Christmas in July: How retail businesses can start preparing for the holidays

The holiday season is one of the most important times of the year for retail businesses, which is why it's never too early to start planning ahead. According to recent research from Salesforce, 42% more shoppers worldwide and 37% more in the US said they plan to start buying gifts earlier to score better deals.

Getting organized this summer gives you a better chance of maximizing holiday sales and delighting customers-while minimizing your stress levels and workload. If you're looking ahead to the holidays, here are eight steps you can take now to prepare: 

1. Apply for inventory financing

If you have big inventory orders to purchase and need some financial wiggle room, consider applying for inventory financing. You can pay for your materials and supplies upfront, saving your cash flow for inventory labor and storage costs, regular operational expenses, and holiday marketing. 

Here are three solutions to consider for financing holiday inventory:

1. A business line of credit is a nice option if you want more flexibility with your inventory purchases. 
2. A business term loan is helpful if you need to order products or supplies in bulk to get a discount from your supplier.
3. A merchant cash advance can get you quick funding if you don't have a stellar credit score. 

Before you apply for financing, it's a good idea to:

• Review your finances, especially your cash flow forecasts and holiday sales forecasts.
• Calculate how much money you need to borrow.
• Decide between an online lender and a bank.
• Gather your documents for the loan application. 

2. Order inventory 

Ordering inventory can be tricky; you need to order enough to meet customer demand, but not so much that you're sitting on dead stock. That's where your business's records come in handy. Here are some strategies you can use to figure out exactly how much inventory you need: 

• Review last year's holiday sales data, including total sale volume, individual product performance, returns, and restocks. It's also smart to pay attention to patterns, like periods of time when inventory flew off the shelves. 
• Generate or review sales forecasts for the rest of the year to see what's in store.  
• Review your profit and loss statement to gauge your business's current financial health. From there, you can assess whether or not you need to change your pricing structure or offerings before the holidays. Maybe you want to double-down on selling affordable products at higher volumes, for example, or narrow your product selection to focus on items with higher price points.
• Consider external factors and consumer shopping trends. Do some online research to find out if, say, worsening inflation is causing customers to pull back from big purchases this holiday season. 

3. Get in sync with your vendors and suppliers 

Your vendors play a critical role in your holiday season success. That's why it's smart to get on the same page before you're crunched for time. Organize a catch-up call with your suppliers to order inventory, go over schedules and potential setbacks, and make requests. Maybe you need to negotiate a discount on a big order, for example, or ask for certain products on an accelerated timeline. 

Just remember: suppliers are busy, too. The more considerate you can be with your requests, the more respect and courtesy you're likely to get in return. 

Now is also a crucial opportunity to change suppliers if necessary. You might want to consolidate vendors to save money or replace an existing relationship if it's not working out. 

4. Put a marketing plan in place 

Effective holiday marketing can help you attract new customers and bring in extra sales for months leading up to the holidays. Start by reflecting on your marketing goals and plans for the season. Jumpstart your brainstorming and vision by asking yourself these questions: 

• What kind of messaging do you want to put out this year? 
• How will you account for customers' changing attitudes and needs in your holiday marketing? 
• What types of promotions do you want to run? 
• How far in advance do you want to start promoting certain offerings? 
• What campaign style do you prefer? 
• Which marketing strategies have you had success with in the past? On the other hand, what hasn't given you a strong ROI?
• What new distribution channels or avenues do you want to explore this year? 
• What's your marketing and advertising budget?
• Do you have the resources and time to do marketing in-house, or would you prefer to outsource it?

Once you clarify your goals and capabilities, you can develop a plan and outline a realistic budget. The tried-and-true holiday marketing strategies-email campaigns and promotions, paid social advertising, and content marketing-are always a good place to start, but you can also explore partnerships with other businesses, influencer marketing, and giving campaigns. 

In general, don't be afraid to start creating campaigns early, like the end of this summer. With shoppers more eager (and price-wary than ever), it's a good idea to get ahead of the game. 

5. Assess your hiring needs

If you need to hire seasonal workers during the holidays, summer is the perfect time to get your ducks in a row. You might need additional warehouse workers, delivery crew, retail staff, marketing consultants, or inventory consultants. 

