Seasonal businesses like construction and landscaping can offer up one of the most tricky types of debt collection issues. No matter how much credit you have extended to a particular seasonal business, it can be awfully hard to collect any portion of that debt during their slow season.

But their financial calendar also doesn’t have any impact on your own obligations. You still have your own bills to pay, and you are going to be able to run your business a whole lot better if you are able to focus on the business instead of managing delinquent accounts.

So how do we work with seasonal businesses that require credit terms without exposing ourselves to potential collections issues? Here are five simple tips to keep in mind when working with seasonal businesses.

Limit Your Exposure

Rule Number One when dealing with seasonal businesses is to limit your exposure by capping the amount of credit you are willing to offer these types of businesses to an acceptable level.

You should know from experience what types of businesses will struggle through different seasons in your industry. Focus on making sure that you don’t give the owners of those businesses enough rope to hang themselves by over-borrowing.

Express Empathy

If you do decide to offer credit to seasonal businesses, you knew what you were getting into, so treat the owners of those businesses with a little bit of empathy. Yes, they also knew what they were getting into, but you can’t get blood from a turnip.

Many times, being the persistent creditor who is friendly, but firm, will give the debtor more incentive to pay you back when their seasonal business picks up again.

Don’t Be a Pushover

Of course, you also don’t want to give the debtor license to walk all over you either. Stick to your guns and remind the debtor about both the commitment they made to the terms of your arrangement and of your own obligations to your own creditors.

While you still want to approach the situation with empathy, you also have to draw the line at some point. Just remember to do so in a professional manner and avoid taking anything personally.

Offer Good Faith Payments

Once a seasonal business falls behind on their debt, the writing is basically on the wall. In order to avoid falling out of communication with the company, it is often a good idea to offer them a reduced “good faith” payment plan during their slow months.

This might feel like you are simply letting them off the hook, but it is often a better solution than demanding a full payment and receiving nothing. Once again, it’s hard to get blood from a turnip, and it’s really hard to get money from a company that isn’t currently making any.

Be First in Line

One of the main reasons that we want to think about offering good faith payments and listening to the debtor with empathy is that you want to be the first creditor in line when their busy season begins and the money starts flowing in again.

By treating the debtor with respect and dignity you will be way more likely to settle the account eventually, as opposed to the alternative, which leaves you with nothing.

Owning and operating a seasonal business can be very difficult from a cash flow standpoint. Understanding this struggle both before you extend credit and during the collections process can help you quite a bit in making sure that you eventually get paid for services rendered.