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Union Commercial Capital

Small Business Tips For 4th Quarter Planning


For many small businesses, the fourth quarter is the most profitable quarter of the year. Unfortunately, it can also be the most expensive and chaotic. The year’s last months present an excellent opportunity to increase revenues, as shoppers will come out in droves, in-store and online. The fourth quarter is also a good time for business owners to get their financials in order and start thinking about the upcoming year. This Union Commercial capital blog post features some 4th quarter tips for small businesses, and we believe you will find them helpful as you prepare for the busy final months of the year.



Plan for the Holiday Shopping Season

One main reason that Q4 is the most profitable quarter is the holiday shopping season. For your business to benefit from the increase in shopping, make sure you stay on top of trends in your industry and have marketing strategies for the biggest shopping days of the year, including Black Friday, Small Business Saturday, and Cyber Monday. By determining your plan now, you’ll have time to order additional inventory or hire seasonal staff if necessary. You should also take your time to determine your marketing strategy across platforms and create compelling ads that generate buzz about your upcoming holiday promotions.


Plan and Start Marketing Now

Believe it or not, some people start to plan and shop for Christmas as early as June. To stay ahead of the competition, it’s important to get ahead of the curve and develop your marketing strategy well before the holidays so you aren’t scrambling or playing catch up. As you’ve seen big retailers like Amazon do, you can even make up your own sales holidays like Prime Day well before the holidays to encourage shopping without other companies competing on the same day.


By working on strategies, ads, and email campaigns now, you can get everything approved and even scheduled well ahead of time so you can focus on delivering products and providing excellent customer service as the holidays approach.


Stock Up On Inventory

When your customers visit your shop and cannot find the items they want, they will go elsewhere to find them. If you do not have enough stock on hand, you are missing out on sales opportunities and giving a boost to the competition. So, check your inventory to see what you need for the fourth quarter. In today’s fast-paced and on-demand world, consumers expect everything to be readily available, especially items advertised for the holidays. Additionally, stock up on bags, cash register tape, and gift certificates (if applicable) to provide your customers with a seamless, hassle-free experience.


Q4 inventory management is also essential if you own a business in the food and beverage industry, such as a restaurant or a coffee shop. This needs careful planning because fresh food and beverage items are perishable and must be turned over in a specific time frame. Inventory management software can help you track the food and beverage items in stock and what is scheduled to come in from your vendors and suppliers. If possible, look at your Q4 sales from last year to see what was popular with your customers.


Determine Your Holiday Strategy

While it’s important to plan a holiday strategy for increasing sales, it’s also important to understand your internal strategy around the holidays.


Staffing

How will you handle staffing during the holidays? It’s important to consider the potential need for additional staff if you have a brick-and-mortar business. You will also want to consider that people may want to take time off to prepare for holidays and may even experience seasonal sickness.


Parties & Events

Do you plan on having an office party or staff event before the end of the year? If you do, it’s important to start looking at the calendar now. Not only do calendars get busy, but event spaces start to book out. So if you want the first choice of a date, time, or location for an event, it’s important to start thinking now about what you want and make reservations.


Bonuses & Gifts

Many business owners give bonuses and gifts at the end of the year. It’s important to start considering your budget and profitability numbers now, so you’re prepared for this when the conversation comes around. You can start by considering whether you’ll give out bonuses. You will also want to consider if you will send gifts to your top customers.


Finally, consider if you plan to send out special thank you notes or holiday cards. By starting now, you can start to make plans, assess budgets, and order items early. By planning ahead, you can save money because you won’t have to pay for rush deliveries or deal with scheduling conflicts as everyone gets busier.


Think About Your Cash Flow

Cash flow usually looks very different in Q4 and can cause challenges for some businesses, so it’s important to think about these challenges before they happen. You can start by reviewing your cash flow from Q4 of the prior year and see what you notice.


For example, did you find yourself paying out more because of increased labor hours, as well as an increase in inventory, bonuses, and gifts? In addition, some businesses have high accounts receivable but don’t get paid until the beginning of Q1. Make sure you are aware of potential cash flow problems and plan for those before they become a problem.


Talk with Your Accountant

If your tax year ends on December 31, it’s important to schedule a meeting with your accountant before the end of the year. You can discuss your tax strategy now and decide if it makes sense to invest in inventory or equipment before the end of the year to both take advantage of year-end sales and potentially reduce your tax liability in the upcoming year.


Finally, if you plan to invest in new or upgraded capital assets for your business in Q4, ask your accountant about the Section 179 tax deduction. This portion of the U.S. tax code lets companies deduct the full or partial cost of eligible assets, such as furniture, fixtures, equipment, and vehicles used for business purposes, in the year they are purchased or financed.


Start Planning for Q1 2024 Now

Because Q4 is personally and professionally busy, it’s important to start planning for Q1 now. Think about your goals for Q1. Assess what went well this year and what you want to improve next year. If you do, you’ll be well-prepared after the holidays, and you won’t have to scramble to make changes in the new year.


The Bottom Line

It’s never too early to prepare for Q4. By planning now, you’ll be prepared to make it a profitable season that’s stress-free for you, your employees, and your customers.

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