Budget & Inventory Planning for the Holidays

Are you ready for the holiday rush? Even though it’s only October, you might want to start preparing for it soon!

If you own a small business, your sales are likely down from this same time in 2019. COVID-19 shutdowns affected every industry—even businesses that are primarily digital felt the impact. This is one reason why countless businesses have been pivoting online, minimizing their physical footprint while also taking advantage of the potential boost in online sales.

This trend is likely to continue into the holiday season. Rather than deal with crowded stores and malls during November and December, consumers will likely be doing most of their shopping online. You need to have your budget and inventory planning prepared for the holidays well ahead of time to make sure you aren’t slammed by the rush.

Here are a few ideas to ensure that your business’ holiday season is full of cheer and high sales numbers!

Start Working on a Budget

Along with big holiday sales comes big holiday business expenses.

Usually, businesses rely on their previous year’s holiday budget to help guide their budget planning process. However, as things are VERY different this year, piggybacking entirely on 2019’s numbers isn’t a viable plan.

Consider that online sales are likely going to make up the bulk of purchases this holiday season. With that in mind, you need to make sure your e-commerce platform of choice can handle those additional sales without crashing. The last thing you want is your online store to crash on Black Friday! If you believe that you’re going to need extra bandwidth, take care of that right now while everyone else is still focused on Halloween.

If you still have a physical location open, then you might need to hire some extra help for the season. Keep in mind that you will need to train them in all of your COVID-19-related policies, along with your regular employee training programs.

If you’re already overwhelmed just thinking about holiday planning, you could always outsource your holiday budget planning to us. We’d be happy to go through everything and help you generate an airtight budget that will keep things comfortably humming along this holiday season!

Holiday Marketing

There’s lots of competition for shoppers during the holiday season, so you should have a well-designed digital (or physical) marketing blitz planned. If you do any holiday-related marketing, make sure that you have those expenses already budgeted.

Your holiday marketing could be entirely focused on the online space, using digital channels like Facebook, Google, and email campaigns to connect with your customers and share your holiday offerings. If you live in a smaller market, you might also want to take advantage of more traditional offerings like radio ads or even newspapers.

Be sure to look at your previous ROI on holiday marketing to find out where you can best spend your marketing dollars. This year especially, you want to make sure you’re making every cent count!

Make Sure You Have Enough Inventory

While the shipping industry has somewhat recovered from the logistics disaster of COVID-19, shipped items can still take a while to get from point A to point B. If you’re relying on shipping services to order inventory and upping your stock, you should be ordering what you need ASAP to make sure you’re not going to be in short-stocked come November.

Go through your current inventory list and then update your holiday list. It might be tricky to gauge how the pandemic will impact seasonal sales, but you can likely rely on your previous year’s numbers as a baseline, then adjust them from there as best you can.

Inventory Management is Key

So, your budget is in order, and your inventory has arrived! Now it’s time to get everything organized for the holidays.

If you have a single channel to sell your items (like an e-commerce solution on your website), this task shouldn’t be too difficult. You simply need to make sure that you have an accurate count of your inventory across the board. If you rely on multiple channels to sell your items, like eBay, Amazon, and Etsy, then this might take you a little longer, as you’ll need to maintain listings and monitor these platforms for messages and questions. Don’t forget to include any fees for sales that are taken by these platforms!

The holidays can be a stressful time for anyone, and especially for small business owners. If you want to relieve some of that pressure, The Number Worlds would be happy to help you with all of your holiday-related budgeting. Not only that, but by taking advantage of our services now, it will be much easier to take care of things during the upcoming 2021 tax season. To learn more, please contact The Number Works today. Let’s get your holiday season under control now so you can enjoy the end of the year!

Accurate Content to Tell Your Financial Story

In order to craft your financial story, it is necessary to have accurate and relevant content. Necessary steps to create and validate this content are:
Building the foundation: Steps to start the creation of your business foundation include

  • Registering your business
  • Getting a business bank account
  • Selecting a system of record to account for your business transactions.

A separate business bank account and a system of record, such as Quickbooks Online, will keep your business out of your personal life allowing you to easily track dollars in and out, as well as alleviate some headaches at tax time.
Create a budget/forecast: Hopefully you have done your business plan already, which means that you should have created a financial forecast for the first three years of your business. Outlining your expected revenue and expenses for the month. If you haven’t yet, this is an important step in creating your financial story content and should be done.
Reconciling your cash: No matter where you are in your business life-cycle, accounting for your cash is important. Utilizing the accounting system that you have selected should allow this to be a painless process. Comparing your bank account to what you have recorded in your accounting system will not only allow you cash flow visibility, it will ensure that your books are accurate. Any missing cheques, erroneous withdrawals or insufficient customer payments will be quickly identified and can be dealt with in a timely manner making sure no dollar is lost.
Close your books monthly: At the end of every month your books should be closed, and financial statements (income statement, balance sheet and cash flow statement) should be created and read. These statements should be reviewed in detail, understanding each line item and what that means for your business. Each month is like another chapter written in your story, and like a story, each chapter is important and none should be skipped without the risk of not fully understanding the story.
Review your actuals against your budget/forecast: With your budget/forecast already created, and your month end financial statements prepared, the next exercise is to compare the two and note any differences, and then to understand why.  This is calculating your variances and creating commentary. You need to be aware of where your company has been to make sure that you keep on track to where you intend to go. If there are any significant changes to your business roadmap a new budget/forecast should be created.
Following these steps will ensure that you have accurate content to craft and understand your financial story. If you need help with any or all of the steps, we would be happy to help!