As a business owner, shifting gears to meet your holiday season demand can be a challenge.
You have systems in place to operate your business during times of steady demand and for relatively slow times. When the holiday season approaches, however, everything is faster.
You need more inventory, a larger staff, and everyone longer hours if you want to keep customers happy. More transactions increase the risk of error, and without proper planning, you may lose control and miss sales opportunities.
If the thought of slogging your way through another holiday season keeps you up at night, use these tips to prepare for the holidays and meet your sales goals.
Sally owns Sunshine Gifts, and her gift shop generates 50% of its sales online, and 50% from in-store sales. Because 40% of her annual sales take place between November 1st and December 31st the holiday season is critically important for Sally.
Step 1: Identify the Goals of Preparing For The Holiday Season
Start the planning process by thinking about company goals for the holiday season.
Sally has three goals she’d like to achieve:
- Increase holiday season sales by 15%
- Add 25 new product offerings for holiday shoppers
- Reduce stockouts by 50%
Sally opened her business six years ago and sales have increased each holiday season. This year, Sally wants to up her game and provide a better customer experience for all shoppers.
Step 2: Plan How You’ll Reach Buyers
Once you set your goals, consider how your marketing plan will get attention and generate interest. After six years, the gift shop generates a good level of repeat business. However, Sally needs a comprehensive marketing plan to get new prospects and repeat customers to her store to reach her sales goals.
The starting point for a marketing plan is historical sales data. Fortunately, Sally has used accounting software to post transactions since the gift shop opened, and her past holiday sales records provide valuable information. Sally, for example, can analyze past sales and determine her most popular products.
Here are some other marketing strategies for the gift shop:
- Bundling: Sally combines popular items with new items and sells the bundle at a special holiday price. For example, Sally bundles a best-selling novel with a coffee mug and a high-end brand of tea and features the gift bundle in all of her holiday gift promotions.
- Gift cards: A growing number of customers ask Sally about gift cards, so the shop promotes gift cards at each check out line and on the home page of the website.
- Website enhancements: For people to buy, the shop’s website must be easy to access and navigate. Sally decides to work with a tech consultant, who improves e-commerce functionality, simplifies the navigation and enhances the page load speed of the shop’s website and makes it mobile friendly.
- Store layout: In a similar way, the physical store must be easy to navigate so customers can easily browse through merchandise and move to the check out areas. Sally carefully plans her shelving, store displays, and aisles to make holiday foot traffic easier to navigate.
Each of these marketing efforts is designed to provide a better customer experience and to increase sales.
Step 3: Plan for More Sales and More Administrative Tasks
More transactions require the gift shop to carry more inventory, work with more customers, and process more sales. However, the higher level of activity increases the risk of mistakes and lost sales. These issues can be addressed with effective planning.
Sally has dealt with the holiday season for years, but she’s managed the process with some difficulty.
To make the process easier to manage, Sally creates a detailed plan to manage store operations, which includes these features:
- Inventory: In previous years, Sally has delegated inventory management to a store manager and the gift shop has experienced stockouts and lost sales. This holiday season, Sally runs a daily inventory report that monitors the levels for each item in the store, and she takes responsibility for ordering additional inventory herself.
- Staffing: Sally hires seasonal workers, but also maintains a list of former employees who are willing to fill in for those who cannot work assigned shifts. This new process reduces the risk that the gift shop must operate without a full staff, and reduces the time Sally must spend to find replacement workers.
- Training: In past years, Sally has trained her staff, but hasn’t fully explained her rationale for product selection, pricing, and bundling. Before the holiday season begins, Sally explains why certain products are being promoted, so that her entire staff understands her marketing approach, and can communicate the benefits to customers.
Sally documents her new procedures in a written procedure manual, which can be used to train workers. The manual is available online for easy reference and to clear up any confusion to the staff about a particular task.
Step 4: Manage Your Cashflow
The holiday season will not be a success without proper cash management.
Sally’s plan requires a larger investment in marketing, inventory, training, among other costs. The gift shop will need more cash available to pay for these increased expenses because customer transactions may not be sufficient to cover the costs in the short term.
Sally has several tools she can use to plan her cash needs. First, she can analyze her cash inflows and outflows in past holiday seasons and estimate the additional cash she’ll need for sales growth. Fortunately, nearly all of her clients pay by debit or credit card, and the gift shop requires full payment at the time of purchase. The gift shop does not carry accounts receivable balances for more than a day or two, when is the time needed for banks to make payment.
To increase her spending before the holiday sales occur, Sally may need to set up a line of credit (LOC) agreement with a bank. She may, for example, access the LOC in October and November, and repay the bank loan as holiday sales take place later in the year. Sally will incur interest costs on the loan, but the LOC allows her to manage sales growth, and generate higher profits.
Benefits of Planning
If the thought of managing another busy holiday season creates anxiety for you, fear not. With proper planning, you can grow your business without losing control of your operation. Set aside time to carefully think through holiday season issues, document your plan, and discuss the plan with your staff.
You got this!