Avoiding a seasonal cash flow nightmare

27th October, 2017

Dealing with ‘lumpy’ cash flow isn’t just spooky – it can be downright ghastly if you’re not prepared.

As boys and girls of all ages prepare to let their hair down with a spot of frightful frivolity this weekend, spare a thought for those who work day and night to make sure people’s Halloween parties go off without a hitch.

Mary Gurry has been a costumer for decades and runs Brunswick costume shop Centre Stage Costumes. She’s spent weeks helping customers make sure their costumes are a smash hit.

Gurry’s business faces a ‘perfect storm’ of customer demand every October, with Oktoberfest and Year 12 muck-up day also falling within the month.

“People come in and they ask me ‘so what are you going to do for Halloween?’. I think to myself, ‘I think I’m just going to recover’,” Gurry told The Pulse.

“When that door shuts at six or seven o’clock and it’s done, we just collapse in a heap.”

She said October represents about 20 to 25 percent of the business’ annual revenue.

“Halloween is absolutely crucial to us, because there are months where we go backwards. Halloween pays for those,” said Gurry.

In fact, during January she said the shop operates on reduced hours to limit overhead during what is traditionally a lean period.

But that means Gurry has had to become an expert at making the most of October activity – as well as at making it level out over the year.

READ: How to manage cash flow in a seasonal business

Dealing with demand

Gurry said the first solution to dealing with increased customer numbers during October was to bring on additional staff for the period.

She also said smart ordering was key to maximising the shop’s return during the period.

“We stock quadruple amounts of blood and Dracula teeth, special effects kits, and other high-demand items,” said Gurry.

By drawing on her experience to stock items she knows to be popular, the business gets the maximum value out of the holiday instead of running out of key items.

She also said product solutions such as a zombie makeup kit had saved her time during the October crush.

Gurry said she first came up with the idea when people started coming in seeking advice on how to become a zombie for Zombie Shuffle.

“I would end up spending 10 minutes with every customer…eventually it was just too time-consuming to talk to each customer for that long,” she said.

“So I just wrote three pages of notes and put them in a box with the makeup.”

The time she saves on having to take each individual customer through what they need to become a zombie and how to apply the makeup can be spent tending to other customers’ needs.

READ: Six steps for dealing with the Christmas Crush

Adapting a business to change

While Halloween has become a major source of revenue for Gurry’s business, it’s a business that’s been disrupted by the internet.

Gurry has charted the rise of Halloween, as well as chronicled the effect the internet has had on the industry.

“Back in 1990–95, there were probably 30 to 35 costume stores in Melbourne. Now, you can count bricks-and-mortar costume stores on one hand,” she said.

“With the internet, people can go and buy costumes for 40 dollars, and they can get it by tomorrow.”

But she said she had plenty of customers coming in after finding out the costume they ordered online either didn’t fit, or they needed accessories to make the costume work.

She also said the internet had allowed her tap into unique product lines to offer the business a point of difference during Halloween.

“We try to get stuff that we know is really popular and hard to get. That the customer won’t find easily, so when they walk in our shop they go ‘wow!’,” said Gurry.

“I can seek out really interesting items from all over the world and get them in, rather than lots of cheap stuff.

Gurry said she was able to position her store as a place where you can get stuff you simply can’t get elsewhere.

That gives her store a better chance at standing out during a busy period rather than competing with discount stores and online retailers on price.

By focusing on staff, product and differentiation, Gurry is able to make it through the perfect October storm with her sanity intact.