In November, National Small Business Month kicked off with shocking news: Small businesses struggle to compete with big brands. In fact, “nearly half of small business owners say they find holiday advertising and marketing overwhelming,” according to a recent survey.
Don’t be one of those small business owners. Instead, read on for five tips to help your small business survive the holiday season without falling into the trap.
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Find out where your money Is going.
Shopping for gifts is just as much about giving – showing your loved ones that you care about them enough to get them something special – as it is about receiving. But there is a big difference between being on the giving end and being on the receiving end. The spirit of giving is a beautiful thing, but it can also lead to some seriously over-spending. In fact, according to the National Retail Federation, merchants are expected to see an increase in holiday sales of 4.5 per cent this year.
Don’t compete with big brands by spending big bucks on holiday advertising.
Instead, consider 3PL Kitting Services(a good example is Rakuten SL) as a way to increase sales. Many small business owners underestimate the amount of work involved in shipping and packing items for shipment. The prospect of spending hours on end preparing orders that won’t be paid out until after the holiday sales rush can be a drain on any small business owner’s morale. Partnering with a 3PL provider offering Kitting Services can relieve some of that burden on a small business owner’s time and bottom line.
Stop the bleeding. Try to maintain your current profit levels throughout December and January rather than losing money. It is easier said than done, but you will have a better chance of surviving February and March if you can keep your cash flow going on an even keel throughout the holiday season.
Keep it simple
Running a small business comes with a lot of pressure to do more, do better and do it all yourself. But when it comes to your company’s financial health, there’s no need to be a jack-of-all-trades. “Don’t take on too much,” says Katie Weitz, chief executive and founder of Rakuten, the #1 subscription box fulfilment centre. “When you’re starting out, it’s easy to take on every job and want to know everything about the business. But really, you can focus on one or two things that you’re really good at—and still be successful.”
The key is to put your energy into what you do best. That way you have time to grow your business, make smart hires and work on your company’s growth strategy. It also frees up downtime so you can devote time to your family or tackle other personal goals—all while making sure your business is on the right track.
Create a budget and stick to it
While business is booming over the holiday season, so are your expenses. It’s essential to create a realistic budget to plan for your increased expenses during the holiday season. Make sure you take into consideration any extra expenses you may accrue. Be realistic and don’t spend more than you need to. To ensure that you will stick to your budget, it is best that you have a financial tool such as business expense tracker that will monitor and track your expenses.
Have a game plan already prepared
If you’re planning to prepare for the holiday, Ensure that you have your payment systems to collect payments from customers the moment you are ready to ship the goods. Most people pay by credit cards or Paypal, but if you allow cash on delivery, many customers prefer this option.
Creating an annual discount campaign is an excellent way of cash flow management. For example, as a small business, you can decide to offer a 30% discount on all winter products or only a 50% discount on specific products so you can easily calculate how much cash you will be receiving and how much you’ll need to spend before the New Year holidays. This can also be an incentive for the customers to start purchasing your goods before the holidays.
Restrict Business Spending
A straightforward way to avoid a cash crunch is to keep your spending low. Rather than focusing your efforts on boosting sales, try to prevent your expenses from increasing too much. For example, perhaps you could hire a team member instead of buying more inventory or ordering more supplies. As another example, you could send out helpful information and advice via email or social media instead of expensive advertising campaigns.
Prepare an exceptional product line-up only offered during the holidays.
There are many products you can offer as holiday specials only. You may even want to offer a unique product line-up only during the holidays. Customers love new products, and it will help you generate buzz about your business. Create a product list of possible items or have an outside designer well-versed in product design and pricing help you offer the perfect holiday-only special items.
. ● If you are offering a discount, make sure it’s attractive. Offer a special promotion package that includes free shipping and additional incentives like a free product or gift with purchase, so your customers will come back for more throughout the year.
● Use price promotions and product sales to upsell. For example, if you’re running a holiday sale on one product line, include other related items for sale to expand your sales reach.
Set Your Goal
As an owner, you need to be a big proponent of saving money and controlling spending — no matter how busy you are during the holiday season. Make a financial plan and stick to it. If you don’t have a plan in place, one of the easiest ways to avoid a cash crunch is to make sure that you stick with your budget from the start of the year. If you already have a plan in place, this is your chance to make sure that you’ll stick to your plan! Set a savings goal for the holiday season today.
As a small business owner, it can be easy to go from working in your store all day long to trying to take care of it from your own home. To make sure you stay on top of things during the holiday season, bring in some extra help such as a freelancer or temporary staff member who can help run errands, answer phones and assist with wrapping gifts when business is flowing strong.