Ah Christmas, it’s upon us again. Yes, whether it agrees with our morals or not, Christmas retail is well underway, Christmas jingles are filling the malls and Santa’s jolly face is lining our streets.
Christmas is both a joyous and stressful time, and can be a tricky one for business owners. As a business owner or operator, it’s important that you’re prepared for Christmas (and I bet there are a few things you haven’t considered yet):
1. Annual Closedown
If you’re closing down over Christmas make sure you give your staff at least 14 days’ notice. They are entitled to public holidays on Christmas Day & New Year’s Day and can arrange to take paid or unpaid leave during the other days that you are closed.
If any staff have accrued a large amount of leave this may be a good time for them to use up a significant amount of it.
2. Keeping it Open
If you’re staying open throughout the Christmas period, start planning your rosters well in advance. At the very least you will need someone to take on the “must-do” jobs (like payroll, clearing voicemail, banking cheques); these often fall to the business owner.
If you only have a few staff in the office, make sure they have “emergency” contact lists for the relevant managers and suppliers, in case anything goes wrong.
3. Extra Staff
If you plan on keeping up a full service, hospitality or retail for example, start thinking now whether you’ll need to take on extra staff — casual, part-time or fixed-term.
Universities and senior school students will all be finishing before the end of the month, so take advantage of the influx of short-term labour and advertise now.
Alternatively, ask around; employees’ or friends’ children may be available.
4. Tax: Gift Giving & Business Entertainment
A few tax reminders for the Christmas period: Staff Christmas functions are 50% tax deductible and staff/client gifts are 100% tax deductible (just keep the latter below $1,200 per year per employee to avoid Fringe Benefit Tax).
5. Telling your Customers
Make sure you tell your customers what your seasonal hours will be. There’s nothing worse than someone turning up at your door only to find you’re not open for another hour as it’s Christmas Eve — they’ll most likely go somewhere else! Plus, use this chance to stay “top of mind” with your customers and remind them of your business; send a card, voicemail, email or phone call or even advertise in the local paper.
6. Managing Stock
Organising stock can be a daunting task at this time of year, but it doesn’t have to be. Go back to last year’s figures and create a projection for the same time this year.
Having enough stock for Christmas, but not so much that you need a big sale afterwards is always tricky.
7. Cash flow
Start planning for some important dates now so you’re not caught by surprise: GST & Provisional Tax are due on 15th January, PAYE on 20thJanuary, then GST again on 15th February
8. Bargains at the Sales
For some, Christmas is synonymous with “Sale”. Consumers have come to expect Christmas specials that make their gift-giving dollar stretch as far as possible. However, before you jump into the mix yelling “Me too!”, consider the impact that discounting will have on your profit and on your customers’ impression of the value of your products and services.
You don’t have to compete with the big market players on price; you’ll most likely lose (both profit and reputation!). Think about adding perceived value to your existing business, rather than just decreasing price.
But also keep in mind your stock levels — if you bought in seasonal stock that hasn’t sold, a clearance sale to turn it into cash may be the best solution, but summer has a long way to go.
9. Existing Customers
Christmas is a great time to thank your existing customers for their business. Send a promotion out to your client database, offer free Christmas nibbles at your HQ or store.
Also take some time to consider who your best customers are and how you can either find more customers like them or make them even better! What more can you upsell? How can you give them better service (with the hope that they’ll then buy more or visit more often). Can you ask them for referrals?
10. New Customers
The other side of the coin is new customers. Over the holiday period take some time out to think about what you’re doing to attract new customers. Why should people buy from you instead of your competitors? What is your point of difference? Does your advertising reflect this? Are you doing enough advertising or any at all?
11. New Year’s Resolutions
Continuing on the planning streak… Reflect on the year that’s been. What did you achieve, what changed — are you where you thought you would be? Then look ahead to 2019 and ask yourself where do you want to be in 12 months’ time? Or 24 months’ for that matter? Set some goals and talk through them with your advisors and your staff, what will their contribution be?
12. Taking Time Out
Finally, make sure you take some time out! You may not be able to take 2 full weeks off work, but make sure that at the very least you get out of your workplace and spend some time resting and doing what you enjoy.
Turn your phone off, get away. If you need to keep an eye on things, cloud systems like Xero allow you to monitor movements whilst out of the office.
Not sure how to implement these cloud systems? Get in touch with Engine Room Chartered Accountants on 0800 236 446 and we can show you how.
Keep calm, it’s only Christmas
The Engine Room offices will be closed for the Christmas period from midday 21st December until 8:30am Monday 14th January.