Surviving Christmas

FOR many small businesses, 'tis the season to be jolly busy. Retailers can expect foot traffic to double and sales figures to follow suit, as shoppers plunder stores.

But for the predominantly white-collar small businesses, the festive season can be a touch dull, bordering on lifeless.

Clients are busy, in-boxes dry up, new projects are put off until the new year and the phones stop ringing for a few weeks.

It is usually a perfect time to shut up shop and send the loyal troops on a much-needed break.

But the head of Commonwealth Bank's local business banking team Michael Blomfield warns that a loss of momentum can seriously hurt a small business's bottom line.

The warning comes as part of his team's release of a 10-point plan for small businesses to survive the Christmas-New Year period.

"There are some business that shut down over Christmas and they've decided that it is the best thing to do. That's okay," he said.

"But there is a loss of productivity in the process of shutting down as you're not taking on new work. It takes a couple of weeks to slow down and a couple of weeks to build up again, and there aren't many businesses that can go six weeks in low volume and still have a great financial year.

"We are not about being the Grinch that stole Christmas, but people don't sit down and do the maths and get caught out."

Mr Blomfield suggests small businesses facing a slow festive season take stock of their financial situation, conduct a detailed analysis of cash flow, and use the time to plan ahead.

The team also encourages small business owners to take a counter-cyclical view of the slowdown and provide a service that other businesses are not providing over the period.

"You could say, 'Well if nobody is doing much marketing at this time of the year, maybe I should be the one to do it'," he said.

"It could be the perfect time to grab the client list and start ringing. Even if people don't answer the phone, at least you are trying to do something useful for your business."

On the flip side, retailers should also be taking stock and preparing for the onslaught, or risk being caught out with supply issues.

The CBA team suggest retailers are stocked up well in advance of Christmas, lines of credit are locked in place as an emergency and suppliers are kept in the loop.

"Really good planning is important. They need to have made some decisions about their increase in turnover, they need to think about what that means for the margins, does it mean they might be able to drop their margins, sell more and make more money," Mr Blomfield said.

"Also make sure you are keeping your suppliers in the loop because the worst thing in the world is running out of stock. Are they briefed on your increase in turnover expectations and will they be there to support you?"

Other pertinent issues are the need for extra vigilance about shoplifting, easy access to extra staff, and collecting outstanding debts before the holiday season to ensure cash flow is high.