Black Friday, Small Business Saturday and Cyber Monday are one path to annual profit for small business owners. Yet, many business-to-consumer companies (and perhaps business-to-business companies, too) are unprepared to maximize the Thanksgiving holiday weekend.
Retail and consumer businesses are hard to make profitable. High inventory costs, low margins and tough competition create a perfect storm that sucks away profit before the business owner sees it. In many consumer businesses, they do not recognize profit until the hopeful onslaught of customers purchase for the holiday season.
In the 1960s, the Black Friday moniker was given to the day after Thanksgiving by Philadelphia police as they dealt with throngs of shoppers. The name and concept of a big holiday shopping day became popular in the 1980s.
As a child of the 80s, I remember the growth of Black Friday. Lines that wrapped around stores. Shoppers who camped out in order to the first to get limited quantities of sale items. Hordes of people running over each other and fighting over popular products. Black Friday became a holiday within itself.
Due to online shopping, the intensity of Black Friday in-store shopping has died down. However, the opportunity to make big sales and profit over the Thanksgiving holiday still exists.
Even though a lot of people will shop for Black Friday, Small Business Saturday and Cyber Monday, business owners still need to plan to capitalize on the popularity of this shopping weekend.
The old adage says that if you fail to plan, you plan to fail.
Small business owners cannot expect big sales unless they have a plan to draw customers. The big box and online stores have big dollars to advertise. So, small business owners have to be nimble and creative to promote themselves in a way that is remembered by buyers.
Here are a few suggestions to make the most out of the holiday shopping blitz.
Know the numbers — How much does the business need to sell in November to cover the additional operating expense of holiday hours, increased inventory needs, and the staffing necessary to handle large crowds. Once you determine the break-even-point for operating with these additional expenses, then calculate the number of sales needed to create desired profits.
Start advertising now — Holiday advertising has already started. What is your business doing to promote holiday shopping and sales. The early bird gets the worm. Keep your business in the minds of your best clients through direct mail, online advertising, email blasts, in-store promotions, and more.
Connect with current customers — The loyal patrons of a business are the best customers to advertise holiday sales to. They are familiar with the brand. They trust the store. They are used to coming to the business. Develop a marketing plan that specifically inspires current customers to come back. This marketing plan may include a loyalty program or special offers only available to prior customers.
Create specials — How will the business entice customers to spend without sacrificing profits? Business owners should consider discounting old inventory, discounting products with the highest margin, creating a significant discount for one highly desired product, offering giveaways, developing upsell opportunities, capitalizing on impulse purchases, and giving discounts for sales over each customer’s break-even-point (yes, retail stores should know the amount each customer needs to purchase in order to make a profit).
Leverage the web — Big retailers may have big advertising budgets, but small business owners have loyal social media followings and can be nimble with online Google and social media advertising. Consider creating specials specifically for online shoppers. Give new followers to your social media pages a discount. Advertise on social media within specific interest and geographic areas. Create instructional reels that draw attention to the brand. Host live online events to engage existing followers.
Partner with similar businesses — Consider creating joint sales opportunities with strategically aligned businesses. A strategically aligned business is one that sells a related product to the same target market. For example, a cosmetics retailer can partner with a spa to offer mutual discounts. Or a furniture store can partner with an accessories or electronics retailer.
Another idea is to organize a shopping tour of local businesses that are close by. Serve food and drinks, add some entertainment, throw in some gamification, and create a shopping experience that customers will flock to.
Exhibit at holiday shows — Holiday shoppers who go to shows are hungry for deals. Have a presence at every show in the local area. Offer specials, and offer even deeper discounts for show customers who visit the local brick and mortar (or online) business.
Black Friday, Small Business Saturday and Cyber Monday may seem like easy ways to generate massive sales, but the revenue and profits will not just walk in the door. There is too much competition in the market to be passive. Plan, entice customers to purchase from you, and focus on how to make profits from every single sale.
Jamar Cobb-Dennard is a business broker and attorney. To learn more about how to buy or sell businesses, contact Jamar at jamar@jamarcobbdennard.com.
