Seasonality is the fact that our demand, revenues, profits, or business requirements do not follow a set line – they tend to ebb and flow over the course of the year. Retail businesses obviously do most of their revenue during the holiday period starting with Black Friday. Real estate businesses make most of their money in Q4. Financial institutions often start the year strong. Anything involving outdoors or water peaks in the summer. These are all seasonal factors.
But the same concept applies to any business. Most of us don’t want to negotiate new vendor contracts at the start of the year because our budgets are already set – but we are more than happy to renegotiate now that our budgets are set. For public companies, the end of each fiscal quarter is a time of closing the books – not opening new costs. Just as the start of each fiscal quarter is when delayed items all rush through.
Geographic seasonality also comes into play. US, Europe, Asia, Latin America, Australia and Africa all have different holiday schedules and cultural work requirements (in general and for specific job requirements). For 365 businesses it’s important to account for those factors as you don’t want a US holiday to disrupt global business. For 24×7 businesses a follow-the-sun strategy is also a way of dealing with seasonality especially when holidays are factored in. You can’t just have 1 office per region of the world, you need redundancies to deal with those cultural factors.
In the distribution and logistics space, seasonality becomes a huge factor when inventory levels suddenly ramp up and what was once empty space is now full just to have it fall away again. Does it make sense to your business to keep warehouse space that is empty 8 months out of the year? Maybe (even likely) but worth thinking about alternatives.
CRE strategy can’t solve all of these but it can certainly address a lot of them.