How do I manage the seasonal income in my education business?

How do I manage the seasonal income in my education business?

The travel industry is not the only industry that has to cope with business being seasonal. Education business is also seasonal, and this can be quite shocking to some education business owners.

Schools work in a very prescribed cycle and this affects the income of education businesses. Business can be booming in September and by June and July the money will have stopped coming in. This is true whether you are selling to schools, teachers or both. This can make education business owners feel insecure with their business, so it’s important to get a grip on the situation. Knowing your customers is key to this; when they’re ready to buy and when they’re not.

Is having an education business always going to be seasonal?

In short, yes. This is something you will have to accept. It’s just how education business works, some months you will have high sales potential and some you won’t. The key is how you manage these seasonal highs and how you manage the money you make from them. You must take advantage of these high sales periods, if you don’t there is no time to make up for it. Schools and teachers are ready to buy at these times – don’t miss this window!

What should I focus on in order to make the most of seasonal income?

You can’t do it all at once! But you can take advantage of the seasonality. Sit down and work out when the big events are that you need to factor into your sales strategy, work out when the highs and lows are for your particular business. This will help you to see when you should focus on sales, focus on improving or introducing a new product, or focus on marketing.

Is there something I can do to help manage the money?

Back in the day, I was frightened to employ people as I was so anxious I wouldn’t be able to afford to pay them because of the seasonality of education business. We started to employ people back in 2017, but our system of driving sales and then saving every penny was not a great system. Ed and I were not getting paid – so I knew we needed to get a grip on what it meant to have a seasonal business.

We started using a percentage model. So rather than stock-piling ALL the money to make sure we could pay the wages and the other expenses that come when you employ people, we started dividing the income each month into different ‘pots’. A percentage of the income went into taxes, some into salaries, some into other expenses and some into owners’ comp (what me and Ed get paid).   

Those are just some of my thoughts on managing seasonal income. But if you want a more comprehensive guide, my latest module is all about managing the seasonality of education business and making the cycles work for you and your business. Find out more here: https://www.educationbusinessclub.co.uk/club

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