People conflate seasonality and cyclicality.
They’re different and unrelated.
Examples of seasonal businesses: Christmas trees, fireworks, ski slopes, air conditioning, tax accounting, etc. Most businesses have some seasonality (i.e., some months are predictably strongly than others), but the above examples are strongly or in some cases extremely seasonal. Seasonality is predictable, so not inherently bad, but it can complicate operations and cash flow.
Examples of cyclical businesses: construction, luxury retail, hospitality, car sales. A downcycle can happen anytime during the year, so it has nothing to do with seasons. A cycle is largely unpredictable, which is inherently bad, and cyclicality therefore compromises a company’s valuation. Businesses that are insulated from cyclicality (non-cyclical, recession-resistant, or recession-proof) tend to be popular investment targets (examples: healthcare, groceries, utilities, funeral services). Counter-cyclical businesses actually perform better during downturns (examples: discount retail, debt collection agencies).
