seasonal sales variation

Mark Rogers

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I am working on financial projections for a frame store I will open soon. Can some of you share the percentage of sales change you see month to month. In other words which months do sales go up by 30% or down by 20%. I thought the PPFA would have this info but I did not see it. I suspect it would probably be useful to everyone. If a bunch of people would like to email me their numbers I will compile them and post the results.

Thanks,
Mark Rogers
Frame Destination, Inc.
 

Ron Eggers

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Mark, this might be unique, but I doubt it.

I've tracked my sales for just shy of 27 years and have been unable to establish a monthly pattern.

The biggest single sales month I ever had was an August. The slowest single month I've ever had (after the first year, which I ignore) was an August.

Sales by day-of-the-week are equally ambiguous.

I think the biggest thing that skews the numbers for a very small shop like mine is that a single huge order (or receipt) can make a day, a week or even a month.

Good luck. I'll be interested in other views on this.
 

Curly's Mom

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Originally posted by Ron Eggers:

I've tracked my sales for just shy of 27 years and have been unable to establish a monthly pattern.
My god, sometimes I DO think that Ron and I are evil twins separated at birth! I have been doing the same thing for the same time, with the same results except my busiest month on record was a exceptionally cold and snowy February. Go figure!
 

gemsmom

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I'll second what Ron says.

The only thing I can be sure of, is that we get very slow around tax time and Labor Day. Every year.

My biggest month was also in August. Second biggest, in July.
 

MatFramer

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I never really tracked percentages. However, I have been framing for 16 years. An overall pattern that I have noticed is:

January -- almost always is the lowest month.
February -- only slightly better.

If you have a lot of snow like we do here, people finally get tired of staying in and will eventually start to come out.

March-August can usually run about the same, better than Jan. and Feb.

September to December really picks up.

September is a late starter. Kids are going back to school and people are often consumed with yard work. However, after the 20th things begin to flow a little more. It should continue to build up until Christmas Eve.

Having said all that.......When I was running my own store, I was in a tourist area. That changes the above.

My largest months were July, August, December. My lowest months were January, February, and October or November. If October was good, Nov. was down or vise versa. I never could figure that out, but it was a consitant number.

Everytime I was able to figure out the rules, they changed on me!!!!

I hope this helps a little bit as you make your projections. Good luck with your shop.
 

Bob Carter

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This type of analysis is generally referred to as Balance of Sale. In addition to comparative sales figures on a monthly basis, most serious retailers also break those figures down by department or category.

In my Business classes, I always do a presentation on the use of this data. I, invariably, get that "deer in headlights" look.

I think this is another example of "If you had this information, what would you do with it?".

So, if you did have this information, what would you do with it?
 

Jay H

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It’s funny that you say that Bob, because I have done the same thing that Mark is doing. I know it means nothing but I do it anyway. I have asked my mother (who has worked in frame shops for years) similar questions like this. I have decided to open sometime between late March and early April depending on how much remodel I have to do. I picked those dates for various reasons, but one reason is because I think business is a little slower in Jan and Feb. Plus IM scared to death to pay a rent payment twice what my house payment is and watch a few cars slide by my storefront in a foot of snow. At least thats what I did with my information.
 

Maryann

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We've tracked our sales by month since we've opened. I'm with Ron/Curly. There is no rhymn nor reason. November and December are always busy. Last January broke all records. I find the weather to be a big factor. Cold doens't seem to bother people - unless it's extreme cold-like today. Heat slows business tremendously. I figure people get into their air conditioned home and decide that they're not going anywhere. This year, along with the dollar sales, I'm recording the weather. Don't know what I'll do with the info, but it'll be interesting.
 

Cliff Wilson

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Well, first, after 1 1/2 years I have no clue. Although December was my highest month both years. :D October was my lowest? Even lower than March when the war hit? :confused:

Bob, If I could predict "by-month" trends, I would use them to schedule direct mail/sales/other advertising. (To improve slow months and schedule spending at the end of fast ones.) I might negotiate payment schedules to coincide with "busier" months to facilitate cash flow. Mostly it would give me more comfort and less anxiety to have some ability to predict trends.

