If you’re in the retail industry, you’ve probably been ready for the Christmas season since Halloween. In today’s retail environment, businesses (especially small businesses) who fail to do so can be quickly left behind. It’s suggested that around 40 percent of shoppers start shopping for the holidays before they’ve even Trick-or-Treated.
In fact, holiday shoppers aren’t the biggest hurdle small business owners will face over the holiday season—it’s the dramatic shifts in cash flow.
During the holiday season, businesses experience a significant lag between when they have to pay for their inventory/supplies and when consumers actually show up to begin purchasing these types of items. Often, businesses will need to order (and pay for) holiday inventory and decorations as early as September; however, they won’t typically start recouping these expenses until November at the earliest.
How can you, as a small business owner, make this roller coaster ride just a bit easier? Consider these steps.
Up your cash flow early
If you’re going to purchase your holiday inventory early, perhaps you should hold annual holiday sales early too. This will make it easier for your business during the historically hectic time of year and make your cash flow better.
If you own a spa, hotel, or other service where your customers can book and pay, encourage them to pay their balance in full early by offering bonuses for paying within a certain date. This method can also work for selling gift cards because you get paid before purchases are made.
Aside from encouraging patrons to spend their money early, you can also increase your cash flow by reducing the number of clients you send bills to (encourage prepayment or instate payment on delivery), accepting credit card payments (you’ll have your money as soon as 48 hours), and allowing mobile payments (like PayPal and Square).
The holidays can be a stressful time for everyone. However, by doing some planning early, you can ease some of this stress.
For other ideas on how to keep your small business running successfully – such as “4 Reasons Social Media Works for Small Businesses” – we invite you to browse our Small Businesses blog.