- 23 December 2019
- business financing|Singapore SME|SME loans
How SMEs can prepare for the festive season
The holiday season is upon us! With celebrations to prepare and festivities to shop for, retailers in most of Southeast Asia are experiencing a major boom during this time of the year.
While it’s good for retailers to receive more orders, businesses will also need to use other strategies to fill those orders. Here are three ways how businesses can cope with the seasonal surge:
- Budget for higher manpower costs
Having to fulfil more orders may require more hands-on-deck across the entire supply chain. For instance, F&B businesses need more servers or kitchen staff during this period. Even service providers that regularly handle heavy workloads across seasons, such as distribution and logistics companies, would need more temporary staff. Your team might need to stay beyond their working hours just to fulfil the seasonal rush.
If you make preparations early on, you could reduce some of your business costs. Internally, you might be able to “trade-off” working days with some of your staff. See if some of them are willing to work extra shifts during the holiday season in exchange for paid leave in January or some other time in the year. Not everyone celebrates Christmas or Lunar New Year, and some people deliberately want to spend their holidays after the holiday rush (e.g. because travel is relatively cheaper during the off-peak season).
Whatever your strategy, do budget for higher manpower costs. Hiring a couple more extra hands to help manage the busy period could cost less than losing and missing your customers’ orders during the holiday season.
- Optimise your ecommerce platforms
Online shopping has always been popular for its convenience and of course, lack of physical queues at the stores. Diverting traffic from your physical stores can help take some load off your staff. Offering incentives such as next day shipping and referral bonus could sweeten the shopping experience.
Look into optimising your platform for a shorter loading time – Google’s 2018 research shows the bounce rate (the probability of a website visitor navigating to another site) for mobile sites increases to 90 per cent for a one-second to five-second wait.
A worse problem is errors in payment processing, such as if payments are received but orders are not registered for some reason. This discrepancy can result in complaints to consumer watchdogs, or your company being mired in accounting chaos for months.
Routinely test your website and ensure it is fully ready for what’s to come with a team in place. And make contingency plans for when the site does go down.
The questions to ask (and create answers for) include:
- How soon can you be notified if the site goes down?
- Who is accountable for it, and what’s currently being done about it?
- Are there manned phone lines if customers call?
- Make contingency plans for overall customer demand
Understandably, customers’ expectations run higher during the festive season. Compromises that would be fine under normal circumstances are simply unacceptable by year-end.
Think of the parents who have promised their children the hottest toy or game console of the year. How about that awesome dining experience they have been saving for to share with their loved ones? Standing in their way, or failing to fulfil their order, will not end well for anyone. Disappointing a customer at any time of the year is bad but ruining their Christmas can leave a much deeper emotional impact.
Protect your company’s reputation by planning ahead and this includes finances as well. In the end, being overprepared and stocking up just a little bit more than what you need may just work to your favour.
No matter how well you plan, expect disruptions during the festive season
The end-of-year situation is often chaotic for small businesses. Whether you are a retailer, supplier or distributor, you should have a range of back-up plans and fixed procedures ready no matter how well-planned you are for any unforeseeable crop ups.
Cash flow and quick financing are also critical as you may need to restock or increase staffing on very short notice. Consider an SME lending platform such as Validus Capital – with no need to pledge any assets or collateral, SMEs can apply for a business loan through a simple application process. Learn more here →