Useful Tips on How to Budget Your Business for the Holidays
While the holiday season is the time that turns the most profit for business owners, it can also be the most expensive. Business owners need to ensure they don’t overestimate what their profits will be so that they don’t overspend. To help you avoid this common pitfall, we created a short guide on how to budget your business for the holidays.
1. Have an Overall Budget
While you’ll want to create an individualized list of your holiday strategies, make sure you set your overall budget before assigning dollar amounts to compartmentalized items. It’s extremely important that you have a set-in-stone overall budget. You don’t want to find yourself pouring money into one strategy only to realize you have nothing left for the next one. Once you set this budget, you can then begin to split it up accordingly.
2. Focus on Ecommerce
Online marketing will provide your main source of exposure. You’ll want to focus the majority of your budget into this area. Know that while this may be your main focus, it’s incredibly easy for this to become an unprecedented money pit. Stay aware of the most common holiday struggles of ecommerce, and use your knowledge of these to come up with a solid marketing strategy.
3. Look at Last Year’s Sales
Inventory is a tricky area to budget for, as having too much or too little can negatively impact your business. Use last year’s holiday sales as a starting point, and evaluate how much you think they’ll increase this year.
4. Don’t Overspend on Your Open House
An open house offers a great way to show appreciation for your customers and build relationships. You shouldn’t, however, focus too much of your budget on this. You won’t need much more than light refreshments and a few Christmas decorations. You should consider holding a holiday raffle to attract more people to your event.
5. Consider Staff
While you may want to put some of the budget that would go toward staff somewhere else, we recommend you don’t skimp too heavily in this area. Customers have an agenda during their holidays, and slow service can throw off their schedule. If the holiday season will create too much work for your current staff to keep up with, make room in the budget for seasonal employees.