If there is one thing that anyone in construction knows, seasonality and business go hand-in-hand. It’s a reality that everyone faces, regardless of where your business is located. The amount of impact the changing seasons can have on your business can vary greatly depending on factors like your specialty, your offerings, your staff and more, most contractors must account for seasonal trends in their markets.
Know How The Seasons Affect Construction Timing
So, how do you account for seasonal trends? It starts with knowing—or having a rough idea, at least—about what the weather is like in your area. Since I’m in North Carolina, let’s use my market as an example. As a roofer, I predominantly work outside, so that’s the first thing I need to acknowledge. We don’t do any interior work, so the temperature and weather are big factors that can inhibit me from working. I can’t rip a roof off if there’s a chance of rain in the forecast. This might be different if I was a builder, since I might be able to schedule my interior items during the winter months, keeping productivity up.
Our winters in North Carolina are mild but they do exist, so while I don’t slow down my operation to a complete halt, I do anticipate things will slow down in January and February. Even if we have a big storm that causes a bunch of roof leaks, we might not be able to even complete the repairs or replacements during these months because of the weather. So my “winter” is slower for me.
Things start to pick up in March and April because it rains more here in those months and when it rains, people discover leaks. Homeowners also start working to get their house “summer ready” and may call to get those winter repairs, maintenance items or other miscellaneous things crossed off of their lists.
May through September is our prime season. The weather is usually pretty consistent, temperatures are workable and we get longer days. October and November ramp down a little bit: usually we’re cleaning up the backlog, doing some more business planning, and the sales folks are slowing down as the year end comes around. December is a slow month, usually because it’s colder, and as we get close to the holidays, people stop spending money (unless they need to).
Make A Plan For The Seasons
So now that I have a rough idea of what my seasons and year look like, how do I make that information useful? As I’ve mentioned, in November or December I start to do my annual planning for sales targets, staffing, and budget. I build projections from historical data and trends. When I start looking at these factors that affect my sales and output, I break each month down to a percentage that it represents of my annual sales. For example, let’s say I plan to sell $5M in 2021. The breakdown may look something like this:
|Month||Percent of Sales||Revenue|
All of your percentages should add up to 100% and your numbers should add up to your sales total. You can do the same thing with transactions if you know how much your average transaction is. For example, my average transaction is $14,000. So in January, $200,000 divided by $14,000 means I anticipate selling 14 to 15 jobs in January.
Unique Factors That Affect Seasonal Work
This plan establishes the baseline and gives you a decent place to start. The last thing you need to do is account for “factors.” Factors are the unique situations you need to account for but that you can’t rely on, such as winter storms, hurricanes, material shortages, COVID, etc. Of course, some of these are easier to account for than others.
For example, in North Carolina, we are in the Atlantic Hurricane season from June 1 through November 30. When I look at my baseline of percentages in sales, that matches up with the heart of that season, so I have that accounted for based on my trends already. But a factor we couldn’t plan for was COVID in March of 2020, so we took a hit. However, for our planning this year, we built in factors that accounted for restrictions, more reserved customers, slightly lower customer counts, and all the affects on business we learned from the pandemic.
Your numbers and circumstances may be very different than this, but I hoped to demonstrate a very simple way to account for seasonality in your business. We are available at AJCEO to help you with business planning, building your projections, and even to help generate your monthly trackers and results scorecards. This can help keep you on track and get you the data you need to make your business as successful as possible regardless of the season.