Cost Saving

Practical cost saving going into the winter months

15 June 2022

There is no doubt that South Africans are creatures of summer. Summer just feels right. We want to get things done, we want to braai and socialize and there is certainly a general sense of optimism in the air. There are 3 months of the year which typically bring around the worst of winter. May, June and July.

The seasonality of winter versus summer affects different industries and different provinces in a myriad of ways. For example, winter in the Western Cape is typically very rainy with far fewer tourists are visiting the popular tourist attractions. The hospitality industry tends to suffer from these effects. A lot of construction can’t happen during rain so some hardware stores focused on contractor sales can also take a knock. Further north, winters are dry and cold, while there isn’t massive tourism in these regions, most venues are optimized for the long summer months and people do tend to stay at home and eat hearty meals instead of going out.

In general South Africans just tend to baton down the hatches and await the return of spring to get going. I do sense that business will be stronger this year compared to the last two years where COVID restrictions really stole a lot of business from SMEs in the retail sector and there is a general sense that business owners want to take every opportunity to get back those lost years of revenue.

Regardless of how this year turns out, it’s always a good idea to understand and plan for the seasonality in your geographic area or business sector.

Here are some quick and easy tips to get you through the following 3 months:

  • Make sure you can sustain your overheads on the average turnover you make during your slower months – this means you’re always in a profit-making position.
  • Take the opportunity to negotiate with suppliers – people are hungry for business, and suppliers may be willing to be flexible on repayment terms
  • Try to make as many costs variable – Costs tied to turnover will move up and down through the seasonality
  • Think about market opportunities that only exist in the winter months
  • Plan and prepare for your busy season
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