Planning for the summer. Who does that? Not most small businesses, according to research released by Xero, a cloud accounting company.
The survey, conducted by Pureprofile, found that more than 67 per cent of businesses don’t do anything to prepare for the holiday season despite being busier, and despite there being plenty of time and things they could do.
Only 18 per cent of the people surveyed said they would be using last year’s figures to estimate turnover and calculate targets, and two thirds said they wouldn’t change how they operate this summer. Here’s why that’s bad, and what you can do to fix it.
Why is this a problem?
Xero Australia’s Chris Ridd says some employers aren’t using the technology available to them to save time and plan ahead. “Less than a fifth are even using last year’s figures to estimate this year's turnover,” he says. When facing the summer rush, business owners usually put in more hours rather than hire new people. The study also found that a quarter of business owners do their finances and business admin over the summer, as well. This is a problem, because as The Australian Institute found, increasing the number of hours a person works increases job stress, but the increased hours don’t increase productivity.
Less than a fifth are even using last year’s figures to estimate this year's turnover.
Fix your tech
One easy fix is to make sure you’re actually using the technology available to you. Xero’s research shows that one fifth of businesses aren’t using mobile devices or any form of software, and roughly the same number are still using paper-based accounting systems.
Fix everything else
Suncorp Bank says to start, look at historical sales data and figure out what the demand is for your product or service, and adjust your inventory with that in mind. Tim Wood, the cofounder of Aireys Pub says planning for the season is essential. “In winter we probably serve 40 meals a day, but during summer that can multiply to 1100 meals on a busy day.” Next, figure out if you need more staff, and begin managing your finances. Dun and Bradstreet Small Business says this should include tightening invoice terms, suppliers’ terms, and using your short-term cash wisely. Suncorp says it’s also a good idea to make sure you can handle the increased traffic your store will see – both in-store and online.
Jan is a Sydney-based writer and editor whose work has been published in a stable of titles including the National Post, The Daily Planet and Edmonton Examiner. He is currently Editor at ShortPress.