Consult your staff list from the past few holiday seasons, then review any employee feedback you have about what went well during the holiday crunch-and what didn't. From there, create a list of roles you need to hire for, then either start posting job ads or reach out to former seasonal employees to gauge their interest in returning. 

It's also crucial to review your compensation plan for seasonal employees to make sure it's competitive and adjusted for inflation. Thoughtful, equitable compensation can help you attract excellent talent. You may also want to update your training program for seasonal workers and hold a meeting with managers to get on the same page before hiring. 

6. Conduct tech audits

Auditing your equipment and technology before heading into a hectic season can help prevent errors and minimize financial losses. Here are a few places to start: 

• Inventory management software: Make sure your inventory management software (like Zoho Inventory or Orderhive) generates sales records, sends automatic low stock notifications, syncs with your point of sale system, allows multiple users, and is easy to understand.
• Point of sale (POS) system: A good POS system should have a dashboard that shares sales, cash, and inventory data in real time. You may also want to find a POS provider that integrates with your accounting software or helps create employee shift schedules. 
• Customer service programs and software: Customer service tools and platforms (like ZenDesk and Help Scout) can help you nurture existing customer relationships and connect with new potential customers. You can use them to address customer inquiries, handle returns, and answer questions in a faster, more streamlined way. 
• Equipment and machinery: Inspect the equipment your business regularly uses, from delivery vehicles and desktop monitors to business-specific items. Make sure everything is working properly and safe to use, and that your employees are correctly trained on the machines and equipment they interact with every day. If you need to invest in a new item or upgrade something, equipment financing can help.  

7. Check up on your customers

Summer is a great time to re-familiarize yourself with your customers-not just who they are, but what their shopping patterns, challenges, and goals are this holiday season. Connecting with your customers ahead of the holidays gives you insight into what they need and how you can best deliver it. Here are some strategies: 

• Analyze internal data: Check out your demographic data, customer acquisition rate, customer retention rate, net promoter scores, and online customer reviews. 
• Do some research: It's critical to stay up to date on the latest studies and announcements that might affect your operation. In addition to perusing industry-specific news, spend some time reading small business news sites (like Forbes, US Chamber of Commerce, Small Business Trends, and CNBC) and checking out your local news outlets. 
• Send a survey: If you want direct feedback from the people you serve, send a brief survey to your customers. You could ask about specific products, your business's hours of operation, their shopping preferences, or their pain points. 
• Pay attention on social channels: Social media is a great place to take note of what your customers appreciate about your business-and what they want from it. In addition to reading your page's comments and DMs, you can also check up on your competitors' pages to see what their customers like and dislike. 

8. Revamp your digital channels

Expanded digital options are no longer just nice to have-they're a necessity for small businesses. Consumers expect ease and convenience when they engage with retail businesses, especially during the hectic holiday season. 

Remove any potential roadblocks for your customers by streamlining your digital tools and channels now. Here's how:

• Use Google Business Messages: Give customers an easier way to connect with your business and ask questions about your store hours or customer service. Instead of having to visit your website or call you, customers can send you a quick message straight from the Google page where they found you.  
• Update your business website: Hire a web consultant to make improvements so your website is easier to read, navigate, and access on mobile devices. It's also smart to prepare your website to handle a surge in traffic volume, either by reviewing your hosting platform or installing a caching plugin. 
• Introduce more payment options: Give your customers choices beyond cash and credit cards. Think: contactless payments, Apple Pay and Google Pay, and flexible ecommerce payment options like PayPal or “buy now, pay later” payment plans. 
• Expand your shopping options on social media: Share products and links via social media posts and ads so customers can make purchases straight from their newsfeeds. 

Get more support for the holidays 

If you've read this far, you're already one step ahead when it comes to holiday prep, but the more support you can have, the better. If you need a financial boost-to hire seasonal hands, update your technology, or purchase inventory-consider getting a loan from Funding Circle. 
Our business term loans have fast turnaround times and flexible repayment periods, so you can get the funds you need without adding extra stress to your plate. Learn more about our options or apply today in just minutes.