With shoppers running around with credit cards in their hands and people sat behind screens, mouses at the ready, you’d think Black Friday would be every retailers’ dream. It may be one of the biggest shopping events of the calendar year, but for smaller businesses, it’s just another regular day.
Often, the ‘little guys’ are barged out of the way as crowds flock to or visit the big box stores online for the ‘real’ discounts on leading high street brands. In a sense, Black Friday belongs to these larger businesses as they battle it out to win shoppers’ attention by cutting costs considerably. This year however, SMEs (small and medium-sized enterprises) are being urged to take advantage of this event which takes place this Friday (24th November), reports Orchard Accountants. The call comes after retail giants Amazon revealed that only 25% of small firms are planning on offering Black Friday deals to their customers.
Black Friday – which takes place online and on the high street – has grown dramatically over the years and has now become a four day shopping bonanza; Black Friday starts the day after Thanksgiving and concludes on Cyber Monday. Black Friday is expected to rake in £7 billion in 2017, reports the Telegraph – 20% more than 2016 – as the event stretches for almost two weeks at some retailers. Amazon’s Black Friday sales for example, kicked off on Friday, 17th November and conclude on Monday, 27th – that’s 10 days!
How Small Businesses Can Capitalise on Black Friday
While Black Friday is typically known for offering consumers large discounts on top high street brands, it can also help SMEs increase profits and reach new customers. Web-hosting service, Weebly reports that small businesses can “double their number of sales during the Black Friday weekend” through round the clock shopping. Weebly state that 50% of Black Friday sales are completed “after hours.”
CEO of Weebly, David Rusenko, said: “While many consumers see through larger brands using it (Black Friday) as a marketing gimmick, they welcome the genuine discounts and promotions that smaller businesses offer.” SMEs may not be able to propose huge discounts like the larger stores, but they have the advantage of being able to offer a personalised service. Yes, customers like low prices, but they also like to feel valued; small businesses can provide this extra support and service. QuickBooks suggest that these companies can offer a respite from the intensity of big store Black Friday mania: cookies, hot chocolate and a comfy place for shoppers to sit down and take a breather. Sometimes it’s the little extras that help engrave smaller stores on the minds of their customers.
Rusenko adds that smaller companies “can compete with the world’s largest” in the global marketplace if they take advantage of the digital tools available to them. Online efficiency is no longer restricted to those with advanced technical expertise. The CEO states that it’s “never been simpler” for SMEs to take part in the Black Friday sales; online stores and marketing campaigns can be now be ran through smartphones, for example. Mobile optimisation is also crucial for online sales as many shoppers look to bag the best deals as quickly as possible.
As Black Friday is no longer confined to just one day, the event could be damaging for the smaller companies who refuse to take part. SMEs should question whether they can afford to miss out on business if they’re overshadowed by larger companies offering irresistible discounts. One fear many small retailers have is if they reduce their prices, their overall profits will fall. However, these retailers may not realise that at a lower price the number of products sold will likely increase. The sales margin may be smaller, but they will be able to sell products which may have otherwise sat in a warehouse, been discarded or, at very best, sold off for wholesale at a considerable loss. Additionally, there will always be customers who will only consider buying a product if its value is decreased to an amount they are happy to pay for – making Black Friday a good day to get the bargain shoppers in early.
Black Friday for Accountants
Accountants and bookkeepers need to be on their toes throughout the entire calendar year as they balance a company’s books, but especially so from the end of November through to the January sales. Events like Black Friday make predicting a businesses’ profits or losses challenging. Even more so this year with households squeezing spending due to Brexit. Accountants, therefore, have to be ready for fluctuations in sales regardless of whether they are offering any discounts.
Small business accountants will likely find these periods even more testing. Often, in an SME, business owners will ask their staff to take on numerous responsibilities. An accountant, for example, could be asked to help with stock control or HR. Add unpredictable sales to the mix, and they certainly have their hands full when trying to balance books. Let’s just hope they’re writing in black ink come the end of the Black Friday sales.
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