By
Stuart Blake, BlueVine
Every
year, America’s 30 million small businesses work incredibly hard to earn their
slice of the $700 billion+ holiday season sales pie.
With issues like tariffs, growing competition from e-Commerce giants, and not
to mention a potential recession that has 80% of small business owners
concerned, it’s critical that small retailers start preparing for the holiday
rush well before temperatures begin to drop.
I’ve
worked closely with hundreds of business owners for more than a decade during
the holiday shopping season to ensure they’re setting themselves up for
success. Over the years, I’ve noticed a few recurring challenges they can
overlook in the flurry of preparations, including inventory, staffing and
overall financial health. Let’s explore these three areas and what steps
retailers can take now to make certain they are in the best position for a
successful 2019 holiday shopping season.
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Review Last Year’s “Wish List”
In
the last 10 years, retailers have seen year-over-year holiday sales
increases annually. If 2019 follows history, Americans will be emptying shelves
to stuff stockings and gift loved ones presents at a higher rate than before.
For retailers, this is an opportunity to offer core products that customers
have grown to love and add new products to capture customers’ attention and
further increase revenue.
A
good starting point to keeping your shelves fully stocked is looking at
historical data from the previous holiday season and other peak sales moments
this year, and identify what was popular, what collected dust on shelves and if
any specific items were a surprise hit. With just a few short months until the
season, retailers should start analyzing this data now to ensure they have the
resources they need to bulk up on inventory. If cash flow is looking a bit
tight, business owners should seek out flexible working capital now to afford
any necessary stock-ups.
Stock Up On Extra Help
Santa
doesn’t do the holiday season alone, and neither should you. It’s common for
retailers to make temporary hires to help with customer service, security,
stocking shelves and manage an increase in store traffic. Of course, bringing
on temporary staff comes at a cost.
With
the added challenges of extended hours and an influx in time-off requests,
employers need to map out the proper staffing mix to cover all shifts, identify
how payroll expenses will be impacted and plan accordingly now.
Check Your Financials Twice
At
the start of the year, many businesses make a list of business goals and plans
for the year — and now is the time to “check it twice.” Most importantly, when adjusting
for the Q4 shopping season, it’s important to evaluate the overall financial
health of the business and evaluate if you’ll need financing to meet the demand
of the season.
In
addition to things like inventory and staff planning, retailers should always
plan for a few unexpected expenses to arise. Take the weather, for example. If
you have a store, a critical supplier or ship to customers located in the
northern region of the country, you’ll likely be impacted by rough winter
conditions. Be sure to account for the cost of services (like snow removal) and
customer solutions (like rush delivery) to protect against major business
disruptions when bad weather hits.
A
good rule of thumb when it comes to financing a small business is to always
have at least one month of capital on hand for the unexpected. Retailers who
are not in a position to do this should consider a flexible line of credit that
provides them with cash flow cushion on an as-needed basis.
During
the holidays, the pressure is on for retailers to increase sales and offer
consumers products that will be a hit under the tree this year. But being
prepared is key for a successful year. Keep in mind these tips when planning
your holiday strategy and consider securing working capital now before any
challenges arise to make sure you’re one step ahead of any unforeseen
circumstances.
Stuart
Blake grew up in a family of small businesses owners in New Jersey. As vice
president of sales and customer success at BlueVine,
a leading provider of working capital financing to small and medium sized
businesses, he is driven to help small businesses grow and flourish.
