Monday, November 25, 2013

The Australian Small Business Guide to the Festive Season

Poor trading conditions have seen an increase in the number of businesses collapsing, especially small businesses. Strained cash flow has meant that small businesses are feeling the pressure, but with the festive season up ahead, companies do have a chance to develop a competitive advantage if they plan efficiently. Evaluating your expenses, cutting back on running costs and choosing to rent office space for shorter spans of time can all make the difference to your bottom line. And, importantly, as we head closer to the end of the year, planning effectively for the festive season could see your business start the new year in a stronger position.

The Current Climate For The Local Small Business

The Australian Securities and Investment Commission (ASIC) has released figures showing that 81% of businesses that filed for insolvency in 2012/2013 had been small businesses with less than 20 employees. The construction industry fared the worst of all, accounting for 24% of the total number of insolvencies. It was followed by the retail sector, which contributed to 10% of collapsed business endeavours.

And, the experts say, when large companies go under, smaller companies are likely to follow in their footsteps. Because of the complex nature of business relationships, smaller companies that rely on the business of their larger counterparts will suffer a loss in revenue when that channel is closed. By way of example, the collapse in the construction industry has had a ripple effect and affected transport companies, excavation and building as well. And, as things become tougher, profit margins are also shrinking back.

The ASIC says that 42% of collapsed businesses cited poor strategic business management as the biggest reason for failure. 41% blamed high cash use or poor cash flow for their demise, while 32% said they were running at a loss. The tightening of regulations by the Australian Taxation Office has also been identified as one of the factors that has turned the pressure up on small businesses.

Using The Festive Season To Create Opportunities And Influence People

The festive season is the biggest spending period in the local consumer buying calendar. And this year the experts say that consumers are looking for great deals as well as exemplary customer service when they are doing their shopping. Businesses that want to turn things around should be planning their Christmas campaigns and getting ready to create more sales opportunities.

November: Getting Your Shop In Order

The next few weeks will be invaluable for businesses as we approach the Christmas season. Businesses are encouraged to maintain good communication channels with their clients in the lead up to December. A loyalty program is an effective way to create targeted campaigns that result in more sales. Early bird promotions and offers are also best suited a few months ahead of a big spending period, as they allow you to extend it. You can do this by promoting your offers on social media channels, app messages, text and email marketing to your client base. Do some work for your customers too- tell them what makes a special gift and let them know which of your items could sell out ahead of the festive season, as an incentive for them to get their shopping done earlier.

So, why is it important to get it all done now? Research shows that together November and December are responsible for between 20 and 40% of annual sales. By the end of November you can start introducing festive season graphic elements to your correspondence. For businesses offering customized gifts, an early start is important so you can have the goods ready on time. Also think about offering value-added services like gift wrapping, or free shipping, if you operate online, for people who order before November.

Putting The Finishes Touches On For December

December is equally important, as it is at this time that people have their extra cash in hand and are looking for wise ways to spend it. Gift vouchers are good to have, as they provide the universal solution for the person who has everything. As you get closer to December be more specific and provide more guidance on gift selection and product detail.

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