EOY finalist discusses how seasonality affects her business

Seasonal entrepreneurs rely on the cyclical nature of their business and are therefore required to be considerably future orientated when making managerial decisions. This can be very challenging and requires careful planning and an in depth understanding of one’s business environment.

Anthea Ambursley, General Manager of Anansi Business Enterprises T/A Anansi Heights guest house, is a seasonal entrepreneur and was also a finalist in the 2012 Sanlam / Business Partners Entrepreneur of the Year® competition. As an entrepreneur operating in the local tourism and hospitality sector she is greatly affected by the cyclical nature of her industry, and indicates that 80% of her turnover is generated during seasonal peaks. “It is therefore imperative that we actively take seasonality into account when managing the business.”

She says that the seasonal nature of the hospitality industry has a strong influence in the strategic management of her business. “Operating in a seasonal business cycle requires an efficient model that relies on accuracy and precision. One has to be extremely accurate in calculating monthly overheads, restructuring targets and most importantly, cash flow management.”

Seasonality also affects decisions regarding capital investments, which is not exclusive to human capital. “Employing staff is a very important issue that requires careful consideration. Hiring temporary workers during peak periods is largely preferable in this industry to maximise the favourable peaks in the business cycle, without incurring losses during the troughs, and avoids having to fire permanent staff members.”

However, Ambursley stresses that it also of utmost importance to account for changes in the business cycle that are a direct result of changing economic conditions. “Operating in a seasonal business educates one how to handle fluctuations in the economic climate. It is important to note that good fortunes may be a direct result of a prevailing economic or sector-specific tailwind and that tougher times may potentially lie ahead.”