To Close Or Not To Close? The Holiday Question for Small Business OwnersFor a small business, every day of potential profit counts, but does it make sense to keep your doors open on major holidays?
With Thanksgiving and Christmas just around the corner, business owners are starting to plan their store schedules for the holiday season. While most small businesses remain closed on major holidays, staying open may provide an opportunity for new business — especially when your competition decides to take the day off. At the same time, staying open could be a big turnoff for certain consumers.
How do you determine what’s right for your small business? Answer these five questions to guide your decision.
Does it make sense for my industry?
“One of the benefits of being a business owner is that there are no rules for when you need to stay open for holidays or not,” explained Laura Handrick, human resources staff writer for Fit Small Business.
The first element to consider is if staying open on a particular holiday makes sense for your type of business, she said. Service providers who book appointments can easily schedule jobs for a different day, but if your business meets an immediate need for consumers — such as food, gasoline or emergency services — it may make more sense to stay open.
“For example,” said Handrick, “if you run a restaurant next to a water venue (beach, lake), it would be silly to close on the Fourth of July, as that day will probably see lots of revenue.”
What is my competition doing?
It’s also helpful to know what other businesses in your area will be open on a certain holiday.
“Keeping your business open means you will reap the customer sales when your competitors are closed,” Handrick explained. “You’ll be seen as a reliable brand that is ‘there’ when the customer needs you. And like the Chinese restaurant in ‘A Christmas Story,’ staying open on Christmas might work out for food-service establishments by providing hungry patrons with a place to eat when every other restaurant is closed.”
How much will it cost?
According to Nicole Reyhle, founder of Retail Minded and author of “Retail 101: The Guide to Managing and Marketing Your Retail Business,” another aspect to consider is the cost of operations and the potential for profit on the holiday in question.
“It does cost money to have your doors open and business operating, so it’s important to factor in this reality, as well,” she said. “If your expected overhead is greater than your expected return, it may be better to shut your doors for the day.”
Compare your anticipated revenue against your operational expenses. If you don’t think enough business will come in to turn a profit, stay closed and enjoy the holiday.
What will my customers think?
In addition to operational expenses, consider the opportunity cost of being closed on a major holiday, advised Handrick. “Will you lose customers permanently [or] reduce customer loyalty? Will your customers go elsewhere, or wait for you to open up again?”
Also keep in mind if your average customer would appreciate or understand the reason your business is closed. Different demographics and niche markets place greater emphasis on some holidays over others, so it’s critical you reflect the values of your primary audience.
For example, said Handrick, in some parts of the country, celebrating MLK Day is very important. Or if your clientele is very patriotic, staying open on Veterans or Memorial Day may cause resentment or damage your brand in their eyes.
How will this affect my employees?
For many employees, being asked to work on a major holiday can be a big demotivator — or even offensive. But others may enjoy working the slower holiday shift or at least are willing to come in when strapped for cash. Keep this in mind when you’re choosing whether or not to open your doors.
“To get employees to work on holidays (and not be resentful), you might consider having a holiday pay policy; perhaps time and a half or a holiday pay bonus,” suggested Handrick. And to whatever extent possible, let employees choose to work the holiday shift, rather than making them feel forced to do so.
“Whatever you do,” she continued, “your business is going to be most successful in the long run if you consider the needs of both your customers and employees. If you decide that it’s important for your employees to work on Christmas Eve, for example, consider making it fun and worth their while. Again, it’s all about you, your values, your business services and the trade-offs you make if you close on a holiday.”