The holiday season is upon us. You’ve prepped all your inventory, you’ve done your staff rota, your seasonal advertisements are printed. Now it’s time to roll up your sleeves and dig in.
Here are our top tips to come out the other side of the holiday season profitable and ready for the New Year.
‘Tis the season to be jolly well good at marketing
The holiday season is a great time to try and capture customer details and add to your marketing database. Whether a local or national company, whether bricks and mortar or online, the holiday season is a great time to capture prospect information for marketing purposes. Whether that’s business card entry to a voucher raffle, or signing customers up to your loyalty scheme, offering email receipts so you can market via email, get collecting customer data for marketing for 2017. If you haven’t already, this is the time to be thinking about a content marketing strategy for next year. Just because you’re local, doesn’t mean you can’t think big, and market widely. If you’re a B2B business, don’t think that this doesn’t apply to you too. Social media is for everyone.
Is your fulfilment a fulfilling experience?
Ensure your fulfilment process is totally optimised. With postal services offering customers long delays over the holiday period, encourage your customers to buy from you by offering lots of convenient fulfilment options. Do you offer a click-and-collect service via your eCommerce site? Do you offer a ‘buy now, collect later in the day’ option to customers at your checkout counter? Let customer’s experience convenience by putting yourself out for them.
Manage your cash flow
Cash flow is king. Managing it is done in two ways: reducing operational cost and increasing sales. Nothing new for most entrepreneurs there. But in all the fuss of the festive season, with the chaos that ensues, there are several strategies you can employ to ensure you optimise your cash flow.
- What sells well, may not sell well again.
Based on last year’s sales or your best estimates, you have selected and ordered enough inventory to see you through the holiday season. For whatever reason, during the next few weeks, some festive product is powering through sales, and you are tempted to restock it before Christmas day. Balance the risk of this against having excess inventory, your average fulfilment times, the shelf life of the product and how close you are to December 25th. If you have doubts about a subsequent order being able to fly off the shelves as fast, then be wary of ordering it in again. The last thing you want is a few thousands euros worth of Christmas-themed cakes still on your shelf by December 24th. If you think the product has an appeal even after the holidays or can be combined with special promotions to shift it faster, it may be less risky.
- New year, new terms
It’s competitive out there, and it’s a good idea to start your new year off optimally if you can. Suppliers are constantly scouting for new business, but they also know the value in retention of existing customers who may stay with them long term, so get in there and negotiate better terms for your business if you can. Longer credit terms, sale-or-return, smaller more frequent deliveries, smaller wholesale quantities (if you need them), higher quality for the same price – look for as many avenues for negotiation as possible and try to nail down a better deal for your business in 2017.
If you are a B2B business you might want to look at fine tuning your pricing, speeding up your invoicing process and introducing incentives for early payments and penalties for late payments. For example, you might introduce discounts for early payments but late payment fees for neglected accounts.
- Review your outgoings
No matter how good your sales forecasts for the holiday season and New Year are, you need to be able to keep the lights on and the doors open in order to collect that revenue. Most businesses take on extra staff to cover the busy holiday season which is only increasing your wages bill. So review all the small stuff that can add up to a big bill. Prioritize your outgoings and for those that are non-essential, try to find better deals or see if you can live without them. Your money might be better invested in marketing or promotions to bring customers through the door.
- Re-evaluate your pricing strategy and revenue streams
Holiday season often sees increases in prices, in order to discount legally in the January sales. However, now is the time to consider reviewing your pricing strategy for the coming year. How has your business been doing? If it’s been doing well, it might be time to consider how your products and your brand are doing compared to other competitors in your locality. If you have a good reputation, and are seeing lots of repeat customers you might consider increasing your prices. If you are considering lowering your prices, be wary of sacrificing the perception of quality in order to sell cheaply in the hope of increased sales. This only ends up cannibalising your revenues.
Another thing to consider if you are in the service industry is whether there are any other services or skills you can monetize. Service and goods industries can all do well from creating new revenue streams. If you are selling goods, look into new product lines, after you have done some market research and a trial run of the product.
- Clear out your excess inventory
Customers love multi-buys and there’s no better way to clear out your excess inventory than making a profit and seeing lots of inventory walk out the door. If you’re not sure that can afford to run a multi-buy offer, ensure that you calculate in the cost of storage of the goods as well as the money you have tied up in them. They may be just sitting in your back room, but that could be hindering you from ordering more sellable merchandise.
- Select some tools and analytics for next year
There are lots of ways technology can assist small businesses. Do some research to find out what free or low cost tools can assist you for next year. Make 2017 the year when technology will work for you and not against you. Over the holiday season try to capture some data on your sales in order to be able to run analytics for the Christmas period next year. Knowledge is power in business. With analytics you can make better choices, informed decisions and possibly lower your operational costs by automating some of the tasks for that small business. An example of a tool you could look into for next year is Slack which is a versatile messaging app that facilitates teamwork, allows files including images and PDFs to be shared and allows group calls among other features. Big Red Cloud is another useful tool to consider getting for next year in order to make your day-to-day accounting painless.