For small business owners in the retail space, Christmas truly does come in July. That’s because midsummer is about the time they need to start preparing their businesses for the holiday season, which, for most people, includes Halloween, Black Friday, Christmas, Hannukah, Kwanzaa and New Year’s. This preparation takes intricate planning and often involves offering sales discounts, bundling certain products at a discount, creating promotional materials and making temporary changes to your website.    

The time between October and the end of December is critical for sales and marketing promotions. Many small businesses — especially retailers — rely on holiday sales from this period to keep their businesses running throughout the year. So how can small business retailers prepare for the holidays? It starts with taking several steps to maximize sales, all of which must be planned well in advance.  

Analyze Past Performance 

Whether you sell candles, customized clothing or home goods, if you’re a small business owner in the retail space, the first thing you should do is examine your sales during past holiday seasons. Focus on which products performed the best, which marketing strategies produced the best results, consumer buying patterns and which product packaging was the most successful. Doing this can help you zero in on the best strategies and products to offer to your customers. 

Get Your Finances in Order 

Prepare your cash flow to handle the extra costs of preparing for the holiday season. These expenses may include increased inventory, extra staff and changes to your website, and more. You may have to tap into your business savings account to cover these costs. If you don’t have enough cash to finance these costs, consider financing. Here are a few common financing options to choose from: 

1. Business loan — A lump sum of cash that you agree to pay back in fixed monthly installments at a pre-agreed upon interest rate. This type of financing typically offers the best interest rate, but the repayment terms can be quite rigid. You do, however, have the option to pay off the loan early. 

1. Business line of credit — A line of credit that you can borrow against at any time for any reason. You only pay interest on the amount that you draw. The repayment terms may require a balloon payment or full repayment of the entire amount owed at various intervals.  

1. Revenue-based financing — This is only offered by online (alternative) lenders. In this case, a lender gives you a lump sum of cash in exchange for a percentage of your future sales until the lump sum of cash plus a fee is paid back. While this is often a more expensive form of financing than a business line of credit or a business loan, it often comes with fewer requirements.  

1. Purchase order financing —This arrangement allows you to borrow money to pay your suppliers upfront for the inventory you need to meet customer orders. This type of financing typically has looser application requirements and can often be obtained more quickly than a business loan. 

Whether you’re tapping your business savings or securing financing to prepare for the holiday season, it’s important to do so early. That way, you’ll be ready to execute your holiday sales strategy quickly. 

>>More: Improve Your Cash Flow With Business Loans 

Plan Your Holiday Marketing Strategy 

Once you’ve identified which products are likely to perform best during the holiday season, begin planning discounts and product bundles that will make your customers feel like they’re getting a bargain. Some things you can offer are: 

• Exclusive sales and discounts on best-selling items. 

• Product bundles for each holiday. These bundles should be promoted as sales or limited-time offers, letting consumers know that they’ll save money by purchasing the bundle rather than buying each product individually. 

• A clear promotional strategy. Use your social media channels and consider advertising in your local community to spread the word. By planning ahead, you can be ready to launch your holiday promotions quickly.  

Optimize Your Website 

You would hate to miss out on sales because your website doesn’t show up in Google search results. Retail businesses have come to rely on online sales more heavily, especially since the COVID-19 pandemic and the rise in popularity of platforms like Amazon, which many consumers turn to for holiday shopping. While updating your website — especially if you use a professional website designer —can be costly, it’s often well worth the investment.  

Decorate your website for each holiday you want to focus on, and make sure your site emphasizes your most popular products, as well as exclusive discounts and sales.   

Planning your business website updates in advance of each holiday will ensure that you’re ready to launch without delays.  

Staff Up 

To meet the onslaught of customer demand during the holiday season, you may need to hire and train additional staff. Plan ahead by expanding your payroll and developing a training strategy. Determine how many additional employees you’ll need and what to look for when choosing them, as well as what they’re pay should be. When training new employees, make sure they are equipped to provide high-quality, consistent customer service to both new and returning customers.  

Order Inventory Before It’s Too Late 

One of the most important steps to preparing for the holiday season is getting your inventory ready so that you can meet customer demand for your best-selling products. A good first step is to order your inventory as early as possible once you’ve identified your best-selling products. If you order your inventory late in the season, you might find it to be more expensive, or you may find it’s unavailable given the supply chain challenges and tariff-related disruptions.  

Another helpful strategy is to invest in inventory management software. This type of software can assist you with managing your warehouse and automate tasks such as reordering, inventory tracking and inventory counting so you don’t have to track your stock. Automating these processes can save you time and money, especially during the busy holiday rush.  

If your current cash flow doesn’t allow you to buy all the inventory you need right away, purchase order financing may be a smart option. It can help you to get the inventory you need to meet the high demand you’ll be facing during the holidays.  

The Sooner You Start, the Better 

Planning your retail store for the holidays is kind of like planning your holiday shopping: it requires many steps and early planning. It’s important to start planning as early as mid-summer or even sooner. Start thinking now about the products and sales promotions you’re going to offer, as well as updating your website to reflect each individual holiday. Financing may be necessary to prepare, as you’ll be facing extra expenses.  

The earlier you begin, the better positioned your business will be to maximize sales and reduce last-minute stress.