A friend recently mentioned that one of her business associates uses the “forklift index” to gauge the business cycle.
The rationale goes something like this: When this seller of replacement parts for forklifts sees sales bump up, he knows that business activity is beginning to bounce back. Shipments increase, forklifts get put to harder use and, consequently, need more frequent repair and maintenance.
For most businesses, though, the calendar is a pretty good predictor of business activity.
For some retailers, August is a welcome month as families prepare to send their kids back to school and outfit them with supplies and new clothes. And lots of retailers make their biggest profits around the holidays in November and December.
January and February, however, are long, cold months for most of those same merchants.
In the retail food business, August is typically the slowest month. Customers go on vacation, spend their weekends at summer getaways and, during extremely hot spells, eat less and eat out more often. For the restaurant trade, August is one of the best months, according to the National Restaurant Association. People at home eat out more, while people on vacation eat out more, too. Maybe restaurateurs have a “knife-and-fork index.”
A funeral home owner once told me that his business is almost always very slow around the Christmas and New Year’s holidays. An auto mechanic I use says he can tell when it’s September by looking at the activity at his garage. Things grind to a halt as his customers take late summer vacations and realign finances in the wake of back-to-school spending.
Back in the days when cars changed their styling every year, September used to be a great month for auto dealers. Buyers eager to make an impression on their neighbors or co-workers would rush into the showrooms and scoop up one of the new models. Nowadays, however, auto dealers can be pretty sure that a wave of SUV buyers will invade their stores after a heavy snowstorm.
If you have some bellwethers in your business that help you predict which way your industry might be going but that don’t turn up on the evening news, I’d like to hear about them. Your responses will give us an idea of how closely you read Smart Business, a key indicator for our enterprise.
