Your productivity as a small business owner directly impacts your profitability. The holidays are among us and now is the time to increase your annual sales. Make sure you have a return on your investment this holiday season.
Hit your yearly growth marks by following these profitability tips.
Set Holiday Goals
Goals are important when you are determining business profit. If you don’t have goals, there is nothing to base your success off of. Many businesses set annual, quarterly, and even weekly goals. Consider setting holiday sales goals based on last year’s numbers. Your goals will help you understand how your business’s success changed from last year’s holiday season to this year.
Attract New Customers
There are so many business options to choose from during the holidays. Consumers are being overloaded with emails and advertisements. Attract new customers by showing them how your business differs from the rest. Explain the importance of shopping small, introduce your team, or show off your competitive advantages.
Do not focus on one-time purchases from these new customers. Loyal customers are the top way to profitability, and they bring in consistent revenue to your business. Consider creating a loyalty program or give them a discount on their second purchase.
Plan a Budget
Since marketing efforts are typically higher during the holiday season, set a higher monthly budget. You might also want to consider just having a separate holiday-related budget. Without a budget, you may spend way over your limit. Overspending affects your profitability.
If you haven’t ever set up a budget for your small business during the holidays, go back and check on last year’s bookkeeping records. If you didn’t save all your receipts, do so this year so you are prepared for next year’s holiday season. Bookkeeping also helps with your taxes, audits, and accounting.
Manage Your Money
If your business takes a long time to collect payments from customers, it could cause you to run out of cash. This is especially a problem when inventory is high during the holidays. Keep extra money saved up in case of an emergency.
For example, buying the wrong stock can heavily affect how much money you currently have. This can put you in a sticky situation during the holidays when your business and your vendors are busy.
A sales forecast can help you determine how to plan your cash flow and give you a financial foundation. After assessing your sales forecast, you’ll be able to create profit-and-loss statements, cash flow, and a balance sheet. Your sales forecast will help you assess what investments are profitable and what is costing you money. You will also see the financial improvements needed to enhance your small business during the holiday season next year.
Have a Profitable Holiday Season!
PL Consulting commits to helping each of our clients during the holidays. We are available for all the questions you have about bookkeeping, budgeting, goal setting, and forecasting. If you would like to set up an appointment, call us at 410-764-3731.