The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.
Despite inflation and other economic headwinds, 2022 holiday commerce is looking bright. Deloitte is projecting a 4 to 6 percent increase in retail sales compared to the 2021 holiday season. The predicted surge is even larger for e-commerce: 12.8 to 14.3 percent.
As a small business owner, it’s important to prepare for the holiday boom in sales. Create an assertive plan that may account for greater capital output, short-term debt and potential inventory shortages due to supply chain issues. Collect past years’ holiday sales numbers to use as the benchmark to beat. A hot winter is ahead.
5 tips for managing your small business during the holidays
Ramped-up holiday spending is the perfect opportunity to make up for any dips in revenue earlier in the year. By planning well, you may even exceed your sales goals. Here are five tips to quickly pave your path to success.
1. Set goals
Use Small Business Saturday as a marker. This national holiday, founded by American Express and co-sponsored by the Small Business Administration, celebrates America’s small businesses. This year, nearly 6 in 10 holiday shoppers plan to participate in Small Business Saturday, according to a Bankrate survey—even more than those who plan to shop on Black Friday. Small Business Saturday lands on the Saturday after Thanksgiving, and in 2022, that’s Nov. 26. Make preparing for that date your primary target.
Tony Whatley, the founder of 365 Driven, a community for entrepreneurs, says prepping for Small Business Saturday puts you in future-thinking mode. “It’s an important date because it gets people focused on deals and opportunities. It’s a way to test your processes and fulfillment. If you can achieve greater sales one day, why not 365 days? Setting records establishes momentum for the new year.”
Also, review 2021’s holiday sales and then go back a few years further. If your business existed in 2020 and 2019, get those numbers. You want to use them as the figures to exceed.
“Every business should be thinking about growth,” says Whatley. “If you’re not evolving, you’re dying. Look back on historical data as a benchmark. Those numbers never lie. You should always be trying to improve.”
2. Stock up on inventory
Unless your business is strictly service-oriented, inventory plays a crucial role. The last thing you want to do is run out of the supplies needed to fulfill orders. Concentrate on how you will manage to stock up while also keeping your spending under control—and use a small-business credit card to earn rewards on your purchases if it makes sense to do so.
Unfortunately, supply chain problems have plagued a wide range of businesses in recent years. Though it’s generally better in 2022 than the previous two years, some industries are still behind. If you can’t get the ingredients, machinery or supplies you need in time, you may have to get creative.
‘The shortage of desirable products will drive prices higher,” says Whatley. “Consumers will be looking for availability, so that may be most important for you. Historically, Small Business Saturdays were designed for retailers to deplete inventory, but the game has changed. Now people just want things, even if the prices are higher. If you know that and can source what people most want, that they must have no matter what, you’re good.”
Also, keep in mind where the products are coming from, and that you want customers to return after the holidays. Supply chain issues may continue to be haphazard for months or even years. Not only can you win shoppers over with great service, says Whatley, but also with items produced locally or within the country since they won’t get held up at the port.
3. Create a marketing plan
Marketing puts your product in the public eye, so strategize.
If you don’t have a solid social media presence now, devote energy to developing that immediately, says Maleeka Hollaway, an Atlanta-based publicist and owner of TheOMGBiz. With simple and easy-to-create images and videos, you can reach an astonishing number of new customers.
“Wherever your target audience resides online, your presence there should be amplified times 10 from now until the new year,” says Hollaway. “Pinterest, Instagram and TikTok allow you to be wildly creative in showcasing what your business has to offer. And the shelf life of a post on those platforms can grant you additional exposure and sales even after the holiday season.”
There are lots of ways to get in front of new customers, including springing for Facebook and Google ads, as well as scouring sites journalists use to find information and experts. “Pay attention to Help a Reporter postings and get your business featured in holiday round-up articles,” says Hollaway. “There are media platforms still looking to solidify listicles for gift-giving.”
If you don’t have time to manage your marketing campaign, hire out. A public relations professional can guide you to the most effective advertising and media strategy. Their job is to get you noticed, which will increase sales. For budget-friendly social media management, connect with college students going on break who want to gain work experience. Most are social media pros, and the price may be right.
4. Open and optimize online storefront
If you haven’t already, explore online storefronts and e-commerce platforms—even if you have a physical storefront already. COVID safety remains an ongoing issue for many consumers, and other shoppers have discovered that it’s more convenient to hit the “buy” button rather than finding parking, standing in long lines and spending excess time in stores and malls.
Nicki Pomije, the owner of Minnesota-based The Cookie Cups, went digital during the pandemic. “The pandemic shut down one location, so we transitioned into online sales, producing baking kits for kids. You have to shift. For us, we started to sell non-food products instead of our baked cookies.”
Most online storefronts are simple to set up and inexpensive. For example, Shopify’s basic plan is just $29 per month. Etsy charges a listing fee of $0.20 per item and a transaction fee of 5 percent of the price you display. The professional plan for Amazon is $39.99 a month, plus additional selling fees.
“I like Shopify because it’s user-friendly, not technical and they have great customer support,” says Pomije. “I’m hoping to sell between 4,000 and 5,000 units in the next 75 days. As for Amazon, it’s great for growing your business because they help you reach millions of people.”
It’s a good idea to offer contactless delivery or pick-ups, too. The key is to be flexible.
If you’re selling off your business’s e-commerce website, conduct a speed test now. You’ll want to ensure your site can manage any increased traffic. Google PageSpeed Insights is free and fast.
5. Track your finances
A balance sheet shows your company’s assets, inventory and liabilities. Prepare one now. A small business calculator will help you run the numbers.
If your business carries more debt (say, in loans or credit card debt) than assets, it’s in the red. And if you own more than you owe, it’s in the black. In either case, you’ll want to be in a forward-moving position, using this season’s sales either to reduce debt or to boost profits.
It’s also crucial to become and remain financially organized, especially during the chaotic holiday sales season. Accounting software such as QuickBooks can put you on track. With it, you can stay on top of accounts receivable (money owed to you), accounts payable (the amount you need to pay vendors or suppliers), available cash and the amount you need to make payroll.
Liz H. Kelly of Goody PR, a public relations firm specializing in small businesses, says holidays are not the time to DIY your bookkeeping if you’ve never done it yourself.
“Accounting software tools are great, but you have to learn to use them,” says Kelly. “I encourage my small business clients to hire a professional, especially now. They need to concentrate on holiday sales. I don’t want them worrying about their financial books, but they do need to be sure of the numbers.”
The bottom line
Stick to your plan, and don’t be afraid to delegate tasks to those who can do them better or faster than you can. Your focus should be on getting your product or service out to the purchasing world so you can achieve a blockbuster year. Running your business efficiently will put you on your way to exceeding your goals for the 2022 holiday season and beyond.