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Coping with Christmas: tips for retailers and other businesses

8-minute read

Some of us get very excited about Christmas. Others dread it. And businesses can be equally polarised. Whichever side of the festive fence you are on, here are some tips for coping with the challenges of the holiday season.

Key take-outs
  • Christmas can be good for some businesses but a slow time for others
  • Planning ahead is important, as is keeping good records to refer back to
  • Review all aspects of your business to ensure you’re ready and optimised
  • Remember that Christmas isn’t for everyone 

Look after yourself

Christmas is the most important time of year for a quarter of Australian businesses; and it’s the busiest time of year in the economy in general. That leaves three quarters of Australian businesses potentially experiencing a downturn each Christmas, with customers and staff away on holidays, low seasonal demand for some products and services, and the general disruption and expense of party season.


According to research published in a Westpac Small Business Report, the holiday season can be a tough time from a personal perspective for small business owners, whether they are benefitting from Christmas or suffering a slowdown:


  • 58% expect to miss out on sleep due to work demands
  • 63% won’t have a chance to relax and wind down
  • 58% will miss out on spending time with family and friends


So, our first tip is to make sure you look after your own wellbeing at this time of year, as well as your business’s. Do your best to achieve a good work/life balance – and try to share the load as much as possible.

Keep on top of your cash flow

Not only will many small business owners work harder than ever over the Christmas period, but they will also struggle to pay suppliers and staff, with cash flow typically at its weakest in January and February. If this is a problem for you, you’re not alone. Of those people surveyed for the Westpac report:


  • 30% of small business owners admit to sacrificing their own salary to pay staff
  • 40% of business owners expect to receive late payments from debtors during the Christmas period
  • 30 hours a month is the average time business owners spend chasing outstanding payments


So, what are some ways that could help improve cash flow?

1. Get paid faster

  • Invoice customers promptly
  • Send invoices to the right person
  • Chase up slow payers
  • Offer multiple ways to accept payment
  • Establish or renegotiate payment terms


Westpac can help with the first four ways that may contribute to getting your payments faster. If you have a Business One Low or High Plan account you can access our complimentary Biz Invoice invoicing tool through Westpac Live Online Banking1. It lets you create an invoice template, then generate, email and manage invoices from your smartphone, tablet or PC – and send automatic payment reminders1


According to the Australian Tax Office5, e-invoicing reduces the cost of invoicing by around 70%, so it may make sound economic sense to make the move online yourself.

2. Pay your bills when they are due

We’re not suggesting you upset your suppliers, particularly as they may be doing it tough in the festive season too. But if you’re in the habit of paying them early, perhaps think about paying on time instead. And it could be worth reviewing your payment terms and renegotiating arrangements if necessary.


If you find yourself in negative cash flow territory over the festive season, you may wish to consider short-term finance options such as a business credit card2, an overdraft2 facility, or a business loan2. Talk to your business banker and accountant about the most appropriate choice for your circumstances. And check out our handy business loan finder tool.

Manage your stock and supplies

Christmas may be a time when you have to stock up to meet demand, but you don’t want to get left with excess that’s locking-up cash. This is why it’s important to keep detailed sales records this year, to help inform your purchasing strategy next year. 


When you’re considering the relative merits of fast-moving stock versus slow, remember we’re all overloaded with choice these days. Your customers may value a more selective range of products.


Ordering less but more frequently is generally good for cash flow, so take some time to check how flexible and responsive your suppliers can be. But make sure you’re not risking running out of this season’s big seller just as supplies dry up.


Alternatively, are you in the type of business that struggles to get necessary equipment and supplies during the festive season? If you are, then remember to plan ahead and check when essential suppliers may be out of action.

Shift dead stock

Do you have unsold stock lying around, with little or no demand for it? Christmas might be a great time to offer ‘bundles’, which could be a handy way to offload not-so-popular items on the back of popular ones, while providing appealing ‘added value’ present ideas.


Or, if you’ve given up hope of selling some items, this could be a good time to donate them to appropriate charities, or for use in raffle hampers.

Consider your pricing strategy

Are you in the retail business? In the rush to stock up for and manage seasonal sales, it’s worth taking time out to make sure you’re optimising the profit potential of your inventory. Again, look back at last Christmas and ask yourself:


  • What sold the most, even at a lower margin? Could that margin be increased?
  • What sold the least, though at a higher margin? How can these products be pushed? Are they in the best location?
  • Is it okay to keep some margins low for products that lure customers in? Have you chosen the right ‘loss leaders’?
  • Are some lower priced items undermining the sales of more profitable items?
  • Do all prices comfortably reflect your desired customer perception of your retail brand. Are you smart and exclusive or cheap and cheerful?


