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Is your small business ready for Christmas?

The clock is ticking down to the end of the year. And as a small business owner, you’ll no doubt be aware of how important it is to prepare for the festive season well in advance – from making sure you have enough stock and staff to cover the Christmas rush, to preparing for any cash flow issues you may experience as a result of holiday closures.

If you’re not sure whether you’ve covered everything you need – don’t worry! Here are some practical steps you can take to make the most of the Christmas season, starting now.

Tips for retailers

If you run a retail small business, the key issues you’ll need to consider over Christmas are stock and staff. Here are a few steps you can take to prepare your retail business for the festive season:

  • Create a calendar that highlights your busiest shopping days. Display it in your staffroom and/or email it to all staff.
  • Roster plenty of people onto your busiest days well in advance.
  • You don’t want to be training new staff while you’re busy, so recruit more casuals asap if you’re facing a shortfall.
  • Fine-tune your stock levels by looking back to last year, and analysing what sold well and what didn’t.
  • Some retailers find that early season discounts can erode their profit margins and January sales, so bear this in mind when you’re planning any promotions.
  • If you have an online store, make sure your e-commerce website can handle a seasonal surge in traffic.
  • Test and refine aspects of your online store, such as checkout time, to make them as fast and reliable as possible.

If you’re in hospitality

Restaurants, bars and cafés are usually hectic during the silly season, as so many people are socialising and hosting Christmas parties. If you run a small business in the hospitality industry, make sure you:

  • Have new staff skilled up well in advance, with enough casuals to cover especially busy days.
  • Get all your staff processes and standard business operations running efficiently, so everyone can cope when your business is full of customers.
  • Put away as much extra cash as you can for the slow season, particularly if you’re closing your small business over Christmas, or taking a holiday after the busy season has passed.
  • If you’re closing down during or after the Christmas holiday period, be sure to advertise your closure well in advance to avoid disappointing loyal customer. You can do this using in-store signage, your website and social media.

If you’re a freelancer

Many freelancers, such as graphic designers, copywriters and animators, find summer to be a slower time as clients take holidays. If you find your freelance projects drying up over the Christmas holidays, here are some things you can do now to avoid any cash flow issues:

  • Set yourself a budget for the Christmas and New Year holidays that incorporates a reduction in your income over this time, so you don’t eat into your savings too much.
  • Start saving a percentage of your income during busy times – say, around 10% – to cover your holidays or quieter times.
  • Another way of doing this is to increase your tax account deposits by 5%, so you’re saving a consistent amount all year round to cover holidays and time off.
  • Use any downtime to do the work you don’t get around to when you’re flat out – such updating your website or portfolio, managing your accounts, or developing plans to grow your business.

Managing your cash flow over Christmas

The festive season holidays can be an expensive time of year. Many small businesses find themselves needing to pay wages and expenses even as their businesses close during the holidays. Here’s how you can avoid the Christmas cash flow crunch:

  • Create a budget and start saving extra now to avoid any cash flow issues.
  • Be proactive about invoicing your clients and chasing payments. The sooner you can get your invoices lodged, the more likely you are to get paid before the end of the year, before accounts payable staff go on leave.

If you need extra funds to cover you during the holiday season, talk to us about a small business loan.

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The information in this post is provided for general information only and does not take into account your personal situation. Nothing contained in this post constitutes advice or an endorsement or recommendation of any kind by Prospa. Any links to third party websites are strictly for informational purposes only. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

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