From retailers that make the lion’s share of their sales in November and December, to leisure and tourism companies that prosper in the summer months, seasonality is a fact of life for firms in many sectors.

But while turnover and profitability might be healthy on an annual basis, such businesses can face serious – and, in some cases, fatal – cash-flow problems during off-peak periods.

We’ve talked to accountants and business-planning experts to find out what steps firms can take to deal with seasonal revenue fluctuations.

In many businesses, management’s involvement in day-to-day operations means they do not have a lot of opportunity to step back and think strategically about the future direction of the company.

For seasonal firms, this is not the case, says Dominic Shaw, director of accountant Aston Shaw.

“If you’re in an off-peak period, try to plan ahead for those peak periods,” he explains. “That might be looking at the resources you’re using and how they might best be best utilised.

“Use this time also to set your direction for the future, for example by looking at different opportunities – if you can do that, you can manage your way through the rollercoaster ride that a lot of business owners find themselves on.”

John Buchanan, performance senior manager at accountant HW Fisher, says that forecasting is especially important for firms with seasonal revenue variations.

“It is vital to forecast your financing requirements in order to ascertain your likely needs and how your business model might be tweaked in order to maximise the available cash,” he says.

“Cash budgeting is a particularly good area to look at; you should understand when you are going to need additional staff or funds to buy stock.”

Shaw adds: “If you need finance, banks will want to see forecasts of where you think you are going to be, what your commitments are and where you are going to spend your money.”

Marco Soares, a business coach at MarcoSoares.co.uk, says in some cases he advises clients to create a 12-month cash-flow forecast broken down week by week. “This way you can identify when and how big your cash gap is – which is important information.”

If you do need some form of finance to smooth out cash-flow fluctuations, the most suitable type will depend on how your business operates, Buchanan says.

“So for large businesses, you could have mix of overdrafts, term loans, and asset-based finance such as leasing vehicles or plant and machinery. If you are seeing a large build-up of stock maybe stock finance is appropriate.”

He adds: “If you need vehicles, the advantage of asset-based finance is that you don’t need to have a large outlay to purchase them: you are going to be able to spread the payment.”

Businesses can also explore matching loan repayment terms with peak and off-peak periods, Buchanan says. “If you’re a seasonal business, you can agree a variation so you pay more based on when your turnover is going to be up. If you are a retailer, for example, you want to agree to lower repayments during August, September and October as that is when you are building your stock levels.”

Buchanan says: “The assets you require when you are busy might not be needed at all times, so it is useful to look at how that might be structured; for example, could you lease them rather than buy them?

“I know a building contractor that uses temporary fencing around their sites. Once they did their sums they found it was cheaper to buy the fencing rather than rent it, and then sell it for scrap after the work had been done.”

Shaw adds: “For most businesses, trying to recognise what the variable costs are and to keep them to a minimum is very important.”

One of the most significant variable costs companies face is wages, Buchanan says, and dealing with staffing levels is one of the biggest challenges for seasonal businesses.

“You’re going to need a core of skilled staff who work for you all year round, but for the busy periods you’re likely to need temporary or fixed-term contract staff,” he explains. “It’s particularly useful to take advice from an employment lawyer when putting these contracts together.”

Soares says that businesses could consider offering short-term work to people who might find it fits with their lifestyles, such as students or retired people looking to supplement their pensions.

A long-term solution to swings in cash flow is to make your business busy all year round.

Buchanan says: “Can you reduce the seasonality of your business through diversification? This means looking at additional products and services you could offer using your existing skill set that you could sell in that down period. “So if you make lawnmowers, say, you could switch to making snowblowers in winter using the same manufacturing skills. You don’t want something that makes your business significantly more complex, and you’re looking for something that you can employ your existing staff in.”

Soares says that “making hay while the sun shines” is another way of ensuring your business can survive through quiet periods. “Make sure you really maximise the good periods and have clear goals around how much is required to balance out the troughs,” he advises. “What is needed here is a combination of good sales and marketing activity, and maximising margins.”

Shaw adds: “During the peak periods, you need to put money away and plan for those off-peak periods. And leaving money in the business will also benefit its long-term health.”