Timing the Crowd: Winter Investments

Crowdfunding Winter Investing Tips

Some industries are seasonal and timing your entry and exit could be beneficial. Of course, timing the market doesn’t work for 99.999% of us but there are reasonable approaches to seasonal trends. I’m listing seven(ish) industries that thrive in winter even though the timing of their inclusion here may be too late for most investors to capture their benefits now, but the information may prove useful otherwise.

  1. Hobby stores, gyms and sports companies and services.  Around the winter holidays and the inclement weather across most of the US, these businesses see an increase in revenue at this time of the year. People who have their travels restricted often look to inside diversions that hobby stores provide while others seek outdoor recreation that a variety of sporting companies benefit. Gyms sell a record number of annual memberships at this time of the year combining the 8-12 average pounds of weight gain by Americans between Thanksgiving and Christmas as well as New Year resolution effects. Not that half of them get used for more than a couple months….
  2. Snow removal services. (North).  Not sure this requires a lot of deep thought. Local entrepreneurs can make a decent living in the north across the 3-4 months of the snowy season and they may look for investment capital to purchase equipment. If tied in with towing or mechanical services this is a fairly regular business. And in years when the weather is terrible, income could be significant compared with a modest front-end investment.
  3. Local or regional coffee houses.  Winter brings out even more coffee, tea and hot chocolate lovers. This is not a bad investment throughout the year, but at a time when you would think people would be less willing to accommodate an extra stop in the morning when getting to work, revenues actually go up. I don’t drink coffee so I’m one of those who don’t get the desire to take time out of my morning or afternoon…but the numbers don’t lie. And in big cities most people don’t drive so the stop along the way is not as inconvenient as it could be for suburban or rural folks.
  4. Mechanical shops and garages. (North in winter, South in summer).  Again, like snow removal these are not too complex for someone who has lived through a Wisconsin winter or an Arizona summer to understand. Garages do, pardon the pun, a brisk business this time of the year. If it is combined with additional services then they will see a solid increase in revenues in the winter but could be looking for expansion or equipment capital. And these small businesses owners find conventional loans very difficult. Crowdfunding could help them capitalize on a business opportunity they know well.
  5. Building supply and home improvement services.  Not a lot of outside repairs and remodeling is going to happen in the winter for two-thirds of the country, but for the third that has clement weather and for all parts of the country who start to think about those little indoor repairs while off on vacation there can be an uptick to business starting at this time of the year.
  6. Mobile games and applications.  Kids are shut into their homes and games are the craze. Some of these games are relatively inexpensive to build (tens of thousands to a couple hundred thousand) and yet can produce tens of millions in revenues. I included it as seasonal, but it is actually a viable option all year round. But you need to have a little technical sophistication to invest here…or an eleven year old son or daughter. Same thing.
  7. Physician offices and outpatient care centers.  This is another year round option, but it happens that in poor weather we see people get sick more often. You come off the flu in the fall to get colds and such added to aches, accidents and general seasonal malaise. Business is good for those who care for us when were are not feeling our best. Mom’s stock goes up this time of the year but the cost of that equity, or even worse, debt, may be too costly for most investors… accredited or not.

Dr. Rickel is a Senior Advisor at RAZR with executive experience across multiple industries. Member of CFIRA, NLCFA. Todd can be reached at $Doctor@razr.com.