For many small businesses, the holiday season can bring a windfall of economic opportunity. However, the holidays could be a rough time if you're caught off guard. If you're a new entrepreneur getting ready for your first holiday season, keep reading to learn how the holidays could impact your business and some smart ways to prepare.
While the holiday impact on your business depends largely on your industry, very few small businesses will get through the holidays completely unscathed. The last quarter of every year presents unique struggles and opportunities that every business owner should be aware of.
In the United States, the holidays, including Halloween, Thanksgiving, Christmas, and New Years, mean big business. According to the National Retail Federation, retail sales in the US during 2019 exceeded $730 billion. Many companies rely on this increased demand at the end of the year to maintain profitability. Large retailers like Walmart, Target, and Tiffanies increase sales dramatically during this time of year, with some earning more than 30% of their annual sales in November and December alone.
Increased demand during the holidays for your goods or services will likely require extra hours from you and your employees. To help accommodate these extra hours, many businesses hire and fire seasonal employees every year. According to the US Bureau of Labor Statistics, retail stores laid off 683,000 seasonal workers after the 2019 holiday season.
While the holidays can wreak havoc on shipping times across America, your customers likely expect to receive their orders before Christmas. Carriers have already listed their cutoff dates below.
Retail Ground: Tuesday, December 15th, 2020
First Class Mail: Friday, December 18th, 2020
Priority Mail: Saturday, December 19th, 2020
Priority Mail Express: Wednesday, December 23rd, 2020
FedEx SmartPost: Wednesday, December 9th, 2020
FedEx Ground: Tuesday, December 15th, 2020
Home Delivery: Tuesday, December 15th, 2020
Express Saver: Monday, December 21st, 2020
2Day Services: Tuesday, December 22nd, 2020
Overnight Services: Wednesday, December 23rd, 2020
Ground: December 15th, 2020
3 Day Select: Monday, December 21st, 2020
2nd Day Air Services: Tuesday, December 22nd, 2020
Next Day Air Services: Wednesday, December 23rd, 2020
Now that you know some of the challenges you may face, let's explore how to solve them. Below are seven tips to prepare your small business to have a profitable holiday season.
Every religion, culture, and family celebrates the holidays differently. How your small business embraces the holidays should be equally diverse. Take the opportunity to do some brand work for your company and decide how you can use this time of year to stand out. Remember to put yourself in your customers' shoes and think about how to add value for them. From your communications to decorations, make sure you offer your customers an experience that meets their needs and stays true to who you want to be as a brand.
Your employees will play a vital role in carrying out your holiday plan. Be sure you are meeting their needs during this busy time. Start planning your staff's holiday schedule far in advance. You can start by determining your holiday hours and asking existing staff to complete any time off requests. Determine from there if you will need to hire any seasonal employees to meet extra demand.
Don't forget to share some holiday cheer with your employees. Consider throwing a holiday party, giving away prizes, or even sharing the holiday profits in the form of raises or bonuses at the end of the year. Keeping your employees happy will help keep your customers happy as well.
Once you set your staffing needs, take a look at your inventory. This is another area where planning ahead will be vital to your success. Work closely with your vendors, suppliers, and manufacturers to predict any increase in demand for your products. Make sure you get all orders in with enough time to receive extra inventory before the holiday demand begins to grow.
While most industries have consistently seen year-over-year increases in holiday spending, 2020 may be difficult to predict. The Coronavirus Pandemic has brought hardship to many families, and some small businesses will feel that this year. According to a survey of 1,000 consumers, 40% of shoppers anticipate spending less this year compared to last because of COVID-19 related concerns.
Even with consumer optimism waning, it is crucial to keep things fun and festive throughout your business. For your office and in-store displays, try getting the whole company involved in an after-hours decorating party. You can play your favorite holiday music, order food, and make quick work of it.
Make sure your online presence gets some holiday love, too. Spread the cheer on your social media accounts, and consider creating holiday-themed images and banners to share throughout your website.
Guide your brand's holiday aesthetics with a holiday-focused marketing campaign that connects the dots for your customers. This is where your brand identity and having the right team in place will really make a difference. Some of the most popular ways to help drive holiday sales include:
Running a social media contest or giveaway
Doing a Pay-Per-Click (PPC) advertising campaign
Sending out holiday-themed emails to new and existing customers
Offering holiday discounts (Black Friday Sales)
Giving customer rewards to encourage repeat business
Stepping out of your comfort zone with video marketing and hashtags
Keeping good records will be a huge timesaver when preparing for everything your business will need to anticipate for the holidays. No detail will be too small. From extra toilet paper for the bathrooms to creating branded gift cards for last-minute shoppers, write everything down. If this is your first holiday season as a business, reach out to your network, other owners in your industry or city who may be able to help.
One way to help you keep track of inventory and other bookkeeping is new business software. Making investments like this in your business will help promote future growth. Likewise, if you expect increased sales during the holidays, make some plans to allocate the extra cash flow. Creating a strategic investment in your inventory, training, or other tools will help make sure you are around for many years to come.
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