A landscaping business flush with cash through the spring and summer months must weigh that against the relatively barren fall and winter months unless they also do snow removal.
Seasonal businesses not only have ups and downs in terms of sales and revenue, but also in terms of expenses. Because these businesses have specific busy seasons and demands, they also have specific periods when they are preparing for an influx of business — that translates to money spent on inventory, staffing, and more. A summer seasonal business must have money set aside to get the business up and running even before the first dollar comes in.
While no business wants to imagine the worst happening — a natural disaster, a break-in, health crises — seasonal businesses are particularly vulnerable to disasters. Fires have often disrupted businesses in the Catskills, for example. FEMA reports that 40 percent of businesses aren’t even able to reopen after a disaster.
A seasonal business’s budget must be drafted with these contingencies in mind, as well as an emergency fund. Most business finance managers recommend having three months’ worth of business expenses set aside for an emergency fund, with one month’s worth being the absolute minimum. This gives a seasonal business a cushion to figure out how to execute Plan B, as would a line of credit. This emergency fund should have strict criteria to establish its use, so it does not become another discretionary fund.
When I think of seasonable businesses I often think of the people who sell at farmers markets who are a diverse crowd. They remind me very much of the age-old peddlers who would travel from town to town to sell their wares. But it is not only their products that distinguish them. They have varied reasons for being there in the first place, different ways of reaching customers—and different ways of turning a profit.
For some, farmers markets are a way to try out new products and get customer feedback without having to spend a lot or to sell a big bumper crop or surplus, says David K. O’Neil, an international market consultant based in Philadelphia. “Selling at markets is a great way to meet people in the community. It is also a good way to learn business skills for younger people or new immigrants. Plus, you get paid on the spot, so you do not have to wait.”
The most recent U.S. Department of Agriculture survey estimated that there were 8,140 farmers markets in the U.S. in 2019. Farmers markets are particularly popular in California, which has the most of any state, with 660 certified by the state’s county agricultural commissioners. Many of those were forced to close or scale back during the pandemic, says Jay Van Rein, spokesperson for the California Department of Food and Agriculture, “but have rebounded significantly.”
When the pandemic hit, Trevor Adams was torn. He wanted to keep his baking job in San Francisco, but a congenital heart condition, combined with the bakery’s tight working quarters, made it impossible to feel safe. When Night Heron Bread—named after a local bird—finally made it to market last year, Mr. and Ms. Adams were not thinking much about the placement of their tent. “We were newbies at the market, didn’t want to make waves, and followed the instructions of the market manager,” said Ms. Adams.
But they lucked out. A prime spot at the corner of Haight and Webster, one of the busiest commercial streets in Alameda, California, opened. The space was usually filled, but a vendor did not show up that week, so Night Heron got a shot—and ended up becoming a fixture there. “I think because we are Alameda locals and the manager knew that he thought the corner was a good spot,” says Ms. Adams. “He told us that people started arriving at the market to ask where we were, so perhaps it was convenient to put us in a prominent location.”
On days with good weather, they load up 125 loaves of bread to sell at $10 to $13 each, plus 50 baguettes at $5 and flatbreads, pastries, cookies, and jars of jam. Revenue from a Saturday market was usually between $1,600 and $1,800; expenses ran around $400 to $500, including a fee to the market itself that can total up to about $75. That leaves about $1,200 profit per market, according to Ms. Adams.
Our community has its own Almedas particularly in the Catskills in the summer. Many of the stores have been there for decades; others more recent. We, of course, have our Matzoh bakeries, esrogim stores and other Yom Tov pop ups. Seasonal businesses are not new in our community and should definitely be an option for parnassah like Mechel if planned properly.