Holidays Create Additional Stress for Entrepreneurs
Many people encounter additional stress when it comes to the holidays. Exchanging gifts, traveling, and dealing with family and friends can increase the pressure people feel during this time of year. For those owning their own businesses, the holidays have their own set of stressors.
For most retailers, the holidays determine how successful they are for the entire year. It is not unusual for merchants to count on the holiday sales season for half or more of their revenue. Compared to last year, there are five fewer shopping days between Thanksgiving and Christmas and an early Hanukkah, both contributing to retailers’ holiday stress in 2013.
A recent study showed that 85% of the small retailers surveyed view this year’s holiday shopping season as important as last year’s or more so. Moreover, half of the retailers expect holiday shoppers to spend less because the government shutdown earlier this fall has already led to reduced retail spending in recent months.
Entrepreneur Lee St. Marie, the owner of the hat store Studio St. Marie in Rocky River, sees the holidays in a different light. Unlike some others, her hat business is not quite as dependent on the holidays. “We are not as much of a gift business. Ours is more evenly divided between Christmas and spring.”
In another study, research on shoppers suggests that they will spend less this holiday season. More than one-third of the shoppers polled said they are being more frugal in 2013 than they were in 2012. However, retail sales in the U.S. are expected to increase by roughly 2.8% compared to last year’s holiday season.
"While we expect some sales growth in the retail market this holiday season, those polled expressed a conservative view on holiday spending," said Brian Yarbrough of Edward Jones. "This differs from our retail forecasts for the remainder of the year (2014). We anticipate solid numbers from most retailers with luxury players leading the charge."
In addition, some of the big retailers like Walmart, Best Buy and Target will open on Thanksgiving night, potentially taking business away from local smaller businesses that do not open until the next day. Competition from on-line retail sales also adds to traditional brick-and-mortar retailers’ woes.
More shoppers mean more sales…and more shoplifting. While the holidays accounts for the largest percentage of sales, the holidays mark the time when the majority of shoplifting occurs. Only employee theft accounts for more losses for retailers than shoplifting. Alcohol, women’s clothing and fashion accessories, and toys top the list of most commonly stolen goods.
Some Upside for Small Business
But there is a unique opportunity for small businesses, according to Ronald Goodstein, Marketing Professor at Georgetown University. “With consumer confidence down in 2013, people will give fewer gifts but more meaningful ones,” he said. “The competitive advantage for small businesses is the ability to provide personalized service. They can help customers pick that thoughtful, relevant gift in a way that Macy’s, Walmart or Target can’t.”
The holiday season brings a pickup in business for most restaurants, hotels, personal service establishments like salons, and business-service providers such as accountants and lawyers. It can also bring the problems of dealing with stressed employees.
Along with more people in the restaurant during the holidays, The Woods restaurant in Rocky River hosts parties in its adjacent Behind The Woods facility. General Manager, Barb Harrington notes that The Woods also does a robust catering business during this time of year. “We have a strong staff with not much turnover.” So even during the holidays, problems with staffing are not an issue.
Other small businesses may not be so lucky. Entrepreneurs must manage employees who are dealing with the strain of the holidays in their own lives. Not surprisingly, workplace violence increases during the holidays. Employees are often asking for more time off to spend with their families at the same time that a business needs them the most.
For some the holiday retail rush presents an opportunity to start a new business, to become an entrepreneur. John O’Brien Jr. and Rob Huxtable just opened an on-line lifestyle brand of clothes called BUMP. “We have items from stocking stuffers on up,” O’Brien stated. The Rocky River-based firm is marketing t-shirts, winter hats and other “comfortable clothes” for the holiday season and beyond on the company’s web site, bump-gear.com.
For entrepreneurs, the pressure of making a business successful is always on them. “It is pretty much like being a mom,” St. Marie said. “In the end, you - the owner - are responsible for everything.”
Dr. Perry Haan is Professor of Marketing and Entrepreneurship, and former Dean of the Business School at Tiffin University.