The survey results demonstrate the significance of the holidays for small businesses, particularly this year.
Many small businesses in the United States are preparing for the 2022 holiday season by putting their holiday cash flow first, thinking of ways to encourage employee and customer retention, foreseeing economic challenges, and emphasizing social media sales.
Recently, business leaders were surveyed by small business lender Kabbage from American Express for its first Small Business Holiday Report, which highlights the key trends among American small businesses as the holidays approach.
Putting Holiday Cash Flow First
The results of the survey show how crucial the holidays are for small businesses, particularly this year. Nearly one in four (24%) of the companies polled stated that their ability to survive into the following year will depend on their upcoming holiday sales. Recognizing the gravity of the situation, businesses are putting their health and growth first, while closely monitoring their cash flow.
As they think about managing their cash flow and rising costs, 60% of small businesses surveyed are focused on investing in new tools. Marketing tools (23%) and payment transaction systems (e.g., a line of credit, a business checking account, and a new payments provider) (20%) were the most frequently mentioned tools. Similarly to this, respondents stated that their top concern going into the holiday season is their company’s overall cash flow (32%) followed by budgeting (25%) and inventory management (25%).
The data demonstrate that small companies are acting to address these cash flow issues. During the holiday season, 21% of respondents say they’ll get a small business loan, and 32% say they’ll use it to pay for business expenses like inventory costs and typical cash flow gaps.
Considering Customer Attraction and Employee Retention
64% of small businesses intend to increase marketing to draw customers in order to fully take advantage of the upcoming holiday season. Sending email campaigns with a seasonal focus (26%) and promoting holiday product bundles (26%), were the top two strategies identified. The same goes for the 25% of small businesses that plan to offer holiday-related customer promotions and incentives.
The retention of current employees is a priority, even though 53% of small businesses intend to change their budget to account for additional holiday costs. Giving holiday bonuses to both current and prospective employees is the top way small businesses (those responding to the survey) are preparing their workforce for the holidays (32%).
Economic Difficulties to Expect
According to the data, small businesses are anticipating the effects of economic obstacles like supply chain problems and rising inflation during the holidays and developing a plan to overcome them.
The most common way respondents (64%) plan to get their business ready for the upcoming season is by stocking up on inventory (30%). The fact that 25% of small businesses are diversifying their supplier base and 74% of small businesses are concerned about supply chain issues as the season approaches is supported by this information.
In an effort to meet these upcoming challenges, 27% of small businesses are controlling customer expectations and communicating realistic shipping dates in order to safeguard themselves against potential supply chain problems. Additionally, 30% of respondents said they anticipated using small business loan money to buy more inventory, taking their cash flow into account.
Taking Advantage of Social Media
46% of respondents said that between 20% and 30% of their holiday sales will come from online channels in our increasingly digital world.
Nearly half (47%) of respondents said that social media channels will account for between 10% and 20% of their holiday sales. As 53% of respondents named Facebook as the social media platform that generates the most revenue, it is followed by Instagram, YouTube, LinkedIn, Twitter, and TikTok. Facebook continues to be a crucial marketing and customer acquisition channel. This is consistent with the findings of our most recent Small Business Recovery Report, which showed that small businesses are increasingly utilizing social media advertising, with 47% saying it has the biggest influence on customer acquisition. Out of those, Facebook was noted as the top platform for advertising, with nearly twice as many users as Instagram, which came in second.
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