Once again, we blinked and we reached the end of the year. For some, end of the year means holiday, relaxation, family time. But for the rest of us, end of the year means the festive season shopping rush. We are entering the period of our business cycle where turnover surges, our employees get paid overtime, our stock levels need to be on all-time highs and our “family time” decreases.
There is no better way to enter the festive season as an entrepreneur, than excessive planning. You can never be over prepped for these few months of the year. Relooking at all the “hiccups” that occurred last year, you can review and analyze them and see where you can improve for the 2018 festive season rush.
As a whole, 2017 was much better in terms of consumer holiday spending than 2016 and analysts predict this pattern to continue in 2018. Total spending in December 2017 reached R51,659,835,959, that is up from R46,562,306,657 in December 2016.Number of point of sale transactions also was on the rise in December 2017, nearly up 7,000,000 from 2016 and on the single day when most transactions were made (23rd December), in 2017 there were a staggering 4,532,268 point of sale transactions.
This is a time of the year where small business owners need to capitalize and make sure that they are ready in all aspects of their business. Here are a few tips that can help you start planning for the festive season:
1. Create a Marketing Strategy
Since the festive season is not upon us yet, this provides a good enough period for small business owners to start strategizing about how they are going to market themselves during this time of year. Always put yourself in your customer’s shoes. How would you want to hear from your favourite business about their product offering for the festive season? Some sort of communication wishing them happy holidays? Maybe a promotion or sale? A free sample of your product? All of these, will add a personal touch to your existing customers and will sub-consciously out your brand in their minds when they will eventually go out and start shopping.
2. Sales and Promotions
This time of year, gives rise to the two days of the year that most consumers wait for. Black Friday and Cyber Monday. This is a great chance to get involved in promoting and discounting your products to give a value add to your existing customers as well as introduce potential customers to your product offering. If you have an existing client list, then send them the heads up and during these two days it is madness, so adding a personal touch like that can really help. Remember, all these sales are great, but you need to make profit as well so stay within your margin limit.
3. Website Checks & Maintenance
Whether your business is online or brick and mortar, most chances are you have a website. Either an informative website that describes what it is you do, some sort of product catalogue and contact information, or an online interactive website where customers can shop, chat and order either products or services from you. You need to make sure that EVERYTHING works. If you outsourced your website development, then check in advance so you can fix if anything is wrong. E-commerce and online sales have surged over the past year. Research is shown that out of the active shopping consumer market in South Africa, 25% shop online. It is highly advisable that your website will not crash during these holidays as there will be a spike in traffic on your servers. Check all tabs are running properly, all information is accurate and that all payments portals and shipping instruction is in order.
4. Stock & Inventory
Consumer spending in 2017 increased by 3.8% from previous year. That translates to a forecasted increase that will occur in 2018 and business owners need to be prepared for it. We understand that purchasing stock can really hurt cashflow and minimal stock levels are the most viable option when it comes to operating a business, but always be well stocked for the month of December. If your stock is non-perishable, then over stocking is a must because if you run out of stock then you cannot reach your optimal turnover. If you dealing with perishable stock, then best thing to do is revisit sales reports for the previous year and see what sold the most during this season. Most chances are that if you are situated in a shopping mall, the same crowd that came last year will come this year because of socioeconomic, demographic and geographic aspects.
5. Preparing your Staff
With all the religious and public holidays happening in December, we highly recommend that every business owner should sit with all of his/hers staff and make sure that the calendar is set in stone in terms of operating hours and dates. Every staff member needs to know well in advance the hours and responsibility that is expected from them. The more information and planning, the less confusion and disappointment.
There is no right or wrong way to approach this festive season, but whichever way you chose, preparing for it can only help. Analysts are expecting December 2018 to surpass 2017, so best thing to do is be well equipped for it, and that way, as spending increases, so does your turnover and profitability.