The holiday shopping season brings an annual gift to retailers – a surge in retail sales. But with this revenue surge comes the challenge of managing increased sales volume. Dealing with more customers and more sales, while simultaneously trying to meet year-end inventory count deadlines, can leave small businesses running short on staff, low on inventory, and behind on cash flow. Read on for some tips to help you maximize holiday season sales by:


  • Accurately forecasting sales surges
  • Planning for increased staffing and inventory needs
  • Keeping your holiday cash flow positive

Why the Holidays Can be a Hassle

The period between Thanksgiving and Christmas brings in more sales than any other time of year for most small businesses. On average, holiday sales represent 20 percent of annual sales across most industries, according to the National Retail Federation. In some industries, this figure rises to 30 percent or more.

While businesses welcome this increase in sales, it also brings increased work hours and labor expenses. With more sales come more customers needing assistance, more support tickets, more shipping orders, and more exchanges and returns. This increased activity ends up forcing 9 in 10 employers to hire seasonal help for the holidays.

In addition to helping more customers, businesses must spend more time managing inventory during the holidays. More work is required to keep supplies stocked, to unload shipments, to stock shelves, and to process shipments and returns.

Additionally, the holiday shopping season coincides with annual deadlines for year-end inventory counts. Together, all these factors can make the holiday shopping season a hassle for small businesses.

Projecting Increased Sales Activity

In order to plan effectively for maximizing holiday season sales, the first key is to make accurate sales projections. The best way to do this is to perform sales trend analysis using your historic sales data to make objective estimates (rather than guessing).

You will first need a system for recording your sales data. You can do this manually, in a spreadsheet program such as Excel, or in an app specially designed for business intelligence analytics, such as Microsoft Power BI, Zoho Reports, or Salesforce Einstein Analytics. For maximum efficiency, use a BI app that integrates with your point-of-sale and accounting software so that your sales and inventory are updated automatically each time you make a sale.

Once you have a system for recording sales data, the place to begin your projections is by looking at your sales data for last holiday season. This will give you a baseline to build on. You can then calculate your year-over-year sales growth since the last holiday shopping season to project how the upcoming holidays will compare to last year.

Maximize Holiday Season Sales by Planning for Staffing, Inventory, and Cash Flow Surges

You will also need to project increased needs for inventory, staffing, and cash flow. You can do this by extrapolating from your sales projections.

Drill down into your year-over-year sales for individual products to predict which items are most likely to need restocking. For particularly hot items, you will need to pay attention to marketing trends in your industry and to monitor real-time sales performance as the holiday season unfolds and you get a better sense of which items are popular. Inventory management software can help you automate the process of tracking inventory trends, projecting needs, and placing orders for restocking.

You can also use your sales projections to estimate how many additional hours of labor you’ll need to manage additional holiday orders. Look at how many hours of labor you normally use to handle your sales volume, then use your holiday sales growth projection to estimate proportionally how many additional hours you’ll need for the holidays. This will give you a sense of how many workers you need to hire or how many hours of labor you’ll need to handle through automation to manage your holiday sales.

Your inventory and labor projections may indicate that you’ll need additional cash flow to cover your holiday expenses for stocking products, hiring employees, or purchasing automation tools. For instance, as Black Friday approaches, you may need to stock up on inventory, leaving you low on cash until you convert your inventory into sales revenue.

In this type of situation, you’ll need a financing strategy to get you through the interval between when your expenses and when your holiday revenue increases come in. Do a cash flow analysis that takes into account your increased inventory and labor projections to see if you’ll be tight on cash over the holidays. If so, look into short-term financing options, such as taking out a small business loan or line of credit which you can repay after the holiday shopping rush. This provides the financial fuel you’ll need in order to generate extra holiday revenue.

Making the Most of Downtime

Although business generally picks up over the holidays, you’ll still find that some days are busier than others. Take advantage of lulls in the action by using downtime for tasks that need to be done. These can include:

  • Taking year-end inventory counts
  • Processing shipping and receiving orders
  • Stocking shelves
  • Processing returns
  • Bookkeeping tasks

Using downtime to get these tasks out of the way will help you keep up with everything that needs to be done and avoid getting overwhelmed.

Keep Your Holiday Sales Season Manageable

Holiday sales surges can be hard to handle, but they don’t have to be a headache if you plan ahead. Use sales trend analysis to project your increased sales volume so you know what you’re in for. Adjust your staff hiring and scheduling, inventory, and cash flow projections accordingly. If you’ll need additional cash flow to keep up with increased holiday expenses for labor, inventory, or automation tools, consider applying for a small business loan or line of credit.

Looking for more tips on how to maximize holiday season sales? Check out “Ramp Up Your Holiday Marketing Efforts This Year.”

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