A small business guide to surviving Christmas

For most of us, autumn glides into Christmas alarming quickly. Halloween and bonfire night are minor stepping stones as the festive season rapidly approaches. This sensation is even more apparent for small business owners, whose minds are often fixed firmly on Christmas while it’s still warm enough to sunbathe.  

This isn’t due to a childish love of Santa and presents, but because November and December are the months in which some retailers make the lion’s share of their profits. The same can be said for all of the businesses that feed into their supply chain. Poor Christmas sales, then, can spell a bad year overall.

When the economy is soaring and consumers are spending merrily, it’s possible to sit back and let the customers come to you, but in recent years such happy times have been few and far between. This can result in a bun fight, with small retailers pitched against giant high street retailers, goliath discounters like Amazon and, of course, one another.

The good news is that families almost always spend big at Christmas. In 2017, the average household splashed more than £475 on presents, and £225 on food and drink in the build-up to the big day, as well as extra on decorations and general home-sprucing.

While spending ebbs and flows each year, there are always rich pickings for businesses that prepare well, seize opportunities and drive up efficiencies in order to prise open profit margins when the sales start rolling in.  

Plan to prevent Christmas chaos

Time waits for no man nor woman, so get moving on your Christmas strategy if you haven't already. Big retailers plan all year, so try to avoid playing catch-up. The good news is you’ll be ahead of the millions of small businesses that don’t plan at all.

If, for you, Christmas is the busiest time of year, then consider how you’ll steer customers through your door. Then make sure you have enough stock to sell them and calculate whether you need extra resources – whether that means investing in equipment or people – to make it all happen smoothly.

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Marketing up a storm

A marketing strategy is a complicated thing, incorporating online and offline messaging, shop signage and decoration. Worse news is that the big retailers spend millions on getting it just right – just think of the annual event that is John Lewis' TV ad, or Liberty’s grand display unveiling on Oxford Street.

But small businesses can get in on the act by adding personal touches and warm customer service that the big multiples can’t match. There’s scope for sales online too, via niche keyword targeting in Google ads or by adapting to consumer trends quickly.

And, if you can’t beat them, many online stores including Amazon, ASOS and Notonthehighstreet let you join them. Many make it easy for you to list items for sale and benefit from their mammoth customer base to drive up your own sales.

Slick business operations

The busier you are the more important it is to have fluid business processes. If you’re a retailer, does the shop layout inspire customers to make purchases and can they glide effortlessly around – or do they get stuck in bottlenecks when more than 10 arrive at once?

Are your displays attractive? Have you read up on the latest methods to attract eyeballs and convert them into paying customers? Is your payment system fit for purpose and can it cope with a spike in footfall? Can you restock quickly if popular lines sell out?

For suppliers there are just as many questions to answer: is there scope to ramp up capacity, either on a factory floor or in your storage facility? Do you have the right logistical partners and software that lets you track everything seamlessly?

It’s important to ensure that your business has the space and the tools to do the job. So if you’re still working from the same till you bought in 1995, it could be time for an upgrade. The world turns quickly and there's a huge array of business-boosting products and services out there – so make the most of them.

Boost your people power

A thorny issue related to the Christmas period is recruiting enough people to cover the spike in activity. For many businesses this is a fine balance: not only must you predict demand, but also anticipate upheaval caused by festive celebrations, annual leave and inevitable sick days.

Luckily there is an increase in capacity during December, as colleges and universities break up and young people looking for holiday money head back to their home villages, towns and cities. It might be worth signing up with a recruitment agency specialising in temporary work, but remember you’ll have to set aside additional time to meet, interview and train new workers.

If you’ve been in business for more than 12 months, refer back to previous Christmas periods and assess the good and the bad. Factor in any business growth or shifts in the market (for example, a newly built residential development could lead to increased demand) and make a sensible projection. If you’re planning a bigger marketing drive this year, then account for the likely response from customers and hire accordingly.

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Deal with stress

For many UK workers, Christmas is a time to kick back, relax and forget about the stresses of the nine-to-five for a week or so. But retailers and their suppliers have no such luxury – in fact it could be your most stressful time of the year.

So make sure the hectic final quarter doesn’t lead to burnout – either for yourself or the people who work for you. This is obviously easier said than done, but a bit of preparation will take away some of the strain.

Don’t try to do it all alone and be honest with yourself about the challenge you face. If you need help, then procure it. It’s possible that the extra expense will be accounted for by increased productivity and extra sales on top of lower stress levels.

Most importantly, don’t forget that Christmas is meant to be a holiday and you should factor in downtime to spend with family and friends. Entrepreneurs often lose sight of the need for time away from the business, but taking a step back allows you to recharge the batteries.

An additional benefit is that people often have their best ideas when they allow themselves time to relax. Working ‘on’ the business instead of ‘in’ it is a great way to come up with creative ideas that power your empire forward.

If you haven’t already, it’s time to start thinking about festive business. Preparation pays dividends and an investment of time, effort and cash will come back in the form of increased profits, lower stress levels and, in general, a very merry Christmas.