Tips for preparing your small business for the holidays
Key takeaways
- Planning ahead and creating a strategy is key for small businesses to successfully navigate the holiday season and attract customers
- Using social media can greatly increase traffic and sales for small businesses during the holiday season
- Plan for the possibility of low inventory, cash or labor until the holiday sales come in
- Small businesses can take advantage of various forms of financing, such as small business loans and invoice factoring, to help cover expenses during the holiday season
The temperature is dropping; leaves are changing color and seasonal flavors are lining the grocery shelves and filling coffee shop menus. And holiday shoppers are out buying decorations, gifts and goodies to fit the season.
The holidays are a prime time for your small business. Adobe estimates that the holiday shopping season from November to December will bring in $221.8 billion in sales.
Yet attracting new customers isn’t as simple as opening your doors and hoping to draw customers in. You need a plan in order to effectively handle the holiday rush and propel business growth in a long-lasting way. To help prepare for prime shopping events like Black Friday, Small Business Saturday and Cyber Monday, let’s take a look at some steps to follow.
Create a plan
Knowing how to promote your business for the holidays starts with planning the day. Ask yourself what your competitors are doing for the holidays and how you can plan similar sales or activities. You should also brainstorm how you can set your store apart from the rest, such as running a giveaway or planning a local event.
Keep in mind that some shoppers will enjoy extra activities, especially on Small Business Saturday. Others, like Cyber Monday shoppers just want to find the best sale or get their holiday shopping done as quickly as possible.
To that end, you may want to offer a sale on some items. The exact sale you choose will differ by your type of business, but could include:
- Buy one, get one free
- Buy one, get one 50% off
- Free gift with a purchase of $50
- A percentage off the regular price
- Enter a giveaway
Take advantage of social media
Using social media can help increase traffic and sales. When you regularly post on social media, you have the chance to increase awareness of your store and your brand. You also get to engage with potential customers who can interact with your posts and share with their friends and family.
The work you put into maintaining a strong social media presence can generate sales. According to Mintel’s 2023 US Social Commerce Market Report, 47 percent of people surveyed have bought products on social media. These customers may also be inspired by social media to buy products from your store. Bankrate’s social media survey shows that 48 percent of users bought an item inspired by social media.
Stock up on inventory and supplies
You want to be prepared for the holiday rushes that may come upon you, so be aware of major holidays in which shoppers might flock to your store. Then, order plenty of inventory ahead of time so that you don’t run short on product or raw materials to make products.
This is a good time to check sales from previous years and estimate the growth in sales that you might see this year. If you’re a startup, you may want to look at sales from other similar businesses to forecast your own holiday sales.
Be festive
Many customers love getting into the holiday spirit, and nothing says holiday cheer more than festive decorations or seasonal scents. Think about the little touches that make the holiday experience sweeter for your customers. You could run a contest related to your business, such as a kids’ baking or art contest. Most businesses will put their holiday displays front and center, so plan a storefront display that adds fun or brings out smiles.
Some local business districts will get together to display decorations in the surrounding area. For example, local businesses might collaborate to each sponsor and decorate a Christmas tree and display it through the town.
Plan for labor shortages
While you’re making a plan for your holiday rushes, consider what you might do if your employees decide to quit. According to the U.S. Chamber of Commerce, 3.5 million people left their employers in August this year.
You may want to hire seasonal workers to heighten the customer service experience for the holidays. Some businesses hire jolly door greeters dressed in seasonal clothes.
You can also show these seasonal workers how to perform other tasks so that you can use them to fill in for other employees if needed. They can help in a pinch if employees need a sick day or do end up leaving.
Plan for how to pay for holiday expenses
You may see that the holiday masses are coming your way, but perhaps you don’t have a game plan because you lack the cash to buy added holiday supplies. Getting outside funding can be a help to your business in this situation.
Here are some types of small business financing that can help you get through the holiday season:
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A small business loan provide a lump sum of money to apply toward upcoming holiday expenses. Since you’re borrowing the money, you’ll need to repay the amount with interest and other loan fees. Business loans have a specific time period for repaying the loan, called a repayment term. Short term loans can go up to two years, but long-term loans have repayment terms of five or more years.
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A business line of credit is the revolving door of business loans. It allows you to pull money from your approved amount of credit. If you need more in the future, you can borrow up to the approved limit. It’s wise to pay back past loans from your credit line before drawing more money — unless you have a plan to pay multiple loans back. You don’t want to get stuck in a cycle of debt which can land your business in financial trouble if sales take a downturn.
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When you apply for a business credit card, you’re essentially getting a small loan that you can draw from at any time, up to the borrowing limit. Once you make a purchase, you’ll receive a bill at the next billing cycle to either make a minimum payment or pay in full. If you consistently pay in full, you can avoid any interest charges. Business credit cards give you added benefits of building credit and earning rewards for purchases.
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Invoice financing is an alternative form of business funding that advances you money from your unpaid invoices. The financing company lends you up to 90 percent of the total invoices, and you pay them back when clients satisfy their invoice. Invoice factoring takes this a step further, buying your invoices and collecting the payment for you.
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For businesses that sell custom products or fulfill a customer’s purchase order, you could keep your estimates conservative. If you get an especially large order, you could choose to use purchase order financing to help you fill the order. With this type of financing, the financing company pays your suppliers for product, then it takes customer payments directly. It pays you the leftover amount after fees. While you don’t want to use this financing all the time, it could help you get through this first holiday season.
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A merchant cash advance (MCA) allows you to advance money based on your business’s credit or debit card sales. MCAs typically approve businesses with lower credit scores or low revenue. They’re technically not a traditional business loan, so MCAs don’t follow commercial lending laws that prevent them from charging high interest rates. For that reason, MCAs can have rates of 100 percent or higher, making it an expensive loan option. If you are unable to secure a more affordable loan, consider an MCA if you have debit or credit card sales and if you’re in a tight financial spot prepping for the holidays.
Bottom line
Holiday shoppers may be eager to shop seasonal products or at least get through their holiday shopping list. You can make their shopping experience brighter by adding the little touches of holiday cheer — and by offering an enticing sale that shoppers can’t pass up.
Frequently asked questions
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Because shoppers are already gearing to buy for the holidays, the season is a great time to make customers aware of your brand and grow the business. To grow your business over the holidays:<br /><br />
- Post regularly on social media
- Run holiday marketing campaigns locally or on social media
- Plan holiday activities, events or decorations
- Add your business to American Express’s small business map
- Collaborate with other small businesses for sales
- Choose the sales and items your customers will find attractive
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To attract customers to your small business:
- Build a social media following
- Rent a local billboard
- Use local advertising, such as mailers
- Prioritize customer service, including social media
- Brand your business with a logo and consistent messaging
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The best form of marketing will depend on your business. For example, if you make handcrafted products, your business might do marketing with an Etsy shop. You could market your business the traditional way through TV ads, and social media is also a popular spot for marketing. You can also try direct mail or email marketing sent straight to your customers’ homes. Whatever marketing channel you choose, you want a channel where many of your customers go.
