Seasonal Revenue Is Crushing My Cash Flow (What Should I Do?)

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EntreLeadership 14 min 3 speakers 4 chapters transcribed 2 months ago
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What is the main topic discussed in this episode?

Dave Ramsey 0:05
A lot of business owners think they have a cash problem. Most of the time, it's an identity problem. Seba Koopman runs a $2.2 million bakery and bistro with 31 team members. He's passionate about his craft, passionate about tradition, passionate about doing things a certain way. And that passion built something really special. But when predictable slow seasons hit, pressure builds, and the real question surfaces, are you building a business around your identity or are you building a business that can actually sustain you? Today, Entree Leadership's head coach, John Falcons, sits down with Seba to unpack what happens when tradition, pride, and profitability collide.

How does seasonality create cash-flow stress for this bakery owner?

Dave Ramsey 0:57
If you've ever wrestled with letting go of how you've always done it, this one's going to challenge you. Listen in.
Seba Koopman 1:05
Well, Siva, thanks for being here today. Tell me what's on your mind. Our business is a little bit of a seasonal business where most of our money gets made in November, December with Christmas sales in the bakery. We bake a lot more. We get in a lot more imports from the Netherlands to sell at the bakery. And so that means that January, especially July, are our slow months. And I've learned to be a little bit stubborn, I think, with untrue leadership. Instead of believing that we can only have our profits in those two months, I just want to be profitable every month. And so if I look at the weekly sales and want to budget according to that, then we often have to spend more money to keep the shelves full.
Seba Koopman 1:47
For example, one month, our customers were saying, like, see what's going on. Are you going out of business? Like, what's happening? Like, there's nothing on your shelves. And so we were just trying to keep our stock as little as possible to be able to just use as little cash as possible. And so my question is a little bit around how we need to spend money to make money. But if we keep spending more than we make, then there's not enough money. So yeah.
John Falcons 2:16
We'll make more money.
Seba Koopman 2:19
I know people who make more money.
John Falcons 2:21
Well, all kidding aside, do you think there is, even though you haven't done it to date, do you think there might be opportunity to diversify what you offer? So to make those lower time, I mean, can you make an apple pie? Yeah. That's too North American. We're Dutch. Yeah. Okay. So, okay. That's a good comment. Let me ask you, do you want to be Dutch or do you want to be successful?
Seba Koopman 2:46
Yeah, that's a good question. We've definitely tried to diversify and try so much almost to the point where we're going like we got way too big of an assortment and we want to stay in a niche area and do that well so that we're known for that. Otherwise, you become this Walmart where everyone goes to. So I want to stay niche. So I thought by being Dutch, I could be successful.
John Falcons 3:11
Yeah. Okay, good answer, because I tossed you a hard question. But can you not be niche and known for being higher quality than Walmart? Absolutely.
Seba Koopman 3:23
Absolutely, yeah. And maybe part of the answer is margin as well, that we work that better and are more proud of ourselves in presenting that and having the customers come that actually want to buy it. And so, yeah.
John Falcons 3:38
I got to ask you, what's the number one selling item that you produce?
Seba Koopman 3:44
In the products that we make, so about 60% is the bakery, bread and pastries, and about 40% is the import. So we order everything from candies to cheeses to all of that.
John Falcons 3:55
And is there a big Dutch population where you are?
Seba Koopman 3:58
Yeah, there's 40,000 to 50,000 people in the Edmonton area that are Dutch, from Dutch descent.
John Falcons 4:03
All right. And so the idea of not being Dutch probably isn't a good idea. But still, in other months, are there other celebrations besides Christmas in the Dutch calendar that you could lean on?
Seba Koopman 4:17
Yeah, there's the King's Day. When the Dutch king has his birthday, everything is orange. So we have an outside party, and we get a live music out there. And yeah, we make that a celebration. And so yeah, we work with that. When is that in the year? The end of April. The end of April. Yeah. Okay.

What specific seasonal trends cause low months and high months in their business?

Seba Koopman 4:36
What's your worst month? Probably July.

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