How to Manage Cash Flow in a Seasonal Business: Lessons from Spirit Halloween

Key Takeaways

• Your yearly profit can look healthy while your bank account runs low in the slow months
• To keep your cash healthy in slow months - compare your fixed costs (often referred to as OpEx) to your revenue month over month so you can save the right amount for slower seasons
• Additionally make more of your costs seasonal, find a non seasonal revenue stream that covers at least your fixed costs, and set aside tax money from every sale.

Which month does your bank balance hit its lowest point each year, and how low does it go? In a seasonal business, that month matters, because it decides whether you can cover payroll and pay suppliers.

At NCO, we look at every problem through people, process, and systems. Managing cashflow in a seasonal business requires all three.

How Spirit Halloween Makes One Season Work

Spirit Halloween is opening 1,575 stores across North America this fall and hiring more than 52,000 seasonal associates to run them. Joseph Marver started the company in 1983 by filling his women's clothing store with Halloween costumes, and Spencer Gifts bought it in 1999.

Spirit takes short-term leases on empty retail space, often stores left behind by retailers that closed. Most retailers sign leases at the start of the year, so by midsummer, when Spirit is looking for buildings, it faces little competition (Fortune, October 2025). Its staff is seasonal, and its fixtures go up and come down within weeks. When sales stop in November, most of its costs stop with them.

So what can seasonal businesses learn from this success story?

Profit Best Practices for Seasonal Businesses

Make more of your costs seasonal

Choose shorter leases, use seasonal or contract staff for your peak, and rent equipment when the cost is close to financing it. You'll pay more per unit, and in exchange your costs shrink when your sales do.

Arrange financing in your strongest month

A line of credit is a loan you draw on as needed and repay as cash arrives. Lenders look at your recent results, so apply during your busy season.

Set tax money aside from every sale

Move a set percentage of each sale into a separate savings account.

Add revenue in your slow months

Maintenance contracts, off-season services, storage, and prepaid packages can all bring in cash when nothing else does. This revenue can be small, as long as it arrives in the months you need it most to cover your fixed expenses.

In the case of Spirit Halloween - while their physical stores shut down, they sell their products online year round, making additional revenue from costume parties and other events.

How to Stay Cashflow Positive in Slower Months

Determine your yearly fixed costs

Determine your fixed costs by adding up a full year of rent, salaries, insurance, loan and equipment payments, and software – then divide by 12. This is what you need to make sure is in the bank account each month

Determine your true profits

Take your peak season's revenue and subtract the direct costs of good sold - such as inventory, materials, and seasonal labor. Then compare what's left with your yearly fixed costs.

For Example:

Peak Season Revenue ($720,000) - Direct Cost of Peak Season ($430,000) = $290,000

Annual Fixed Costs = $240,000

What’s actually left in the year = $2000

In this example, the busy season covers the year's fixed costs with $2,000 to spare. If this business made decisions just based on busy season it might overspend and be in the negative.

Example: A San Diego Landscaping Company

Before: A San Diego landscaping company had $950,000 in revenue, with 65% of it earned from March to July. After a record season, the owner saw $180,000 in the bank in August and bought a $90,000 truck with cash. The tax payments on that strong year came due over the winter, during the company's slowest months, and the owner used personal savings to cover payroll for two of them.

The fix: The company opened a separate tax savings account and now moves 22% of every sale into it, a percentage the accountant set from the prior year's tax bill. It added winter maintenance contracts, billed monthly through its accounting software. The owner and the accountant now review the cash map before any purchase over $10,000.

The result: The next year's tax payments came straight from the savings account. Winter maintenance contracts brought in $8,000 a month from November to February, and payroll ran on business cash all year.

Quick Checklist

Answer yes or no to each question.

• People: Do you have an accountant who reviews your numbers with you to determine how much cash you need each month?
• Process: Do you have a process to set aside savings for slower months?
• Process: Do you have a revenue stream set up for slower months?
• Systems: Do you have a tool (like QuickBooks) to track your monthly expenses and true annual profit?

If you answered no to two or more questions, now is a good time to plan, before your next slow season starts.