Quick Reads
- Keep track of popular items and ensure you stay up to date with your suppliers to prevent stock from running out.
- Give attractive discounts to encourage sales but make sure they’re not too big.
- Ensure any outstanding payments are up to date and that you’re keeping your day-to-day costs down.
- Once the busy period has passed, take a look at what sold and where you could have spent differently.
Christmas is a great time to get people into your store with lots of festive decoration, thoughtful gifts, delicious food and New Year shopping. Small businesses benefit from an increase in orders. However, there are many costs involved when running a busy sales season. You will have increased costs for stocking your shop, running promotions and everyday running costs. It is key to manage your stock and sales to maximise profits.
How Can Small Businesses Set a Festive Budget?
Small businesses should estimate what they expect to sell and list out all the costs associated with the festive period. Look back at your sales history, current orders and what the customers are asking for to decide how much you will need to spend on:
- Stocks & Raw Materials
- Marketing & Promotions
- Packaging & Delivery
- Seasonal Staff & Overtime
- Decorations & Offers in Store
Leave some money to cover any unexpected costs to help you manage your festive costs.
How Should Businesses Plan Inventory for the Christmas Season Sale?
Businesses can look back at previous sales and see which items have sold well and predict how much customers will want to buy. To help prevent any late shortages, businesses can order stock in advance and keep communication open with suppliers. Creating festive gift sets and gift packs is a great way to get customers to purchase.
This will ultimately help businesses have enough stock to meet demand; however, they should not have too much tied up in stock that has not been sold.
How Can Businesses Manage Cash Flow During the Year-End Sale?
Managing cash flow is especially important for businesses preparing for a year-end sale in India, as seasonal expenses can increase before sales payments come in. Creating a basic cash flow forecast that accounts for supplier payments, staff wages, rent, utilities and delivery costs can help avoid shortfalls. Following up on outstanding payments and reducing unnecessary expenses can also keep enough money available for daily operations.
How Can Businesses Make Festive Discounts and Marketing Profitable?
If you want to increase your profits during your Festive Sale in India, you should offer customers some attractive discounts. Work out the cost of your products and what discount you can afford to offer.
Use marketing tactics such as social media posts, WhatsApp messages, email campaigns and loyalty schemes to reach a larger audience. You could also consider creating some festive packages and time-sensitive offers. This will encourage your customers to purchase while keeping your sales profitable.
Should Businesses Arrange Extra Working Capital Before the Festive Rush?
Extra working capital can support your business with large purchases of stock, seasonal employment and marketing when you run low on cash. Small businesses can also look at loans from banks and NBFCs or government schemes such as:
- PMMY: Offers unsecured credit from institutions to qualifying micro enterprises through Shishu, Kishor, Tarun and Tarun Plus.
- CGTMSE: Offers a guarantee for credit to qualifying lenders providing micro and small business loans but not directly to the business owner.
Before taking out loans, think about how much you will need, what terms you can get and whether you can afford to repay.
Wrapping Up
The time of Christmas and New Year is a great opportunity to grow your business by offering great deals. However, careful planning of your budget, stock and cash flow will allow you to make the most of the festive season.
At Lendingkart, we understand that growing a business might require extra funds to adapt to your changing needs. Our unsecured digital business loan can provide up to ₹50 lakh to eligible businesses that have been operating for 12 months or more. This can be applied for online with minimal paperwork and can be used to cover your working capital, stock and other business costs.
Frequently Asked Questions (FAQs)
1. How can small businesses prepare for Christmas and New Year sales?
Small businesses can prepare by setting a seasonal budget, estimating customer demand, ordering inventory early, planning promotions and keeping sufficient working capital for daily expenses.
2. When should businesses start planning for year-end sales?
Ideally, businesses should begin planning a few months in advance. This allows enough time to review sales trends, arrange stock, coordinate with suppliers and plan marketing activities.
3. How can businesses avoid cash flow problems during festive sales?
Businesses should forecast income and expenses, follow up on pending payments, plan supplier payments and maintain a reserve for unexpected costs.
4. Can a business loan help manage festive season expenses?
Yes. A suitable business loan can help eligible businesses fund inventory purchases, seasonal staffing, marketing and other working capital needs. Borrowers should assess repayment capacity before applying.
5. Which government schemes can help small businesses access credit?
Eligible micro-enterprises can explore PMMY for collateral-free institutional credit. Micro and small businesses can also benefit from credit facilities supported by CGTMSE guarantees through eligible lenders.
