Seasonality is the pattern of demand rising and falling at the same points each year.
Most service trades have one. Heating and cooling work follows temperature. Home improvement follows the weather and the school year. Tax and bookkeeping work follows filing dates.
Why it distorts comparison
A month compared with the month before is comparing two different points in the cycle. A quiet month that follows a busy one looks like a decline and is usually nothing of the kind.
The comparison that carries meaning is the same month a year earlier, which holds the season constant. See revenue consistency.
Why it is a cash problem rather than a revenue one
Revenue falls in the off season. Fixed costs do not. Rent, insurance, loan payments and salaried staff continue at the same rate against a fraction of the income.
So the constraint is not the slow months in isolation but whether the busy months have been used to fund them. This is what a strategic reserve is for, and why cash runway is read differently in a seasonal business.
Planning against it
A cash flow forecast built on a monthly average will be wrong in both directions: comfortable in the busy months and short in the quiet ones. Built on the actual shape of last year, it shows the low point in advance, while there is still time to act on it.
Working against the cycle
Some businesses flatten the curve rather than fund it: maintenance agreements that bill evenly across the year, a second service that peaks when the first does not, or off-season pricing.
Each converts a seasonal business into a partly recurring one — see building recurring revenue.