While the fourth quarter can be a boon for your retail business, it can also cost you a lot in added inventory and promotions. There are ads to buy. Flyers to print. People to hire. Stock to purchase. It adds up, and quickly. Don’t let the holiday season destroy your business before you get a chance to profit from it. Here’s what you should be doing now to ensure you have the cash to invest in making this holiday sales season your best.
- Buy Inventory Now
Don’t put off your big inventory purchases until November. Buying now will allow you to spread your expenses out, and possibly benefit from lower per-product pricing. Check with your supplier to see if you can negotiate a lower rate by buying in bulk and buying early.
- Set Money Aside
Even if you start investing in Q4 marketing now, there will be last-minute expenses toward the end of the year. Putting money in savings now will ensure you’ve got padding to cover those expenses, and you won’t have to turn down great opportunities because you can’t afford them. Put a percent of your profits into a savings account and don’t touch it until you need it for holiday-related expenses.
- Consider a Working Capital Loan
If you’re concerned about having enough expenses for the holiday sales season, you might want to take out a working capital loan. You borrow against the amount you’re owed in invoices, and you get the cash now, rather than when your customers get around to paying you. You pay a modest fee for the loan, but the benefit is huge when you have a large output of cash that won’t be profitable until January.
- Start Shaving Expenses
Because Q4 is such a big one expense-wise, now is a good time to pull back in other areas. Look at your expenses and see where you can save. For example, if there’s a monthly subscription for software you rarely use, you can cancel it and put that money toward promotions. Even pulling back on unnecessary expenses (i.e. gourmet coffee in the break room) can give you breathing room to handle the upcoming costs.
- Budget for Temp Hiring
If you plan to hire temporary help to assist with the deluge of business you’ll get in Q4, start looking at the numbers. You want as much help as you’ll need to handle the extra business, but you also need to be able to pay your staff. Calculate what your needs will cost, and start setting aside money for payroll. The last thing you want is to not be able to afford the extra hands that are so essential during the busiest time of the year.
- Shop for Client Gifts NOW
If you buy gifts for your clients or send holiday cards, this is an added expense on top of everything else you’ll be doing in November and December. Shop now for great deals on gifts like cookie baskets, flowers, gift cards, and personalized items, then defer shipping until the holidays. With that expense out of the way, you won’t have to sweat it later.
- Look for Online Advertising Deals
If you purchase advertising online for the holidays, look for special offers starting now that will help you save. For example, if LinkedIn is a preferred ad channel for you, keep an eye out, because the site often gives a $100 credit to attract new advertisers. Redeem the credit and plan to use it when you need it (just look to see when it expires).
- Prep Your Marketing Plan Now
Establish your strategy for marketing during the holidays and begin to execute it. That way, you won’t have a pile of freelancer and advertising bills to pay all at once later. Your blog writer can start on holiday-related content and schedule the posts for the appropriate time, and can do the same for email marketing. Starting early also minimizes the inevitable stress that comes with waiting until it’s too late to get started.
- Order Print Collateral
If you distribute coupons, flyers, brochures or other print media, get it designed and printed now so you don’t have to pay a rush fee on it at the last minute. Consider printing extra items you can use next year too (don’t include dates if they will make the collateral unusable next year) to save on the per-unit cost.
- Look for Discounts on Holiday Items
Wrapping paper and Christmas decorations are a steal at your local thrift store year-round. Stock up now before others wipe out the inventory, and you can prepare for the season at a fraction of what you’d pay retail.
With a little forethought, you’ll be prepared for the added expenses that creep in during the holiday sales season. What expenses are you concerned about in Q4 that you need to plan ahead for now? Leave your response in the comment section below.