The Myth of Seasonal Businesses
No matter the time of year, many potential franchise owners have questions about seasonal businesses. Can they still be profitable? How do I know if a “seasonal” business is right for me? In this article, we are going to discuss some businesses that may have some seasonality to them, and we are going to cover the seasonality myth that many people have heard.
The Seasonality Myth
What does having a seasonal business look like from a franchise perspective? Well, if you live in Arizona or Florida, where it can be 90 degrees by the beginning of April, having a so-called seasonal business might not seem like an issue. But what if you are located in a more northern state where snowy winters might pose a threat to your bottom line? All of a sudden, a seasonal business does not sound so good.
The myth is this: If I have less time performing the service my business offers, I will earn less revenue. It seems like a pretty simple concept to grasp, right? But actually, that is rarely the case. How is that possible? Let us explain.
The Premium of the Outdoors
There are a few considerations to think about here. First off, in those northern states, there is a premium on being outside. Tim Parmeter, founder and CEO of FranCoach, likes to use this example about his own family:
“I grew up in Indiana, and my sister lives in northern Indiana. Her family has a pool, which they get to use a couple of months out of the year – even though they are ridiculously comfortable being in cold water in their pool, they still have a shorter period of time during which to use it. So, when they can get in there, they are very excited to get in there. In the South, we are more spoiled with the time we can be outside. In early April, we might have a weekend when we get temperatures in the 80s and 90s – and I’ll tell you right now, my ten-year-old will be thrilled to jump in our pool.”
In states like Indiana, there is a premium on being outside. The people who live there want to be able to take advantage of when there is good weather. And as anybody who is living in those areas knows, just because it is June does not mean the weather will always be perfect. It might suddenly be 60 and rainy one day – or there might be snow at the end of April or the beginning of May.
We just don’t know, and that is why there is a premium on outdoor time. When residents can be outside, they want everything to look good, and they want the ability to do everything outside that they want for themselves, for their friends, and for their families.
So what does this mean for franchise owners? It means that seasonal services tend to cost more in those areas than they do in the South.
Case Study: Pool Cleaning Franchises
To revisit Tim’s example of enjoying outdoor time in a pool, let’s investigate how much pool cleaning franchises charge in each area. A customer who lives in the Phoenix, Arizona, area might pay $85 per month for a pool service. But that number is going to be very different as you travel north.
A couple of former FranCoach clients own pool cleaning businesses, one in Detroit and one in Boston. What they can charge is much higher – sometimes it is over $300 per month to clean a customer’s pool. Why? Again, they need it spotless during that short-lived outdoor time, and there is more of a demand for pool cleaning during that peak season.
There is also often less competition in those areas. Plus, when it comes to pool cleaning in the North, you also have the opening and closing of the pool, which is quite a production and adds an additional service offering and revenue stream for your franchise business.
So, if you have a pool business (pool cleaning, repair, maintenance, etc.) in the North, what you find is typically this: Let’s say that you can make $1 million each a year in revenue, but you are only going to perform that service maybe eight months out of the year. The same pool franchise in Florida performing the service twelve months out of the year is going to make the exact same $1 million dollars in revenue.
What you need to ask yourself is… Are you okay with that?
Some people will say, “No, I want to perform the service year-round.” The rest of us are probably shaking our heads, saying “Of course, I’m fine with that.” Not everybody is and that is okay. Being fine with it is one thing, but it is important to realize that is actually the case in virtually every instance.
As another example, take one of the many landscaping franchises out there. The brand has some of its top owners located in the North. It even has some Canadian owners that refer to snow removal as part of landscaping – and those Canadian owners refer to snow as white gold.
There is a whole list of different franchises that are “seasonal” that perform outdoor services. Their northern owners do just as well (and sometimes even better, on average) than the southerners. All in all, there is more of a premium on being outdoors, people want to make sure they have a high-quality service, and they pay more for it because it is available for only a condensed time period. From a financial perspective, there is no downside.
What Do You Do in the “Off Season”?
You might be wondering… What do you do in those months when you are not performing the service? Maybe you will kick back and binge-watch some TV. You can definitely do that, but the real answer is that you still are out marketing and connecting.
You can spend your “downtime” building those referral sources so that next year continues to get even better from a financial standpoint – referrals mean less money spent on your marketing. You will probably still run sales calls to continue growing your client list.
The key point here is that you are still doing things. You are still marketing and you are still connecting. You are still running your sales appointments to book those jobs in advance. Come the summer months, it is not that you are not going to have any sales appointments or that you will not be building connections, but you are going to be in a better position to simply do the work. (And remember, it will likely not be you, but rather your team doing the work.)
The Flexibility of Seasonal Businesses
For many people, one of the biggest reasons – if not the biggest reason – that people look at franchise ownership is control. That means control over their lifestyle, their professional life, and their time. So what does that look like if you have a business for which you are not performing the service year-round? In short, it means more flexibility and more control.
What does that mean around the holidays? It means you have a little less hectic craziness in terms of what your business is doing and maybe more time for the family. Get out of the place where there is all of that snow and cold. Go to the beach. Go do something with your family, relax, chill, hang out – and enjoy that, because most people do not have the opportunity to do that when they are working in the corporate world, right?
Pursuing Your Growth Goals
There is another amazing aspect of seasonal business that we should also discuss. Now, this is not for everybody, but some folks have growth goals. We have talked about this numerous times. You might want one unit of a franchise, and that is going to allow you to hit your goals in terms of how much time you spend and how much money you make.
If that is what you want, that is perfect. If owning one unit means that you are hitting your goals and you are happy, that is great.
But what if you want even more control? Unlike in the corporate world, there is no ceiling on you being able to grow and expand.
You might have multiple brick-and-mortar locations. You might have multiple territories of that pool franchise. But what is the other way you can grow? Multiple brands.
Maybe you look at an opportunity for an alternate service during those winter months. For instance, many landscaping brands offer holiday lighting. Maybe you stack an entirely different franchise on top of your existing brand, where you can have some shared services with your staff.
Or maybe you have got an indoor service or something totally different that is running year-round. As a franchise owner, you have the ability to take time and look for alternate services or add additional businesses to your portfolio.
Those are some next-level growth examples. But again, if the #1 reason everybody is coming to us and looking to own a franchise is control, this is the way to make that happen.
At the end of the day, owning a “seasonal” franchise business offers numerous opportunities for flexibility, growth, and profits. Hopefully, this article has given you some more insight into how successful and adaptable these businesses can truly be.
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FranCoach is a national search firm dedicated to working with individuals who are interested in owning a franchise. We've partnered with over 600 of the top franchisors in the country, spanning nearly 70 industries.
Our number one goal with our clients is to help them find the absolute best franchise for them to own. Our goal with our Franchising 101 podcast series and this series of informational articles is to help educate people on all aspects of franchise ownership.
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