It happens every year. The holiday season is suddenly upon you, and yet your business is not in optimal condition to take full advantage of this very special time of the year – shopping season!
Getting an Early Jump
The best way to extract maximum profits from holiday shopping is to have a large inventory of items that will be hot sellers in the last two months of the year. To some extent, this can be a test of your predictive powers, because normally you will have to decide what to order, and then order it, about six months in advance if you want to be sure of receiving what promises to be the season’s blockbusters.
Therefore, you must combine budgetary and marketing data to make reasonable forecasts of:
- How much sales volume I want to achieve during the holidays?
- What merchandize do I want to stock this holiday season?
- How aggressively can I set prices to fight for holiday sales?
- How should I spruce up the shop to get customers into the holiday buying mood?
- Will I need temporary workers, and if so, how many and what types?
- How will I store the early shipments of holiday merchandise I receive prior to Halloween? Will I need to rent temporary warehouse space?
There are many other questions you can ask, but this is a good start.
The outcome of this brainstorming should be any changes to your 12-month budget, laid out month by month.
Strengthen Your Working Capital
Next, examine your current debt situation. Do you owe money from last year? What interest rate are you paying on existing debt? What’s happened to interest rates in the last 12 months? Check your working capital situation – you’ll need plenty of cash and credit to finance holiday inventory, but you don’t want to spend a lot of time managing accounts payable for a lot of different vendor accounts. With sufficient cash on hand, you can pay vendors right away and benefit from purchase discounts. The answer is to consolidate your debt through a low-cost commercial small business loan. It’s much easier to manage a single creditor rather than contend with demands from a gaggle of vendors and creditors. When you consolidate your debt with IOU Financial, you don’t have to spend much time figuring payments, because we will debit small amounts every day from your bank account. This removes the pain and worry you might feel if you had to face a large monthly payment.
To order sufficient inventory in, say, June, when sales may be weaker due to the summer doldrums, may put quite a strain on your working capital at precisely the wrong time. The easiest solution is a small business loan form a commercial lender such as IOU Financial. By consolidating your old small business loans and adding fresh borrowings to the mix, you have the opportunity to optimize your debt and your working capital for the upcoming holiday season.
Get Your Technology Up to Speed
If you are not happy with your current accounting and point-of-sale software, well before holiday season is the time to either fix it or replace it. If you find any part of your current system holding you back from tracking real-time sales, shipping and restocking activity, it might be time for new solutions. You will also want to ensure you have installed the new chip-card readers throughout your store, so that you bypass any liability for fraud caused by lost, stolen or counterfeit credit/debit cards. Estimates are of about $450 to install each new card-reading terminal, so make sure you figure this expenditure into your budget.
The bottom line – you want to have sufficient working capital ahead of the holiday season in order to optimize your revenues once the end-of-year frenzy gets under way. Contact IOU Financial and learn how quick and easy it is to whip your finances and small business loans in shape for the lucrative holiday season.