A Business Carol: Using the Ghosts of Past, Present and Future to Make for a Profitable Holiday Season
The parties, lights and smells of the holiday season probably seem like they’re far, far away. Given you just put up those beach chairs and sent the kids back to school, it’s safe to say they are. But as a business owner, if this isn’t your first holiday season, you know the time to prepare is now. Running a business during the holiday season is about as crazy as shopping on Black Friday. However, if you take the time to prep your business little by little months in advance, you’ll be able to sit back, enjoy a nice cup of cocoa and watch the holiday dollars come in.
If you’re on a mission to have a profitable holiday season, then we invite you to read one of our all-time favorite holiday stories: A Business Carol. Consider us your very own Jacob Marley, inviting you to learn how the ghosts of holidays past, present and yet to come can guide you to your most successful holiday season to date.
The Ghost of Holidays Past
The best and most resourceful way to start your holiday planning is to look back at how your business has approached and performed during previous seasons. If this is your business’ first season, reach out to similar companies in non-competing locations for their advice. Based on the prior figures, you’ll be able to see what worked, and what didn’t work, to help structure future plans. Here are important figures you need to calculate:
- How many employees did I have on staff? Was there a surplus or could I have used more help?
- How much inventory did I have on hand? Did I overorder or did I sell out of my most popular product?
- Did customers start holiday shopping earlier than expected? Should I get specific items on shelves earlier?
- Was my business open long enough? Should I plan to open earlier or stay later to meet demand?
- Did I have enough cash in the bank to cover all the costs? If I had had more cash, would I have been able to sell more (by hiring more people, buying more inventory, etc.)?
- How much did I spend on marketing? What did I do to get the word out? How well did these campaigns convert?
- What were my total sales?
All these numbers, and more, are important to your business. Be sure to nail down the exact numbers so you know you are working with the best data.
The Ghost of Holidays Present
After gathering all of this data, it’s useless if you don’t put it to work. Taking into account the above information, set yourself two targets:
- Who will my target audience be this holiday season? Is this the same or different from last year?
- What will my target holiday sales be? Is that the same or more than last year?
Once you’ve set your targets, you need to assess what it will take to accomplish those goals:
- How many extra employees (if any) should I bring on?
- How much inventory should I order?
- Are there any changes to my space or equipment needed?
- Do I need to change my business hours to meet demand?
- What marketing promotions should I try and how much will I spend?
- Will I have enough cash to cover all of these costs?
- How much total am I willing to budget for holiday efforts?
- Am I willing to take out money to increase my budget?
Once you’ve realized what you need to meet your goals, here’s how to put yourself on a clear path to finding that success:
Hiring Seasonal Employees
If you know you are going to need to hire extra employees to meet the holiday demand, the time to start is now. By starting the holiday recruitment process early, you are eliminating the burden of trying to recruit quickly, as well as giving yourself ample time to train employees before the rush hits. Not to mention, giving yourself some breathing room will allow you to get picky and be certain you are hiring the best of the best.
Take to the job boards now, A/B testing different job description copy and seeing which brings in the highest-qualified applicants. Once you’ve found a winner, send it to more job sites and start vetting your favorite hires. By the start of November, you should know who you are bringing on and begin training. This way, when Thanksgiving hits, you’ll have a team of well-trained, top-performing employees to help you successfully weather the holiday storm.
Once you’ve carefully assessed how much inventory you will need for the season, you should start reaching out to vendors. Remember, they get hit just as hard as you during this time. Let them know what your orders will be and ask them when you need to order the inventory to get it by your deadline. If you can pre-order and get it off your plate, even better.
Prepping Your Space and Equipment
You will also need to take a close look at your business space. If you are retail store, if you adjusted shelving would you be able to fit in more inventory? Or better display top-selling items?
If you’re in production, is there any equipment that requires maintenance? Or, if you upgraded your equipment could you increase your efficiency, allowing you to make more to sell?
Maybe it is simply that your warehouse needs to be organized to allow for faster shipping during the holidays, or that your retail space needs a fresh coat of paint to start the season. Whatever it is, now is the time to do it. As the holidays creep closer and many of your “to-dos” become “must-dos”, you’ll find prepping your space and equipment, despite their importance, loses priority.
Changing Your Business Hours
If you know you are going to have to change your business hours this year, get the word out now. Let current employees begin preparing for the changes and alert all potential employees during the application process. Be clear about what vacation-policy is during that time, so you are never accidentally left short-handed. Not to mention, you don’t want them feeling like Bob Cratchit.
Add the new hours to your website with a special alert for anyone who visits. If you have a mailing list, send them a notification a few weeks before the holiday rush starts. As well, be ready to change any of your online listings such as Yelp or Google, so customers that find you from the search engine get the most accurate data.
Planning holiday promotions can be tough. However, if you’ve had success with a promotion in the past, don’t try to reinvent the wheel. Make sure part of your marketing budget goes to proven strategies.
If you are planning on taking out ads for the holidays (which is a good idea), plan on buying ads now. The earlier you buy, the more you will save. If you wait until right before the holidays hit, you’ll have to shell out way more.
Try reaching out to other businesses in the same industry that don’t compete with you (they could be in another state, even). Just make sure their demographic matches yours. Ask them what they’ve tried in the past. Be inspired by their successes and failures.
Offering discounts is a great way to increase traffic. Just make sure, if you plan to extend these discounts, that you are still covering all your projected expenses. Remember, expenses will most likely go up for the holidays. As well, don’t forget that discounts are a marketing tool. If you don’t get the word out about them, what’s the point? Be sure, before you buy any ads, mail to your list or start putting in-store creative up, that you have solidified what those discounts are so you can publicize them on all your holiday marketing materials.
Budgeting and Cash Flow
The most difficult part about the holiday season is budgeting for the unexpected. That’s why it’s absolutely essential you work hard to put together the figures around the “ghost of holidays past” so you’re using as much hard evidence as possible to make your decisions.
If there are certain things you want to try this year, such as bringing on more staff, that you just don’t have the cash for, don’t be discouraged. First, think of ways you can get access to this cash internally. Are there invoices you could try to collect on early, perhaps providing customers with a discount for paying earlier? Are there items you could charge more for during the holidays, as they’re hard to find and in high demand?
If you can’t think of ways to get more cash in hand with your current resources, looking for financing options is your next best step. Perhaps you could look at new business credit cards? Or, it might be worth it to take out a short-term loan, or using some of your collateral, such as invoices, to help secure a cash advance.
You’ve got options. The best way to figure out which is right for you is to think about what a capital investment would allow you to accomplish this holiday season, and if it will enable you to make more than the cost of the loan, it very well may be worth it.
The Ghost of Holidays Yet to Come
If there is one thing we know in business, it’s that every year the holidays will come and go. It is a spike (or lull) in business we can predict. But, do yourself a favor, and make it easy for yourself to prep for the holidays each year. At the end of every holiday season, when it is fresh on your mind, take the time to jot down the answer to each of the questions asked about the ghost of holidays past. This will guarantee your numbers are as accurate as possible. As well, when you’re still in holiday-recovery mode, take the time to brainstorm a few ideas for next year. You’ll find that thinking again while still closely connected to the past will help you make the best decisions for your business. Just as Ebenezer Scrooge transformed by closely examining his past, present and future, your business can grow and improve every holiday season by doing so, too.
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