“Back to school. Back to school to prove to Dad that I’m not a fool. I got my lunch packed up, my boots tied tight, I hope I don’t get in a fight…” – Billy Madison

As we enter the end of observed summer (yes, summer actually ends September 22 this year, but as everyone in Michigan knows, summer “ends” the Tuesday following Labor Day), and the kids go back to school, many business owners enter a period of transition.

In Northern Michigan, where your writer resides, the prime hospitality season is winding down, and many in the industry will use the next few months to gather themselves and look at planning for 2025. As the resorts, hotels, and Airbnb slow down, many other seasonal businesses are looking at their big fall push. Landscaping companies, for example, begin to see a significant push in fall clean-up and post-summer projects. Anyone with a boat knows this is the time of year to pay for winterization and eventual storage. The seasonality for many small businesses creates a mini boom-bust cycle that they navigate each year.

Many business owners are looking at what options are available, including scaling back the business during the offseason, like seasonal layoffs, reduced hours, or even shutting the doors until the offseason ends. Each carries its own risks, from employee retention issues to frustrating customers if closed. Businesses can also look at offering a new product line or service that can help keep cash coming in during the off-season. Again, looking at landscaping companies, many offer snow removal services during their offseason. Developing a new customer base for a product or service can be beneficial, but sometimes, the juice isn’t always worth the squeeze. Another strategy would be to open a seasonal line of credit. This would allow the business to take draws on the credit line with the intent to pay it back during its next peak season. However, the biggest pitfall to this is having a down peak season coupled with having interest payments.

Sometimes, navigation looks like the parable of The Ant and the Grasshopper. The Grasshopper plays all summer with no thought for the future, while the Ant puts work ahead of play and is prepared for the winter. Not all seasonal businesses can put enough away to make it through their own season, however.

Navigating the options available to a small business owner can seem challenging, but just like Billy, we’ll tie our boots tight and help educate the business owners in our community on what they can do.

Announcing recent closings:

  • $303,750 for the purchase and rehab of an investment property
  • $1,125,000 to begin financing a workforce housing development
  • $25,000 as a line of credit to help a professional office expand

Saving our members' money!

Recently, we worked with a borrower looking to expand their business. Their main company was looking at buying the assets of a business in which there was immediate synergy. The asset purchase was financed using a small-term loan. However, the bottom line for the business owner immediately increased by over $40,000/year as a result of financing the asset purchase.

*This content is for informational purposes only. Conduct your own due diligence or consult a licensed professional before making any and all financial decisions.