How to maintain a competitive edge during the festive season
Monday October 1, 2018
Avoid financial pressures
As we approach the start of November, our hottest summer in recent years is now a distant memory and we’re firmly in the winter season. So much so that we’ll start to see Santa’s grottos opening their doors, Christmas illuminations and ‘German markets’ popping up in our towns.
Christmas is always a busy time and consumer spending levels naturally start to spike. In the last three months of 2017, household spend increased by 0.3% on the previous quarter . It’s a time of year when people are spending more, but amid all the festivities it’s still important for management teams to take stock and plan for the year ahead.
Take stock and plan before you put your feet up
First things first. Before winding down and enjoying the festive season, it’s important for business owners to use the last few weeks of the year to reflect on the 12 months that have passed. Create a checklist of everything you need to tie up before the calendar year draws to a close and evaluate your business’ successes and failures. For professional services firms, such as architects or law firms, the last few weeks of the year are often quieter – at least for those without a December year end. This is when management teams should be finalising 2019 plans and their business strategy for the year ahead.
Also remember to take account of the December fluctuations you may experience, such as bad weather or staff shortages. For some, like those in the retail, events or hospitality sectors, it’s often a jam packed few weeks. This uplift in activity needs to be factored into financial planning, too – ensuring cash isn’t tied up and can be used to spend on higher levels of stock, staffing levels or events.
But December can also be a strain for many businesses. Paying staff through quieter periods and navigating issues that are rife at this time of year, like delayed payments, can mean money is tight.
If a business isn’t in a good place financially, the Christmas period can be the tipping point. It’s important that management teams seek advice early on and use tools, such as invoice financing for example, to help bridge payment gaps which could result in distress.
Make the most of the Christmas season
Tapping into a calendar moment can help to drive sales. Christmas is the prime time to do this, and it’s not just those selling directly to consumers who can benefit. Those operating in other sectors can also use the period as a time to take stock and look to the year ahead.
It’s a time firms should look to upsell. Creative firms, such as marketing and advertising agencies, should upsell support for clients that want to proactively showcase Christmas credentials, campaigns or initiatives. This time of year can offer a whole realm of new business opportunities, so it’s important management spot the right sort of projects for their business proposition. This includes being able to deliver on promised work whilst knowing you are going to get paid by the prospective or existing customer. Scoping out potential clients’ financials and doing thorough due diligence is essential before onboarding, to ensure your own company doesn’t fall short by late or, worse, no payments.
Professional service and creative firms aren’t the only ones exposed to shortfall. In the 12-month period to August 2018 alone, 28 UK retailers, 2,085 sites and almost 40,000 employees were recorded as being affected by an administration process . More than ever, retailers need to be proactive to win customers over and highlight their USPs to stand out amidst floods of competition. And, if retailers have one opportunity to do this, it would be Christmas when consumers are gift buying, stocking fridges with feasts and dining out more frequently with friends and family.
Shop owners can make the most of this by keeping shelves stocked with best-sellers, increasing opening hours so individuals can shop around working hours, and consider using ecommerce as another selling channel. Bricks and mortar certainly isn’t dead, with roughly 85-90% of shopping taking place in store , but having a virtual and physical presence gives the buyer the convenience they want, and encourages around the clock spending.
Get into the Christmas spirt
Christmas is a time for celebration and indulgence. So, use it as an opportunity to treat your customers and staff alike. Going the extra mile during the festive period can work wonders for goodwill and loyalty for the year ahead.
Use December as a time to drive employee engagement, whether that’s more flexible working hours or festive outings for example. The work-life balance can become more of a struggle for employees during the social season, so doing your bit to make their Christmas-duties possible won’t go unnoticed.
It’s also the time to reward loyalties. A little extra financial boost at this time of the year doesn’t go amiss by anyone, just make sure it’s factored into cashflow forecasts well in advance.
For customers, consider hosting discounted or on-the-house strategic planning sessions for the year ahead. Identifying business priorities, and the services you can offer to help your customer attain these will give you extra ‘brownie points’. Or, better still, it can open doors to new business opportunities.
Make the most of Christmas networking
We all know that getting out and about networking is part and parcel of working life and is a crucial way of building relationships. Sometimes finding the time to do it is the tricky bit.
Making the most of the uplift in local or industry events over Christmas will ensure you’re visible. The London-Essex UK Finance Corridor is a hub of business activity – but with this comes rife competition. It is essential for the firms operating here to stand out from the crowd and ensure they have a strong presence in the circles they operate in. Attend or organise social activities like festive networking, ringfence time to complete charity work or donate working hours to a good cause. It’s often the only time of year businesses get to do this, so make the most of it.
Typically, professional services firms often wind down as we near the festive period – in contrast to retail, leisure and hospitality. So, investing this time in taking stock for the year ahead, finalising 2019 plans and getting out and about will put a firm in good stead for the upcoming months.
First published in the Essex Chronicle in October 2018.
Use December as a time to drive employee engagement.Glyn Mummery Restructuring Advisory