Every year, businesses the world over spend a significant amount of time and money ramping up for the holiday season, and then, just like that, it’s over. As quickly as Halloween seemingly rolled into Thanksgiving, the New Year is here, and the holiday rush is a mere memory. But what about your business efforts? After weeks, if not months, of running at max strength, what do you do once the inevitable Q1 lull hits?
As you close our 2018 and dig your feet into 2019, it’s important to address the unique needs of this slower period, and in doing so, prepare your business for not only the first quarter, but for the rest of the year. Not sure where to start? Here are six tips to help you decelerate business and make the most of down time..
1. Run an Inventory Check
Inventory is often one of the first factors to get the holiday treatment, and as the new year starts, it once again becomes a focal point in your strategy. As the expected shift in sales begins, it’s time to make the necessary adjustments to your inventory and purchasing efforts.
If you find yourself with a surplus of holiday inventory, it’s important to take advantage of the days and weeks that immediately follow the holiday. Spending doesn’t necessarily cease on December 25th. Many consumers will take to the stores the first few weeks of the holiday as they make returns, look for post-holiday deals, and use gift cards. As such, it’s important to consider how you can position and push products to appeal to consumers who are primed to spend.
Of course, it’s not all about the inventory on your shelves. You’ve likely ramped up your purchasing efforts early in Q4, and so now it the perfect time to revisit those decisions and marry them with upcoming seasonality needs and YoY sales data. For some, this may mean decreasing purchase order; for others, this may mean ramping up purchasing for the next seasonal driver.
2. Revisit Your Pricing Strategy
Many retailers would argue that the holidays are all about competitive pricing and attractive sales and promotions, the goal being to get customers in the door and to the register. However, in the new year, those same efforts, when paired with a slowdown, may not provide the same cost benefit.
In some cases, this means a return to pre-holiday pricing in an effort keep margins up and make up for post-holiday slow-down. In other, particularly if you need to move surplus inventory, it may mean strategically leveraging sales prices or bundling products to move product.
The best way to determine which is right for you is to look back on your 2018 Q1 sales, factoring in any revenue or inventory demands you must meet.
3. Manage Holiday Staffing
If you hired temporary staff for the season, you likely will be decreasing hours and phasing out temporary employees at the beginning of January; however, make sure that you maintain enough staff to accommodate any employee vacations and, if necessary, to manage the post-holiday tasks, like handling returns, checking inventory, etc.
If you’re inviting any holiday staffers on permanently, now it also a good time to make sure they’re properly trained for year-round job requirements and that all their employee paperwork reflect the change in status.
4. Plan for Repayment
Did you need to finance a portion of your holiday efforts? If so, you likely are already in or just about to enter the repayment period. As you begin the new year, it’s essential that you solidify a repayment plan that will allow you to meet your debt obligations.
Some small businesses, particularly those that had a successful holiday season, will be able to hasten repayment, likely decreasing the cost of borrowing, by leveraging holiday revenue.
That said, if your budget is still tight and you need to manage operational costs over the slow months, then paying off the debt in one lump sum may not be the best option. Instead, you may need to continue to make the minimum payments until revenue increases or the debt is paid in full.
5. Review Holiday Data
Once sales slow and the holiday rush is truly over – including returns – it’s time to dig deep into holiday metrics and analyze your efforts. There are a variety of reasons you’ll want to do this, the primary one being to determine success and capture important takeaways for Holiday 2019.
As you review data, in addition to obvious numbers, like total sales, peak performance days, shipping costs, and contribution margin, it’s also important to dive into specifics like best and worst selling products, most effective promotions and offers, and channel performance (e.g., email, web, social, etc.).
It’s important to tailor financial reports based on campaigns. Accountants and other finance professionals can help you with this. There are also many tools that help with it too.
Additionally, it’s also a good idea to make sure you accurately record any expenses that were necessary for business during the holiday rush. Not only can this help you budget for the following year, but you may find that some of them can be used as deductions for your 2018 taxes.
6. Identify Q1 Pet Projects
Slowing sales don’t mean your business must, or should, come to a stop. For many business owners, the first few months of the year present the perfect opportunity to give some TLC to all the projects that take second seat the rest of the year.
Though these vary based on industry, many small business owners take this time to work on employee and workplace processes, evaluate marketing initiatives, improve company culture, etc.
Take time to consult employees or department heads to determine what parts of your business can use some improvement, and then come up with a plan to make the slow season a productive one and improve your chances at having a successful new year.
As signs of the holiday start to wither and disappear, it can be difficult to get back into the swing of things, especially when revenue and traffic significantly slow. However, as much as it is important to prepare for the business season, it’s equally important to do so as you transition to business as usual. Use this deceleration checklist to keep your business on track and ready for the next seasonal uptick on your radar.