As the season grows colder and the sun sets earlier in the evening, retail businesses are getting geared up for their biggest time of year—the holidays. In addition to preparing for winter or seasonal traffic hikes (both foot and web), small businesses are also reviewing last years’ budget and setting financial goals for the first quarter of the New Year.
Many retailers know the secret to being successful during the winter season is to be prepared. This means that the majority of you have already ordered enough inventory to cover you until year-end. While this is the most important first step towards conquering the peak season, there are still other things to organize or prepare for before autumn ends.
Are you ready for the end of the year? Take a look at these tips to help you manage the coming months and what you can do to prepare for the winter season.
Seasonal staffing: Does your shop need some seasonal help to handle the influx of customers? Or do you need to fully book your existing staff to make way for the busy season? Plan out your expected staffing requirements and if you will need to hire on some additional help. Ask your part-timers whether they are interested in taking more shifts around the holidays before you go ahead and hire anyone so you don’t have to recruit unless necessary.
Holiday Hours and Schedule: When the holiday season comes around, you should expect that your staff will want to take some time off. Is your business going to remain open for its usual hours? Are you going to extend shopping hours leading up to Christmas? Prepare a schedule of the next three months and start to determine when you will be open, or if you will be closed, when, and for how long.
Holiday Bonuses and Events: It’s never too early to plan for the end of the year with a seasonal party for your staff, or if you will be handing out Christmas bonuses to employees. Budget for bonuses or other incentives, such as Christmas gifts or event budgets, as this may be a cost you had not anticipated. Set aside some funds for your staff to plan a seasonal activity.
Employee/Performance Reviews: The end of the year also signals that your staff will undergo annual performance reviews. If your company does not yet do this, maybe it’s time to collect feedback on your business, as well as discuss employee progress, in order to improve the company and employee satisfaction.
Staffing Forecast for the New Year: Do you plan to expand your staff in the New Year? Does your budget allow for it? Are there areas that you could use additional personnel? Asking yourself these questions will force you to decide whether staffing up is in your business’s future plans.
Winterization: Do you need to physically prepare your brick-and-mortar store for the cold season? Is this your responsibility or that of the building manager? For example, the property may need its heaters checked before the temperature dips. Make sure the building is in top shape before winter, or refer to your commercial lease to see if you need to take care of any outdoor maintenance. Winterization is important for the safety of you, your employees, and your customers. This extends to not only your business, but also to the sidewalks, and parking lot of your establishment.
Merchandising: Retail stores, and even e-commerce websites, need to remain competitive during the busy season, and for this reason, many deck out their window displays, personalize their social media photos, and even customize on-site elements for the holidays using warm, inviting, and seasonal themes to evoke a sense of holiday spirit and to encourage visitors to shop.
Forecast for New Year: Are you renting or do you own a commercial space? Do you intend to expand in the future? What kind of improvements are needed next year? Consider your surroundings and whether you have the income to expand office/floor space. Evaluate your location, lease, and the rent you are paying to determine your next steps.
Anyone who has worked in retail knows the end of the year is the busiest time for sales, and accounts for about one fifth of a retail store’s annual income. Not only are the holidays abundant at the end of the year, but people are also out shopping and socializing with friends and family.
Marketing Campaigns: Seasonal marketing campaigns should be on the forefront of your mind. There is intense competition around the holidays, and many stores plan their marketing to-dos well in advance. From when inventory will go out and how it will be displayed, to putting out signs, holding contests, and participating in seasonal events, small businesses should have a timeline for each month based off of consumer behavior.
Holiday Sales/Discounts: Like marketing campaigns, sales events play into promotional planning. Generally, the end of August is the time to plan sales to relieve yourself of summer inventory and make room for fall products. September to November is the time when consumers plan their holiday budgets, brainstorm gift ideas, and begin comparison shopping. Appeal to these customers by offering options and discounts on the products you need moved to make way for the last minute gift options in December. For example, many shops will put out their holiday cards early because they know that consumers need to be able to send them in advance. Once December hits, cards are marked down for clearance, but gift wrap sales increase during this time, which might be when you wish to offer a promotion like “buy two rolls of wrapping paper, get one free” so you’re offering a discount, but selling more.
Seasonal Policies: Establish in-store policies ahead of time, including return and exchange policies for gift items. Some retailers will let their customers know that no items can be returned on Boxing Day to avoid having to deal with returned items on one of the busiest days of the year. Other policies you may want to make known are shipping dates and times, especially if you have a retail or ecommerce website.
Other Services: Will your store offer gift wrapping services? Do you have a list of recommendations you can make for services that are outside of your expertise, like restaurants, flower shops, event venues, etc.? Are you planning to send out customer/vendor appreciation holiday cards? These are things you might not always think of, but should be prepared for anyway.
Forecast for New Year: Retailers are used to the slow period following Christmas and generally, this is the time to try and clear all of your holiday items before storing them away, bringing out new stock, and conducting spring cleaning. Was your marketing effective this year? What worked and what didn’t? What would you do differently? Make a list of promotions that lent well to the holidays, and those that didn’t, so you can adjust your sails next year. Were you overburdened with an influx of product this year? If so, do you need to adjust your purchase orders next year?
Of course, the end of the calendar year also means a financial analysis for businesses. Everything from cash flow statements and reviewing last years’ profit and losses and goals, to projecting year-end sales, organizing yourself and your business for the following tax year, and setting goals for next.
Taxes: It’s never too early to start organizing your records for tax purposes.
Profit and Losses: Review your revenues and debts from the past accounting period. Look at your cash flow statement, balance sheet, and income statement. Analyze your business’s performance over the past year, and decide whether you need to revise your spending. Are there any areas that are in operations, investing, or financials that you need to adjust? Meet with your accountant to discuss your financials and set out a budget for the next accounting year.
Setting out Goals for the Next Year: Based off of your financial analysis and income statements, which areas could use some tinkering? Do you need to make cuts? Are there areas that you could expand into? Looking at your goals from last year, did you accomplish what you set out to do?
When preparing your new goals, review your business plan and revise your goals to match your current situation, as well as prepare a plan and a budget for completing these goals.
A Happy Holiday for Small Business Retailers
Every year, consumers witness retailers swing from back-to-school products in August, to Halloween, Thanksgiving, and Christmas in no time at all.
As the year comes to a close, every retail business will need to prepare and buckle down for the busy season, which means managing every aspect of their business, from staffing and office space to the marketing and merchandising of their products so they can successfully ride the rush into the New Year.
What does your retail business do to prepare for year-end?