Seasonal Business Cash Flow: What Spirit Halloween Can Teach You

There’s an Old Testament story about Joseph in Egypt. Pharaoh has a dream about seven fat cows and seven lean cows, and the lean cows devour the fat ones. Joseph interprets the dream: seven years of plenty followed by seven years of famine. His advice? Store up during the years of plenty so Egypt can survive the famine.

That story is thousands of years old, and businesses still haven’t learned the lesson.

Every Business Is Seasonal

When people think “seasonal business,” they think ski resorts or landscaping companies - businesses with obvious peaks and valleys. But almost every business has seasons, even if they’re less predictable.

E-commerce picks up around the holidays. Construction slows in winter. Tourism follows the weather. These cycles are easy to see.

But what about businesses tied to interest rates? When rates are low, title companies and real estate agents are loving life. Fat cows everywhere. Then rates spike, and those fat cows get skinny fast. The cycle might take years instead of months, but it’s still cyclical.

B2B has its own rhythm too. Late Q3 and early Q4 is prime time to land deals because business divisions have budget they’re looking to spend. They want to report back to the CEO that they’ve solved the problem they were asked to solve. Then the holidays hit, and everything goes quiet until the new year.

The businesses most at risk aren’t the obviously seasonal ones. Ski resorts know summer won’t be their money-making time. The businesses that get in trouble are the ones whose seasonality is less apparent - the ones who don’t realize the lean times are coming until they’re already there.

Spirit Halloween Gets It Right

Think about Spirit Halloween stores. Those giant storefronts would never turn a profit if they had to pay rent year-round. The business only works because they’ve built their entire model around the lean times.

Their overhead during the off-season? Zero. They close down completely. Then they pop up in temporary spaces only when it’s Halloween season.

That’s extreme, but the principle applies to every business: your fixed overhead costs should be based on the lean times, not the fat times.

Constrain Based on the Lean Season

Here’s where most businesses mess this up.

During the fat season, revenue is flowing. Account balances are high. It feels like you’ve finally made it. So you sign a bigger office lease. You hire more full-time staff. You commit to expenses that assume the good times will continue.

Then the lean season hits. Revenue drops, but all those fixed costs remain. Now you’re bleeding cash.

I had an e-commerce client who came out of the holiday season flush with cash. Revenue was way up. My job in that moment was to be the stormy rain cloud - to celebrate the success while reminding them that we still need to budget based on the lean months, not the fat ones.

It’s not a fun role to play when everyone wants to celebrate, but it’s necessary.

How to Actually Do This

The key is constraining your overhead based on your lean season capacity.

Take office space as an example. Most businesses think: “In our busy season, we’ll have X employees, so we need office space for X employees.” Then they sign a long-term lease for that space.

Wrong approach.

Your long-term office space should fit your lean-season headcount. If you need more space during the fat season, handle that separately - a short-term sublease, a temporary co-working arrangement, something you can walk away from when the busy period ends.

So you might have two spaces: a permanent one sized for your lean team, and a temporary one you spin up only when needed. When the season ends, you let go of the temporary space. Your fixed costs stay manageable.

The same logic applies to staffing, equipment, and any other overhead. Build the permanent structure for lean times. Add temporary capacity for fat times.

The Fat Season Trap

The hardest part of this isn’t understanding it - it’s executing it when you’re flush with cash.

During peak season, you feel rich. Money is flowing in. It’s easy to think “we’ve turned a corner” or “this is the new normal.” So you spend accordingly.

Then the lean season comes, and you realize you built your cost structure on a foundation that only exists a few months per year.

The discipline required is this: when times are good, save aggressively. When you’re tempted to expand your fixed costs, ask yourself - can we sustain this during the lean months?

If the answer is no, find a temporary solution instead.

The Buffer as a Brake

One way to protect yourself: maintain a savings buffer that covers three months of your fixed expenses.

The benefit isn’t just survival money. It’s that expanding your fixed costs becomes painful. Want to sign a bigger lease? First you have to grow your buffer to cover three more months of that lease. Want to add a salaried employee? Buffer has to grow first.

It’s not foolproof - if your fat season lasts longer than three months, you can still convince yourself it’s permanent. But it adds friction. Another tap on the brakes before you do something you’ll regret when the lean times come.

Learn from the Extremes

Highly seasonal businesses - the ski resorts, the landscaping companies, the Spirit Halloweens - they figure this out quickly because they have no choice. The contrast between fat and lean is so stark that they can’t ignore it.

The rest of us should learn from them. Because even if your business doesn’t feel seasonal, the lean times will come eventually. Interest rates will shift. Markets will change. Customers will slow down.

The question is whether you’ve built a business that can survive when they do.

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Want help building a business that survives the lean times? At Profit Path Books, we help you understand your real numbers and build financial systems that work year-round. Book a consultation to talk through your situation.