Maryann, I thought cold kept them away until today??? Sub-zero here and I've had one of my busiest order days except for Christmas rush!

Cliff

[ 01-10-2004, 01:21 PM: Message edited by: Cliff Wilson ]
 

Mark Rogers

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Bob,

One, cash flow analysis. I will be bootstrapping my business so it will be low on cash for a good while. I would like to know ahead of time if there are months I may have to put some extra money in. Secondly, I have a long-term growth plan for things like buying certain equipment, and being able to provide certain amounts of income. Significant monthly variation will change my growth curves and skew those dates. Lastly, since it will be a new business, I will be experimenting with price/curves and marketing. It is good to know ahead of time when unrelated external factors will override my results. For example, I already know now not to judge a new marketing approach in Jan since my revenue will be falling off regardless. However, if I know of something that does work well, I may want to step it up in Jan to help offset the decline.

Mark Rogers
Frame Destination, Inc.
 

Martycip

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Fort Worth, Texas, USA
Hi Mark,
I don't want to confuse you further, but we have been in business for 17 years in Fort Worth and our biggest month is January every year without fail. It goes to show that what other people have been telling you is true. Each individual business will have its own results. It is very hard to forcast a relatively low volume business.
 

Bob Carter

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The good news is any/all information is important. The bad news is a lot of is useless unless we know what we can do with it. All the examples (cash flow, etc) might be gleaned from this type of data, but that would likely be more applicable to hard-core budgets.

The good news is that we framers are, at least, looking to tools that most all other retailers use to help in the decision-making processes.

But, let's expand the discussion with some scenario development: Hypothetically, sales for Jan are 7%, Feb are 6% and March are 8%. What does that tell you and what would you do with that information? (Those percentages are of the 100% yearly total). And, suppose that you did 8% in Jan, 7% in Feb and 6% in March. Would you do anything differently?

Or, would you need much more information? Or, would it not make any difference in planning?
 

Ruth

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I'm another one chiming in with the "no rhyme or reason". I kept expecting a pattern to develope... after thirteen years, I've given up on that idea. :rolleyes:
 

Mark Rogers

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To an industry veteran, this probably seems like a stupid question. I am not worried about a fluctuation of a couple %. Some industries/regions have serious fluctuations that can and have killed businesses.

I am actually glad to hear that there is little pattern. From the responses so far it would appear that regional issues such as weather are as significant as anything else in custom frame seasonal buying patterns. I might expect a little pickup towards the end of summer, probably due to people taking vacations and picking up artwork on their travels. Possibly another pickup towards Christmas for gifts. I was told by a local Dallas distributor that he sees a definite pickup in December. Post Xmas, and April possibly a little decline because people are broke.

What will I do with this info during my new business planning? I will scratch "investigate seasonal buying patterns", off my to-do list, and be glad no further action is necessary. Once I am in business, I will probably make sure I am caught up on stock before the end of summer, and Thanksgiving. If I see a couple slow months, I will probably do some sort of mailing out to my customer list to refresh their memory of my company for when they do have money again, and/or prompt them into action during my slow time.

Marty,

I liked your web page. I will probably stop by your place some Saturday.
 

JRB

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I've kept one of those old fashion ledgers from day one of my business up until now. I have an exact 29 year record of all my monthly sales.

Ron is absolutely correct, there are no patterns.

Any month can be your biggest month, that same month can be your worst. The only pattern I have ever seen that repeats itself is, the first half of the year is generally slower in sales than the last half of the year. However, 2002-2003 it was the exact reverse. So now there are no patterns.

One other thing I have noticed is customers seem to mentally communicate with each other. When they stop coming in, they ALL stop coming in. When they decide to come in again, they all seem to get the same idea at once, your swamped, you don't get out from behind the sales counter all day.

John
 

Ron Eggers

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What do you do with this non-pattern once you've established it?

When I had employees, I tried to schedule vacations around the slower times. I do the same thing now that I work alone, except now it's called a shut-down.

