Black Friday is coming soon. Are you ready?
Marcus Lemonis is. The businessman and host of CNBC's The Profit has seen countless small businesses struggling to make the holiday sales boom work in their favor. This year, as part of its sponsorship of The Profit, Lemonis teamed up with Ink from Chase to provide advice for small business owners.
Here are his top 10 tips to make sure that your small business has a very merry Christmas, and a happy New Year.
1. Start planning early.
If you're only just beginning to think about Black Friday, you're way behind the ball. Lemonis says that small businesses should start planning for the holiday season over the summer. At the very least, you should be working on inventory and seasonal hires 90 days in advance. So, if you still aren't sure what the holiday season holds for your business, now is the time to get the gears moving -- fast.
2. View the holidays as a time to stock up, not clear out.
"A lot of small businesses fail because they think 'this is a great opportunity for me to dump everything,' instead of saying 'this is a great opportunity for me to go into the black and make money during this period,'" he says. Going into the holiday season isn't the time to plan on clearing out your store. It's time to stock up. Lemonis recommends thinking of this not as the end of your fiscal year, but as the beginning of a new fiscal year, fully stocking your business with your best offerings for holiday shoppers.
3. Make sure you have working capital.
You've heard it a million times before: you need to spend money to make money. For the holiday season, the cliché is true. "You have to spend money before the traffic comes," says Lemonis. Often, small businesses enter the season without the working capital to cash in on holiday shoppers. It's obvious advice but often overlooked, so make sure you have a line of credit going into November.
4. When in doubt, overstaff.
Tis the season of seasonal workers. "Be prepared to hire some temporary staff," he says. "This is the moment where if you're a small business, you call every friend, every cousin, every aunt, just to cover the register." For businesses that aren't sure what to expect, it's better to have workers waiting around during slow periods than customers who are unable to make their purchases when the store gets hectic. If new customers leave feeling frazzled and dissatisfied, the chances of them coming back the other 10 months of the year are slim to none.
5. Find employees who will actually show up.
Hesitant about hiring employees for the holidays without much experience? Don't be. For seasonal workers, amazing product knowledge is much less important than being enthusiastic and reliable.
"I hate to say this but I would hire more women than men," says Lemonis. "I know they're going to show up." Of course, it's not really about gender. It's about finding employees that you can depend on. Lemonis recommends looking to existing customers who might love an employee discount for the holidays, or asking reliable staff members to see if their friends and family are looking for a seasonal job.
6. Collect data.
If you collected information on your staffing, hours and sales last year, this holiday season is going to be much easier. If you didn't – a common small business mistake – now's the time to play catch up. You might learn the hard way when you overstaff or understaff, but at least next year, you won't have to deal with the unknown… again.
7. Stay away from Black Friday.
There is an urge to try to copy mega brand's famous Black Friday sales at your small business. If price cuts work for Walmart, they will work for you, right? Wrong, says Lemonis.
"I stay away from Black Friday. Completely," says Lemonis. Even in his largest business, Camping World, Lemonis says that doesn't try on the same scale as retail chains like Walmart or Target during the holiday season. Don't do huge price cuts on Black Friday if you can't guarantee that you'll be able to earn that money back on other products.
8. Celebrate Small Business Saturday.
After embracing the fact that you aren't going to beat Walmart on Black Friday, focus on Small Business Saturday. If you're offering deals or events to bring people into the stores, schedule them on the Saturday and Sunday after Thanksgiving. Remember, just because people aren't crowding into your shop on Black Friday doesn't mean you don't have something unique to offer.
"I think that responsible citizens… are starting to really buy into Small Business Saturday," says Lemonis. "I think you're finding that the millennials are saying, I'm going to make the crazy buys on Friday, and I'm going to support the small businesses on Saturday."
9. Instead of cutting prices, market experiences.
Instead of sales, look at what unique experiences you can provide customers. Things like barbeques, gifts for kids and free coffee or doughnuts can draw huge crowds. Plus, you're provide customers with something special without cutting into your profits. In the words of Lemonis, "you would be surprised how many people would get in a line down the street for free food."
10. Look ahead to next year.
With new customers coming through your doors, make sure to collect their information so you can reach out to them the rest of the year: name, phone number, email address. "It all boils down to the data collection," says Lemonis. Send out coupons and deals in 2015 to remind shoppers that even when the holiday season is over, your small business is still open.