The holiday rush can be a stressful time for small business retailers. Owners have to account for staffing issues, lack of capital, inventory, opening another location, boosting advertising, and insufficient personal time. Amidst the shopping, box office blockbusters and holiday cheer, retailers with fewer than 100 employees were surveyed to gauge their outlook for the holiday season.
Overshadowed by Black Friday and Cyber Monday super savings from large department and discount stores, small businesses can still find success through other avenues like word-of-mouth, communities and customer loyalty. Taking advantage of the holiday season and ending 2016 on a high note can set up a small business for success in 2017. The first step of that is to be properly prepared. Survey findings show that 87 percent of small businesses are confident in their preparations for the holiday season and 81 percent are confident this season will be a success for their business.
Growth of Small Business Saturday
Holiday shopping numbers so far show that small business retailers’ confidence this season has been well founded. In 2016, awareness and support for small businesses hit a record high. According to the National Federation of Independent Business (NFIB), 72 percent of U.S. shoppers were aware of Small Business Saturday and 112 million consumers shopped and dined on Nov. 26 to support local businesses across the country.
The 13 percent increase in consumers participating in Small Business Saturday can be attributed to social media, which has seen 135 million engagements so far this month in relation to the day.
Small Businesses that Aren't Confident This Holiday Season: Lack of Capital
Despite the success, there are still retailers that aren’t confident this season. Among the 13 percent of businesses that feel unprepared, the largest group (30 percent) cited lack of capital as the reason.
In order for small business retailers to succeed and continue to be key drivers of the economy, access to options for business-sustaining capital is crucial. Even for small business retailers that are confident this holiday season, just 27 percent said they didn’t expect to need additional financing. For owners needing capital, 81 percent said they would only need $50,000 or less, with building inventory (56 percent) and boosting advertising (28 percent) being the most common needs for additional financing.
For companies seeking additional capital, the survey found that 44 percent of small business retailers cited credit lines as the top source they would consider, followed by Small Business Administration (SBA) loans from local banks or credit unions, friends and family, personal credit cards, SBA loans from a national bank, online loan marketplaces and home equity loans.
Taking out loans and accessing capital isn’t a bad thing if done responsibly. If the need for capital should arise, 87 percent of respondents are confident they will be able to pay the loan back on time.
How Small Business Owners Cope with the Holiday Stress
An often-overlooked aspect of small businesses during the holiday season is personal time. The added demands of the holiday season can take a toll on small business owners, who find different ways to cope. The survey findings show that many fight off exhaustion from the stressful season by increasing their caffeine consumption (58 percent), sacrificing personal needs (32 percent) and by planning a vacation once the holiday season is over (42 percent).
Business owners may put the brunt of the responsibility on themselves, but it also affects their full-time and seasonal employees. Chris Rush, vice president of strategy for ADP’s Small Business Services Division, suggests that owners can keep employees happy by navigating holiday pay, determining holiday bonuses, creating time-off policies, planning a holiday party, and setting gift-giving standards.
Small businesses rely heavily on the holiday season to close out the year on a high note and set up next year. That’s why it’s a positive sign for the economy that the vast majority of small business retailers are confident this holiday season will be a success for their business. Based on Small Business Saturday and recent trends, their confidence is being rewarded.