I would beef up my inventory a bit during busy times so I don't run out of, say, glass or fomecore or ATG.

During busy times, I'd use more chop-and-join. During "medium" months, more chop. During the slowest months, I'm more likely to cut frames from stock.

It's all academic, though, since I never know which months are which until they're over with, so it's a crap-shoot.

One thing I have learned: No amount of advertising is going to convince people to get framing done during a really slow time, but it can make you even busier during a busy time.
 

B. Newman

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Originally posted by Ron Eggers:
1. What do you do with this non-pattern once you've established it?

2. No amount of advertising is going to convince people to get framing done during a really slow time, but it can make you even busier during a busy time.
1. I wondered about this myself. About 5 years ago I decided to take the business "to the next level" and I started meeting with the folks at SCORE. As I've said, I have "detailitis" so I had all kinds of facts, figures, and percentages, but I just didn't know what to do with them.

The first thing they had me do (and of course the one thing I hadn't done) was see how much work came in each month for the past years to establish a "business flow" and to predict future growth. I was supposed to do "projections" with this info. But I was like most of you; no pattern.

Just this year I added a "field" on my QB sales receipt for "date in." Since some of our work (other than framing) may be a couple of months before it is finished, makes it harder to just look at "sales" and see work flow. So now all I have to do is run a report and specify, say, "Jan 03" and I'll see all the work that came in that month. I haven't run any of those reports yet, but I'm anxious to.

2. Didja notice that another thing that customers do is communicate with each other on what to bring in to frame. ( ;) ) They plan on all bringing photos, or all bringing jerseys, or what ever. It's that way in the antique restoration as well. We get all of the same kind of work in bunches. If we get 1 weird thing, then we'll get 10 of the same thing!

As for the advertising vs slow times. Advertising/marketing should have no "times" it should be consistant. (IMHO)

Betty
 

tnframer408

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Bob's percentages--and Betty's last line--ever more convince me to advertise, advertise advertise. Non stop, week in week out. Regardless of economic conditions.

In fact, last year, our worst, adertising increased, even though we could scant afford it.

But, ironically, now the chickens come home to roost. Dec and Jan have been record-setters, only because those people rememberred our advertising.

Needless to say, wwe haven't quit, scaled back, or anyting else.

Consistency, consistency.

Think "tortoise and hare"
 

Bob Carter

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I have to be honest and say I'm surprised that so many have no predictable patterns. Perhaps Marty is correct when he states the difficulty of predicting low volume operations. I keep putting things in my own perspective.

Mark suggests that a couple of percentage points don't mean much. I think it's that perspective thing again. Ask Jay what a single percentage point means in any month and it's $100k shift in business; for us(not so large as he) and it's over 5 figures. So, to us, it's important and significant.

But, regardless of size, it is about good record-keeping and good understanding of those numbers.

They do mean something. And how you can use that information to your advantage can make a difference
 

JRB

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I advertise in the local shopper rag every week, without fail. I also send out a coupon in one of those coupon books once a month. I have the back page, so we do get results.

Years ago a savvy retailer told me. " Never advertise during slow times, hit em hard when you are busy." Another piece of his wisdom was, " Never extend credit to newspapers, advertising agencies, or bars." ( Len Aaron, Aaron Brothers )

He has always been right on the money with his advise. The reason I don't follow it on advertising is, I worked out one heck of a deal with the shopper, if I run every issue. If I don't run every month in the coupon book, I will lose the back page.

I usually don't beef up my advertising when it is busy just because I plain don't have the time to deal with advertising salespeople.

John
 

JRB

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I do want to ad to the original question. You will normally have one good month in the summer, usually August. You will probably be busier November and December. I can show you my ledger and that seems to be the way it goes, but it is no guarantee.

John
 

Reynard

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January and February tend to be the slower months but not always...The rest are usually steady enough but as has been said if you have a smaller enterprise then one decent order makes your figures look much better.

At the moment looking back october last year was poorer than normal for me.For no apparent reason.I try not to look at these trend type things too closely as it can get you uptight for no good reason.
 
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