Achieving a balanced pricing policy will always be a juggling act but having sound sales records to refer to when planning will help you optimise your potential for profit.


And one other thought. If you’re offering deliveries, making them free is very attractive to customers and can often give you an edge.

Review your payment plan

If your retail or food and beverage business enjoys a seasonal income spike, do you have the right EFTPOS machine pricing plan for the time of year? 


With some Westpac EFTPOS machines2 you have the flexibility to adjust your Merchant Pricing Plan3 each calendar month with no penalty4. This means you can switch to a higher income plan for the months running up to Christmas, then adjust it back in the New Year.

Make buying from you easier

Today’s modern consumers and business customers have become used to paying the way they want to, rather than the way companies want to receive payment. So, take some time to review if you’re making it as easy and as fast as possible for people to pay you, whilst ensuring you offer the options that match your own needs.


Some payment systems may be more convenient and secure than others, while others could get the money into your account faster. It could be worthwhile checking out Westpac payment solutions2 to make sure you’re offering the right choices for your business, and to chat to your business banker about your needs.

Save for seasonal downturns

If yours is the type of business that benefits from the festive time of year, hopefully you have a successful season and it leaves you with plenty of surplus funds. So, what to do with them?


First up, it can be a good idea to have a business savings account2 alongside your business transaction account2. Through online banking2 you can quickly shift surplus cash into savings, where it might benefit from a higher interest rate. Depending on the account, it may be worth doing this even for short periods, particularly if no transfer fees are involved.


Not only does this put cash aside to help cover seasonal downturns, but it could also offer an efficient way to store the funds needed to fulfil your tax obligations come Business Activity Statement time.


If you’re prepared to lock your money away for a month, months or even years, it could be worth shopping-around for a business term deposit2 that matches your needs. Term deposits generally earn a higher rate of interest than standard savings accounts, but you must be comfortable with the possibility of general interest rates going up while yours is locked in. You’ll also need to consider the likelihood of an unforeseen need to access your cash before the ‘term’ is reached.

Be culturally sensitive and caring

The 25th of December is just another day for many Australians, so don’t expect everyone to be rejoicing as much as you are – or partying as hard. If you’re sending cards and/or gifts from your business, remember to give some thought to whether they are appropriate to each customer’s beliefs.


Many people have to work over the holiday period while the rest of us are relaxing with our families. Others may be alone at Christmas and could find this a difficult time to get through.


Whatever your situation and faith, it’s a good time to reflect on the wellbeing of others and the importance of mutual support. We wish you a happy, healthy and successful festive season!


Christmas may be your busiest time of year or your quietest. Either way, we hope we’ve helped you make the most of it.

Read more

9 ways to (quickly) move dead stock

Here’s why every business owner should make it a priority to move dead stock – and 9 clever ways to do it.

Improving your working capital cycle

What is working capital, and how does it affect cash flow? Check out these tips on how you could get your assets working harder for your business.

7 ways to help manage your stock purchases

Better stock management helps keep the working capital cycle moving, injecting cash into your business. Here are 7 ways to help manage your stock purchases. 

Things you should know

1. To be eligible for Biz Invoice you must be registered for Westpac Live Online Banking and hold a Westpac Business One Low Plan or Business One High Plan account.


2. Westpac’s products are subject to terms, conditions, fees and charges; and certain eligibility criteria may apply. Before making a decision, read the disclosure documents for your selected product or service, including the Product Disclosure Statement and T&Cs for Westpac business credit cards, business overdrafts, business loans, merchant services, business transaction accounts, business savings accounts, online banking and term deposits by clicking the above links; and consider if the product is right for you.


3. To be eligible for a Presto Smart or EFTPOS 1 Westpac Merchant Pricing Plan, you must hold and settle into a Westpac business transaction account in the same name as the merchant facility. Not available for use outside of the indirect tax zone. One terminal per Merchant Pricing Plan, per merchant and available for EFTPOS 1 and Presto Smart products only. Cancellation fees apply. 


4. Changes to merchant pricing plans are effective from the following month.




The information in this article is general in nature; does not take your objectives, financial situation or needs into account; and does not constitute financial or taxation advice. Consider its appropriateness to these factors; and we recommend you seek independent professional advice about your specific circumstances before making any decisions.