With the holidays right around the corner, shoppers are getting their pockets ready to cash out. According to CNN, Retail sales for the combined November-December shopping months will grow between 6% and 8% this year compared with the 2021 holiday season, to between $942.6 billion and $960.4 billion, according to projections released Thursday from the National Retail Federation, the industry’s largest trade group.
Although consumers are feeling the pressure of inflation and higher prices, households in various income brackets are responding differently to how their budgets are impacted, NRF president and CEO Matthew Shay said in a statement, but consumers overall remain resilient and continue to spend.
Business owners have kicked off the holiday season early this year in hopes of extending this “money spending” time.
Small Business Saturday
Small business Saturday is one of the most popular holidays in the small business world. This is because it opens many doors for small business.
It encourages consumers to shop locally in person and online at small businesses.
American Express cares deeply about thriving communities and believes small businesses are at the core of every thriving neighborhood. That’s why — in the midst of the recession in 2010 — they created Small Business Saturday® on the Saturday after Thanksgiving to encourage people to Shop Small and bring more holiday shopping to small businesses.
In 2020 alone, American Express spent approximately $200 million on initiatives to support small businesses around the globe. In terms of what constitutes a small business, the U.S. Small Business Administration (SBA) offers a broad definition: generally any business that has fewer than 500 employees.
Following those guidelines, Small Business Saturday could include businesses that operate as sole proprietorships and partnerships, as well as small corporations and/or limited liability companies (LLCs).
How to Prepare for Holiday Season
There are four key concepts you should take into consideration when preparing for the holidays.
- Working Capital
- Equipment and Inventory
- Operating Expenses
- Marketing
Working capital affects many aspects of your business, from paying your employees and vendors to keeping the lights on and planning for sustainable long-term growth. In short, working capital is the money available to meet your current, short-term obligations.
It is very important for any business to have a proper inventory management system. By keeping track of all your supplies and determining the exact price, you will be able to keep track of all your expenses.
In addition, it can assist you in managing changes in demand without compromising customer service or product quality. A business’s operating expenses are necessary to keep it running, and they can almost never be avoided. Nevertheless, you have control over your operating costs.
These expenses are typically tracked in income statements by companies. Revenue, expenses, profits, and losses are reflected on income statements over time. Marketing also has a large impact when it comes to your business. Especially, during the holidays.
You should come up with a marketing strategy to be able to attract consumers and customers to your business. Holiday marketing is one of the most attractive and demanding type of marketing as there is so much competition. Engaging your customer will attract a larger audience and evidentially increase your sales.
How the Holidays Impact your Business
The holidays are considered the most expensive time of the year. Days like Black Friday, Small Business Sunday , Christmas Sales and New Year events are all the rage. This time of year is considered a time of growth and opportunity, especially in a small business. Business owners say that 40% of sales revenue is generated in this time of the year.
Swyftfillings says that The projected expenditures by buyers for gifts, non-gift holiday purchases, and other non-gift purchases during the holidays are equivalent to $1,008 per person. This is the time to be proactive and attract new customers to your business and provide incentives to have them return after the holiday season.
There are primarily 3 ways the holiday can affect your small business
- Changes in Revenue
- New Marketing Needs
- Increased Competition
Depending on your industry revenue can peak and reach all time highs or it can hit a low point. That is why it is important to identify what kind of industry you are in and know if this is a time for additional funding or investing. A rise in revenue is great but a sudden surge can be very damaging to the business model.
Marketing is a huge role in the holiday season as you are able to target your audience in a more captivating way by incorporating holiday themes and seasonal messages. Gift cards and certificates market as ways to reach new customers.
The holidays also open doors to lots of competition. Everyone is focusing on cashing in on holiday profits . This is what we like to call the “holiday rush”. Finding what makes you different will help you stand out amongst your competitors.
When things don’t go as expected
Not all industries benefit from the holiday rage. During the holidays, you need to think about the demands of the industry. While some businesses boom during this period, others experience a dry spell and would be better off closed. According to Blue Sky Local, 61% of restaurants see a decline in customers.
There is no doubt that the current economy is affecting how customers shop. This is when many business look to additional or alternative funding and secure a sufficient working capital. During the holidays, it may be a necessity to have capital readily available in order to increase advertising or marketing strategies.
Also, many companies feel the need to hire additional staff during the holiday season due to extended operating hours. Lenders like Mainroad Capital have reasonable interest rates and repayment terms, as well as quick turnarounds from approval to funding. Our funding turnaround is as quick as within 24 hours.
It is very simple and easy to apply. All you have to do is fill out our quick application and one of our agents will contact you. We will be able to get you the funding you need!
The holidays can be a scary and nerve-wracking time for small business but they also can drive you to success. You got this!
