Memorial Day is known as the "unofficial start" of summer. While the calendar lists June 21 as the Summer Solstice, the truth is that America's mindset changes after the last Monday in May. Colleges will soon host their graduations and younger students will wind down their academic years within a few weeks.
These events impact small businesses. In towns with "walkable" business districts, the arrival of summer means a big increase in business. People like to sit down at outdoor cafes and enjoy the warm weather. Franchises, such as Rita's Ice or Cold Stone Creamery, as well as locally owned ice cream shops, are likely to see longer lines. Car washes, golf courses, driving ranges, and movie theaters will see an uptick in business. So will specialized sports camps that cater to young soccer, baseball, lacrosse players.
This year may bode particularly well for many small business owners. Overall, the economy continues is slow but steady climb. Meanwhile, gas prices nationally are nearly a dollar cheaper than they were a year ago. According to AAA's Fuel Gauge Report, the national average price is $2.77 per gallon, compared to $3.62 last year at this time. The result is that consumers feel that they have more money in their pocket to spend and may be more willing than in years past to hop into a car and take a road trip. This is good news for gas stations, convenience stores, restaurants, bars, and beach resort lodging businesses.
Savvy entrepreneurs should look for ways to take advantage of summer's arrival:
1. Tie into local events that get people out of their homes. The warm weather brings a host of events, including free outdoor movie nights, summer concert series, and other special events. Find ways to take advantage of these opportunities. For instance, Nick's Pizza in Fanwood, New Jersey, runs special pricing on outdoor movie nights in the local park.
2. Market your business at outdoor festivals. Cities both large and small will host festivals at which small businesses can promote themselves. Their usually not free, but whatever costs are incurred might just be marketing dollars well spent as outdoor festivals are a great way to have direct contact with potential customers. If you own a restaurant, offer free samples at these events. If you own a car wash, have a drawing for free services.
3. Run seasonal pricing specials. Don't be afraid to create a "loss leader." For instance, a Wednesday evening happy hour featuring $5 margaritas will help bring in customers who may stay and purchase full price drinks when the price special ends. Or they may stay and have dinner.
Keep track of how the promotions do. If you run price specials, figure out if your net profit -- not just your revenue -- rose. Those $5 margaritas impact the bottom line if they get customers to also spend at regular price levels for other items. If customers are leaving as soon as the deal ends, you might consider tweaking it by changing the timing or raising the price so that both gross revenue and net profit increase.
Some more good news about summer: a recent survey conducted by Paychex revealed that the majority of small companies have plans to hire in the next six months. This is a sure sign of business growth.
"Looking at our historical data, we see positive small business growth trends during the summer months," said Martin Mucci, president and CEO of Paychex. "Not only do we see an increase in small business hiring from June to August each year, but we also see an uptick in the number of new business starts during those same months."
"Heading into the summer months, you'd expect to see a majority of the job growth taking place within industries that tend to be seasonal--recreation and construction, for example," said Mucci, who added that industries that do not have a natural summer seasonality, including IT and education, plan to hire. "This is good news in terms of overall employment."