Definition of Seasonality

Seasonality is a periodic, repetitive, and predictable pattern in the levels of business activity. Where most or all sales originate in a particular season, quarter, or month.

Explanation

The extent to which irregularity may affect a business depends upon a number of different factors such as time, working capital, and effort. In order to understand these three factors, we consider an example of a seasonal business; wedding seasons.

During periods of peak wedding seasons, businesses like wedding planners, food and caterers, wedding dress designers need to maintain a certain amount of working capital in order to cover the operating expenses.