Things to consider this festive season as a small business owner
Holiday bonuses have long been used to express gratitude to employees. While there are numerous ways to express gratitude, financial bonuses are the most popular. In reality, if a company has previously offered financial benefits, employees may be expecting and banking on a Christmas bonus to cover holiday spending or other bills.
However, some small businesses that have previously handed out bonuses may find it impossible to do so due to rising prices, higher interest rates, and decreased profit margins.
This Year's Holiday Bonuses
What kind of Christmas bonuses will companies offer in 2022? The answer is likely to have less to do with employers' generosity and admiration of their employees and more to do with the size, bottom line, and operational reality of a company. In a survey performed by Business Know-How two years ago, 41.6% of respondents said they were giving a holiday bonus. Some of those who responded added remarks such, "If I can afford it." However, in 2022, inflation, labor shortages, and concerns about a recession could have an impact on incentive payments. Some companies may go to great lengths to provide a Christmas or year-end bonus as an incentive to keep personnel. In September 2022, Lowe's gave $55 million in bonus cash to hourly employees to help them cope with inflation. Although September is not the holiday season, it is close by and puts pressure on small and local businesses to show appreciation for their staff. As a result of inflation and rising labor costs, many small and local businesses may not be able to afford bonuses this year. Instead, they may only have enough money to scrape by with. The cost of labor alone has increased from last year by 5.18 to 7.6 percent this year.
What is the typical holiday bonus?
If you enquire about typical bonus payments from 25 different small businesses, you'll probably get 25 different responses. Additionally, the bonus guidelines may change from year to year. Previous small business surveys we conducted revealed some trends.
79 percent of the companies who answered said they distributed the same amount of money to all of their workers. These comments were almost evenly split between between $100 and $500. Amounts as little as $20 and as high as $10,000 were mentioned by outliers. Others said that they used a percentage of each employee's income to determine bonuses. The amount most frequently indicated for a holiday bonus was one week's salary.
Other common mistakes small business owners make:
1. Failure to Hire Additional Help
You don't need someone on hand if things become insane, do you? Extra assistance is needed for the big boys, the major chains that will have swarms of people going to the store at 5 a.m. to wait. for record-breaking Black Friday sales. Let's imagine your consumer base grows by 10% around the holidays. Will you have the time and energy to assist them all? What if there are more than you anticipated? When are you going to conduct your own shopping? Hiring another person or two as seasonal workers is both worthwhile and simple, with so many young people in particular in need of a short-term job to supplement their income.
2. Keeping Their Advertising Budget Stable
Hopefully, you've witnessed consistent development since last season. In any case, you should consider boosting your advertising budget. With social media ads being so inexpensive, there's no reason not to beef it up as the holidays approach. The same is true for Google AdSense and other avenues where you can capture local searches.
3. Starting Sales Too Late
You can certainly make a sale go up three weeks before Christmas. However, when the holidays approach, consumers will have less money to spend. They are also more likely to shop at a large chain for a last-minute gift. Starting sooner, say before Black Friday, means you'll be able to attract customers when they have more time and money to spend.