It’s the most wonderful (albeit expensive) time of the year. Along with all the bustle of the holiday season, and hopefully fantastic profits, most businesses find themselves facing additional costs during the holiday season that can really dampen the holiday spirit if you aren’t prepared for them.
At Hayes and Associates, our goal is to support businesses and help them remain financially sound through every season. Let’s talk about some smart ways to establish and maintain a business budget that will help you finish the holiday season strong.
What Additional Costs Come With the Holidays?
While some expenses are fairly universal across business sectors, those in retail and hospitality will find themselves especially busy during this time of year. Keeping longer business hours, having additional staff on hand, additional shipping costs, and more can all add up quickly.
By no later than November first, stores are already getting into holiday mode with seasonal decor, new merchandise and promotions, and an increase in traffic. This means hiring and training additional holiday workers must begin several weeks before. You’ll need help with holiday displays, additional stocking, customer service, working registers, and more. Invest as needed in the training and equipping of these new workers, as excellent customer care is what will inspire loyalty and repeat business.
Many companies gift their employees with bonuses based on their individual merit and the company’s overall success throughout the year. Many families depend upon these gifts in order to provide for their families during the holidays. Giving generously conveys the great value you place upon them, but don’t outgive the company’s profits, or next year will start off on the wrong foot.
Throwing a holiday party can be your company’s highlight of the year, bringing together workers and their families for a time of fun and celebration. Let the celebration suit the size and personality of your company, and plan carefully, as this is one event that could run away with your budget.
Gifts and Tokens of Appreciation
From the simple act of sending “Season’s Greetings” cards to elaborate gift baskets and lunch trays, it’s important to acknowledge and thank those who have helped make your business successful this year. Remember your business associates, key clients, contract workers, service providers, and key persons and businesses. Choose gifts that are meaningful and personalized, and with a little creativity, you won’t have to spend a fortune.
Create a Festive Atmosphere
If your business operates in a commercial or retail space, make the environment festive, colorful, and inviting with lights and displays tastefully arranged. Choose a variety of holiday classic tunes. Against this backdrop, offer holiday specials and promotions to your customers. Build morale among your staff with friendly competitions and rewards. These will help diminish the stress and overwhelm that can accompany working in this hectic season of the year.
No matter how great your product, if no one knows what you offer, it’s for naught. To attract the business of the holiday shoppers, you must get the word out about your business. Meet with your marketing team to create a winning strategy. Learn the cost of the approach and make adjustments to suit your budget as needed.
Creating a Business Budget for the Extra Expenses
Planning is key. Among the list of potential expenses we’ve provided, determine which ones apply to your business. Know how much money you have to work with before you begin holiday spending and work within the parameters of your currently available resources to create a budget for the holidays.
If you find that your money is not stretching as far as you would like it to, you may be tempted to engage in anticipatory spending, assuming you’ll be able to make up the difference by a profitable 4th quarter. While you may be right, there is no guarantee that you will make as much as you hope. As a very simple rule of thumb, don’t spend what you don’t have! Sure, lavish parties and exquisite gifts make a statement, but if you are forced into a pit of debt to pay for them, this isn’t the year for an over-the-top splurge. A smaller token gift or a card for clients and a company luncheon during the workday can be frugal and effective.
Planning for the Future
While two years of a business are rarely exactly the same, keeping close records and observing the spending and earning patterns of your company during this holiday season will provide great insight into how to effectively prepare your budget for next year and beyond.
Throughout the holidays, keep a running list of income and expenses and hold onto receipts. Compare what you were able to give and spend toward seasonal opportunities versus what you would have liked to.
When the holidays are over and all has quieted down, go back and review your numbers. Evaluate your spending in each category. Were there places you needed to spend more? Less? Consider what needs you might have in the future. How much do you anticipate your company growing in the next year?
Using a blend of insights from this year’s spending and goals for next year, create a holiday business budget for next year. Then break that budget down into twelve months of savings and preparation. Smaller savings throughout the year make the budget manageable and significantly reduces stress, allowing you to celebrate the season in style without financial headaches in January.
Many tools are available to help you organize and manage your finances, including your budget. You may want to consider utilizing one of these to help you stay on track.
If you’d like some advice as to how to maximize profits and savings or need help with any aspect of your business finances, give us a call. At Hayes and Associates, we love to see companies thrive, and we can help you get there.