It's hard to believe that the fiscal year is coming to an end and the fourth quarter is already upon us. And we all know what that means for small business owners: work, work, work! But also: opportunity, opportunity, opportunity!
According to the National Retail Federation, retail sales for November and December of 2011 are expected to increase 2.8 percent to $465.6 billion. While that growth is lower than the 5.2 percent increase retailers experienced last year, it’s slightly higher than the 10-year average increase of holiday sales, only 2.6 percent.
Regardless of the rate of increase, the main question for small business owners remains the same: How can you get your share of that $465.6 billion?
I’m often asked about the best way to embrace the fourth quarter madness. How can one ensure a successful fiscal period for the close of the current year and a strong start for the new year? After all, the fourth quarter brings an opportunity to look toward the next year; you can drum up business during the holiday season that can help you in the next year, too.
I sat down with Libby Ladu, president of Right Brian Ventures and an in-demand financial adviser, who has been providing sound financial insight to the Count Me In community for more than five years. She agrees that this is an especially challenging period.
“The fourth quarter, which has traditionally been a catch-up for lots of retailers, has grown especially problematic for brick and mortar stores given the increase in online spending in recent years,” she says. “That means you have to figure out ways to get people into your shop—or your website—that aren’t just based on price.”
She adds, “You’ve got to make the buying experience more special. I like promotions that have to do with the season, that are short-lived, so you’re not locking yourself into permanent discounts. You also could do a promotion around getting a head start around the New Year, if that works for your clientele.”
Here are some more of her suggestions for a profitable end to the fiscal year.
1. Know your financial goals. In an ideal world, you will have done this in August or September, but there’s still time now. The idea is to fully know where you’re going in the fourth quarter, so you know what you need to achieve in this period. Who knows? You could either be ahead of your year-to-date goals, or behind them. But you need to know. Once you’ve figured that out...
2. Get creative. You need to do something to differentiate yourself from the crowds, and to distinguish the customer buying experience. Some retailers rent out empty storefronts and create pop-up stores, just for November and December. This is a great way to have a larger presence during the season. Plus, you have to buy the retail space only for the two to three months going into January.
3. Don't discount excessively. You have to be careful. If your fourth quarter is how you make your yearly profit, you don’t want to offer too big of a discount on your products. Offer the kinds of promotions that don’t eat away at your margins. Also, don’t discount your top-selling products. If they’re already selling well, why discount them? If you want to offer an incentive to shoppers, discount products that aren’t selling well, and attach them to products that are.
4. Partner up. It’s a great idea to partner up with other small business owners, especially if your products or services are compatible. That means sharing a storefront with another company or offering a promotion in conjunction with another brand.
5. Be charitable. This is a good time to promote your charitable giving. People love to donate during the holiday season, and they love to buy socially-responsible products. Promote how a percentage of sales will go to charity. It’s the perfect time to do good and do well. It’s also a great incentive to get new clients signed up before the start of the new year.