The summer holiday period is one of the most important times of year to consider your strategy and business practices. In the rush to make the most of the explosion in consumer spending leading into Christmas, the lack of a clear strategy can mean missing out on the spoils. But just as important is to know how to approach Australia’s summer holiday period as a whole.
Here are a few holiday dos and don'ts every business owner needs to consider:
Do think about hiring temporary staff for the holiday season
This is the time of year when many businesses need extra help, especially considering most regular employees will want to take time off. Make sure you know who is working, and when, and set a deadline for employees to submit for annual leave. Check the days that your employees work so you know you’re paying the correct rates.
Even family businesses should be wary of hiring family friends or relatives as temporary staff during the holiday season. While this arrangement can work, for many businesses it’s easier to hire a temporary worker if you don’t think the working arrangement will continue. It’s easier to hire someone that you can fire without damaging any relationships.
Before you approach a temp agency for additional staff, define the type of employee you want. Are you looking for an employee that will be willing to work just for the holiday season, or one that might consider transitioning into something more permanent? Even if they may only be temporary staff, take the time to suitably train them and offer feedback and encouragement.
Don’t forget about banking regularly
Campbell King, Partner at mi-fi, says “Don’t let your cash accrue in your store or office. Be mindful of new trading hours for banks during the holiday season.” He also recommends that his clients bank cash takings regularly and systematically to assist with reconciling to their POS systems.
Do consider your stock
For retailers, ensure that you have sufficient stock to sell over the holiday period and note if your wholesalers are taking time off. King advises retail clients to look at what has worked in the past and buy accordingly. He also says planning stock purchases in advance will ensure you can get the best price and improve your margins.
Do price accordingly
Paul Meissner, Director at 5Ways Group, recommends bundling products together as a good way of upselling, especially if the products are complementary (dips and biscuits, jams and sauces etc.). Think about the popular price points for last-minute Christmas shopping – $15-$20 for Kris Kringle presents, $40-$50 for family gifts. Position these products at the front of your store for visibility and convenience.
Think about stock beyond Christmas
Consider what you can do with the stock that you had planned to sell as Christmas gifts. Can they be repackaged and sold? Retailers would be wise to keep Christmas ornaments and decorations on display days after Christmas to clear out excess stock and for savvy shoppers looking for a discount.
Any type of fitness equipment or gear should be top of mind of retailers after Christmas as well, to capitalise on Australians making New Year’s resolutions to get in shape and lose weight. With demand for these products high, price these items competitively.
Don’t forget about deliveries and shipping
“Let customers know the last day they can order products for Christmas delivery or pickup. Presents are no good delivered after Christmas,” Meissner says.
Remember that if you ship products internationally, you need to clearly set out your shipping terms, being mindful that mail can get held up over the festive period. Be realistic about the final shipping date before Christmas and ensure that packages are sent promptly.
Offer free shipping to your customers if you are an e-commerce store. Free shipping is major selling tool that drives web shoppers to buy, and savvy online shoppers have come to expect free shipping during the holiday season.
If your holiday sales figures are weaker than expected, consider extending free shipping throughout January to take advantage of people searching for great deals on apparel, consumer electronics and home furnishings. Retailers can salvage sales growth by offering promotions like free shipping to boost sales in January and maintain momentum.
Don’t forget about tax
Small businesses should remember that there is additional time to lodge the December BAS. The extended due date is 28 February 2014, allowing extra time to ensure you submit accurately. Campbell King advises his clients to provision for the December quarter BAS payment including the extra PAYG withholding from longer hours and for the GST from higher sales. “This is a trap that many retailers can fall into,” King says.
Do get your finances in order
The holiday season can be a time of expenses and uncontrolled spending. Get your finances in order starting with accounting software that can be automated and run remotely. The result will be key business decisions getting made in a timely manner and before any problems arise.
Chris Ridd is managing director of Xero Australia.