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How to Make a Seasonal Business Work

By Amy Zimmer | July 29, 2014 11:58am
 Owners of seasonal businesses share tips on how to make the feast-or-famine schedule work.
How to Make a Seasonal Business Work
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BROOKLYN — On hot days New Yorkers line up in droves for icy artisanal treats like the citrus slush with fresh mint from the mobile food van run by Kelvin Natural Slush Co

But being at the mercy of the weather can challenge even the most popular seasonal business. The feast-or-famine nature of the business forces owners to plan and budget carefully, find creative leases and, perhaps, seek out additional markets that aren't as weather-dependent.

That's why Kelvin Natural is now hoping to ride the wave of the craft cocktail movement with specialty frozen cocktails that can be sipped at restaurants all year long.

The company, which launched its business from a food truck in 2010, has spent the past year working with nearly 70 eateries across the city on custom frozen drinks, like the Frozen, Dark & Stormy made with Kelvin Natural ginger slush and dark rum for Miss Lily's 7A, the Jamaican restaurant that opened its East Village outpost last month on Seventh Street and Avenue A.

"Once you shut down for the winter or whatever season it is, you’ll see your bank account dip," Kelvin Slush co-founder Alex Rein said. "You need to make a point to plan ahead for the off-season because if your revenue stream dries up, you're still on the hook for bills."

Here are some survival tips from seasonal businesses:

1. Find flexible leases

Besides selling popsicles made from local fruit at the Brooklyn Flea and Smorgasburg, People's Pops, has four storefronts, all of which close down when the cold weather hits.

The company is able to do that because of flexible leases, said co-founder David Carrell.

The company started with a cart at the Brooklyn Flea in 2008 and then opened a spot in the Chelsea Market two years later thanks to the market's landlord, Jamestown.  Landlords for commercial spaces usually require businesses to sign a minimum 5 year lease, but at Chelsea Market, People's Pops found a space they only needed to operate from April through October.

"Usually you have to sign a lease for 5, 7 or 10 years," Carrell said. "Thankfully we were able to find landlords like Jamestown willing to work with us."

The People's Pops have a regular lease for their Park Slope location, but they are allowed to sublet the space to other businesses to use in the cold months. They find their subletters themselves, through their social network filled with young artisanal food companies.

The company also turned a former flower stand into a pop-up shop in the East Village and they applied for a "request for proposal" through the city to set up a seasonal cart on the High Line, which is only a commitment of a few months as opposed to a year-long arrangement.

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2. Share space in the off-season

People's Pops runs a store on Union Street in Park Slope, which it hands over to other budding food companies in the colder months.

"The idea behind the Park Slope shop is basically like a business incubator," Carrell said. "Companies can use it as a springboard or test if they don't have the money to open with a 5-year lease but are looking for the next step from a flea." 

(Sandwich shop Landhaus, which used the space two years ago, is set to open a Williamsburg shop on South Fourth Street soon.)

The Soup Bowl, a 4-year-old business also in Park Slope, opens in the wintry months in a Seventh Avenue storefront usually occupied by Italian ices and ice cream shop Uncle Louie G's.

"I noticed they were shuttered in the cold winter," said Soup Bowl chef/owner Richard Gussoff. "You’re just filling a void when item would sell and another wouldn't."

3. Start small

When subleasing the ice cream shop, Gussoff made sure he would need minimal equipment, minimal storage and that the space would be easily adaptable.

"If you’re talking about renovation, that's going to take away from profit," said Gussoff, who estimated that he spends roughly $1,000 each season for decorations and a canopy for the storefront.

For their production and storage space, People's Pops and Kelvin Slush Co. both rent space in Bedford-Stuyvesant's former Pfizer buiding at 630 Flushing Ave., a 575,000-square-foot building that is becoming a hub for the borough's burgeoning small batch food manufacturing scene.

People's Pops was one of the building's first tenants in 2011, starting with roughly 2,500 square feet and adding about 500 square feet a year in, Carrell said.

"They said take only what you want and when you need more can add it to your lease," he explained.

Kelvin Natural moved into the building in 2012 with roughly 800 square feet and quickly expanded into 2,400 square feet, Rein said.

4. Keep overhead low

For the first two years, when People's Pops was only at the Brooklyn Flea and Smorgasburg, everyone working for the company had other full time jobs, including Carrell, who was a researcher for Diane Sawyer at ABC News.

Now the company has 50 employees during the high season and 7 people in the winter.

But at a certain point, when a company grows, its hard to keep overhead to a miniumum, noted Rein, whose company has 15 hourly employees during the warm months and six salaried employees around the year.

"As we grow, being as seasonal is a bigger challenge. It’s more difficult to shut everything down," Rein said. "We've taken on some full time employees. We still have to keep the lights on and payroll going."

5. Shift the business plan to transcend seasonality

People's Pops is looking to have more of a year-round presence by wholesaling its pops to stores. It's now in 50 stores, Carrell said. The company is working this year on moving being the single-serve pops it sells into multi-pop packages.

"We're trying to become less seasonal and stop the bleeding," Rein said, noting that Kelvin Natural is expanding its frozen drink partnerships with restaurants and bars and is also looking at warm weather regions, like Miami.

6. Be prepared for bad weather even during the high season.

Summer seasonal businesses, for instance, have to brace themselves for successive bouts of weekend rainstorms that can ruin a business.

"If it rains every weekend in July we have a serious problem," Carrell said, "because we have to make a year’s worth of revenue in a short time."

7. Use the downtime for planning… and vacation

Having a break can be "a blessing" for businesses that go nonstop for six months straight, Carrell said:

"We work incredibly hard for a short period of time," he said. "You kind of get lost in the weeds. So, the time we have off during the winter, we are able to plan."

Carrell uses the time for real estate scouting and other brainstorming.

"Don’t get me wrong," he added. "We definitely go on vacation as well."