Why SMEs need to watch the costs of Christmas
The cost of Christmas for small businesses can add up to more than £20,000 according to new research from TalkTalk Business.
One thousand SME business decision makers were questioned on what their firms do for Christmas to discover how much is spent.
Festive treats including the office Christmas party, staff bonuses and the cost of closing for the holidays were the main focus of expenditure.
Some 37% of people said the Christmas party was the largest expense while 25% suggested staff bonuses accounted for the most spending.
This highlights the commitment shown by many SMEs to creating a good working culture in their businesses while also looking to ensure staff morale does not drop.
Morale plays a key role in business productivity, which can drop off around the Christmas period as workers turn their attentions away from their roles.
The key issue with managing the festive spend is the knock-on effect that can follow in the months afterwards and the report revealed that two thirds of SMEs are forced to ‘mortgage’ January and February in order to pay for the festive season.
Around 70% admitted that Christmas is the most costly time of year with shutting office the greatest financial cost to over two fifths (42%) of businesses.
Businesses could potentially face issues as a result and lose vital sales; both factors that could damage the reputation or financial standing of the firm.
If underlying financial problems are unveiled, then seeking administrative help could identify some possible solutions.
A number of business recovery options exist, while streamlining a business can result in considerable savings in the long term.
This is especially true if unnecessary costs are removed as those funds can then be ploughed into other aspects of the business.
Christmas represents a chance to find the best value for many different parts of a business so that some of the techniques implemented can then be used throughout the rest of the year.
By Phil Smith