What is Seasonal Industry? – Everything You Need to Know
The seasonal industry refers to companies related to their everyday business activities. They receive most of their income each calendar year; In a relatively small number of months or weeks. The annual business cycle of these firms is entirely predictable. Seasonal industries have just one/two top points; During which customer activity grows significantly. The rest of the year is usually either bad or unprofitable. For example, the seasonal industry is owned by companies that make a large part of their business by selling Christmas trees and ornaments, Halloween costumes, accessories.
The seasonal industry is different from the cyclic industry. The first experiences predictable changes in business templates each year. And the other sees such changes that extend over many years and affect periods of economic expansion and contraction.
Understanding of Seasonal Industry
The seasonal industry typically falls and flows with the annual sales cycle. They need to make enough money during seasonal peaks, That business owner can endure all year round. Otherwise, the owners of these businesses need other sources of income, to keep them out of season. While some companies are only open for busy seasons, such as an ice cream stand; Others significantly reduce business activity throughout the year.
Seasonal business owners typically spend much time managing their cash flow. Or save enough free money over time; As a safety net. Or provide a line of credit to cover liquidity issues; Which can occur beyond the busy season.
Seasonal industry workers usually work further than 40 hours a week, especially during the top season. However, you have to do other work for the rest of the year. Many seasonal companies, especially retailers; Traditionally do not make a profit every year; Including Black Friday. They must properly plan their payroll for most of the year; Until seasonal workers are hired for the holidays.
Skiing is one example of a seasonal weather-related industry. Most ski resorts have the amount and quality of snow needed to ski at certain times of the year. The ski resort, its staff, the nearby rental and ski equipment repair shop and even nearby restaurants and shops are all planning this season. Some seasonal industries are dictated by nature. For example, farming is a seasonal industry, at least most of them; Because the growing season in many parts of North America lasts half a year or less.
Lobstering is another seasonal industry due to the annual migration of sea creatures. The Massachusetts lobbying industry will be fully closed from February 1 to April 30; To allow endangered right whales to make their way to the shoreline so as not to fall into the trap of lobsters.
The season usually starts very slowly. Then begins to move forward in July, when many lobsters begin to melt. They are typically hungry and can easily fall into the trap. Autumn is generally the boom season as lobsters are trapped when migrating to deeper waters. The industry still slows significantly in late autumn and winter; Before it closes in February, the seasonal cycle begins again.
Some other examples include leisure, school-related companies, tax services. Easter, Christmas, Thanksgiving, Halloween… all this leads to increased sales for such products; Such as decorations, sweets, toys, clothes, and food.
The time of year can play a significant role in forex trading. For example, checking at how the US dollar acts about diverse currencies; you can evaluate value activity indicators through analysis. When the only price is considered, seasonality patterns often emerge. It is important to remember that marks can disappear quickly. However, when the historical form is repeated most of the time; This can become significant for traders. For example, one of the great examples of seasonality is the USD/JPY. USD/JPY was higher in 68% of the samples in July.
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