Small business owners are optimistic about holiday sales this year – with the majority saying they will be the same (55%) or better (37%) than last year – according to the OPEN Holiday Growth Pulse, a survey of 1,000 small businesses with $250,000 or more in annual revenues. Retail small businesses are particularly bullish and are placing greater weight on the holiday season for their future growth. Further, 54% feel their potential for business growth in 2016 will be contingent on a successful holiday season.
The number of small businesses stating growth is the top priority for their business has grown since August (79%, up from 72%) and has risen even more among retailers (86%, up from 74%). The biggest concern that small business owners reported about growing their businesses during the holidays is balancing their holiday needs with long-range growth plans (19%). The chief concerns specifically for retailers involve maintaining appropriate inventory levels (24%) and facing pressure to discount or offer costly promotions (21%).
“Many small retailers have a positive outlook on the upcoming holiday season and see it as an opportunity for growth in 2016,” said Janey Whiteside, SVP & GM Customer Marketing and Relationship Management, American Express OPEN. “As a majority of small business owners see growth as their top priority, we are proud to support their efforts to make this holiday season a success.”
Many Employees can expect a “Stocking Stuffer” (less than 5% of annual salary) for a Bonus
Many small business owners will be rewarding employees this holiday season. Roughly half (53%) plan to host a holiday party while 42% plan to give gifts. For those planning to host a holiday party, the average amount they expect to spend is $2,100. Sixty-nine percent say this amount is similar to what they spent last year and 22% say they will spend more than last year (while only 9% plan to spend less).
When it comes to bonuses, 50% of small business owners indicate that their employees can expect something equivalent to “a small stocking stuffer” (less than 5% of annual salary), 23% expect to give a gift “too large to fit in the stocking” (5 to 15% of salary) and 22% say their employees should expect “a lump of coal” (no bonus at all). Only 5% will give staff the “gift of their dreams” (more than 15% of their salary).
Comparing the bonuses they will give this year to last year, 42 percent say they will be giving larger employee bonuses this holiday season while slightly fewer (40%) say they will not.
Holiday Hiring Plans Weak; Many Small Businesses Will Not Need Extra Staff
Despite high expectations for holiday sales, the majority (72%) of small business owners are not planning to hire additional staff for the holiday season. Across all industries, among those that do plan to hire additional staff, 60% plan to keep new hires on the payroll for only one to three months. Only 11% of small business owners plan to retain temporary holiday employees for more than six months.
More than Two Thirds Plan to Give Client Gifts; Average Budget is $5,370
A majority of small business owners also plan to show their appreciation to their clients and customers. More than two-thirds (69%) will spend money on holiday gifts for clients or customers this holiday season. Compared to last year, 67% plan to spend the same amount this year and 24% plan to spend more. On average, they will spend a total of $5,370.
Adding New Customers Will Be a Sign of Success; Social Media Will be Used Most for Marketing
Small business owners will measure success this holiday season in several ways. About half (50%) of small business owners consider adding new customers as their most important success metric, followed closely by reaching a specific sales goal (46%). Among those small business owners who will require additional funding this holiday season to meet their goals, the amount they will need equates to roughly 15% of their average monthly expenditures.
When considering the different marketing tools that small business owners can leverage this holiday season, 40% plan to use social media, 30% plan to use email blasts while only 14% will use TV and radio advertising.
American Express OPEN Small Business Holiday Growth Pulse is based on an online sample of 1,000 U.S. small business owners/managers of companies with $250,000 or more in revenues and fewer than 100 employees. The anonymous survey was conducted via the Internet by Ebiquity October 7-14, 2015. The poll has a margin of error of +/- 3.1% at the 95% level of confidence.
About American Express OPEN
American Express OPEN is the leading payment card issuer for small businesses in the United States and supports business owners and entrepreneurs with products and services to help them run and grow their businesses. This includes business charge and credit cards that deliver purchasing power, flexibility, rewards, savings on business services from an expanded lineup of partners and online tools and services designed to help improve profitability. Learn more at www.OPEN.com and connect with us at openforum.com and twitter.com/openforum.
About American Express
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, foursquare.com/americanexpress, linkedin.com/company/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.
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About Ebiquity, Plc.
Ebiquity are independent marketing performance specialists. Ebiquity enables brands across the world to make better informed decisions to improve their brand and business performance across integrated communications channels. Learn more at ebiquity.com.