Lending Library

Editor’s note: This article was originally published in 2020 with updates in December 2022 by Rachel Mennies Goodman and Lendio’s editorial team.

Economies are cyclical. Even the most fine-tuned cycle can have problems shifting into the next gear every now and again. Running a business that can weather just about any economic storm, or as we like to call them, "recession-resistant" businesses, is an exciting prospect.

So where would you find one of those? In our updated list of recession-resistant businesses, each harboring the possibility of financial rewards even when an economy dips into a not-so-rewarding time.

Discount retail

Discount retail is the only industry to appear twice on the list of the top 10 S&P 500 stock performances from 2008, a.k.a., the most recent, official recession in memory. During the 2008 recession, Walmart’s stock grew 20% and Dollar General’s increased 60%. It’s not just stock prices either—in 2008, Dollar General’s sales increased 9%. 

Small businesses can see this bump, too. During any economic downturn, convenience stores and local shops may displace grocery stores and bigger retailers by providing lower prices — and convenience. 

Delivery services

Any time that goods are bought and used, they need to get from Point A to Point B. That’s why FedEx’s and UPS’s domestic operations continue operating during a slowdown. There is, of course, a catch: the broader “shipping and logistics” industry was shown to be susceptible to slowdowns when the Covid pandemic disrupted international supply chains. Still, that same period also highlighted the value of local point-to-point delivery as Door Dash, Uber Eats, GrubHub and the like experienced a spike in new customer acquisition in early 2020.

Groceries and specialty foods.

Remember Maslow’s hierarchy of needs? At the bottom level is food. We all need to eat. And if households pull back on restaurant fare during economic challenges, that often means a boost in the sale of groceries for at-home cooking. More simply put, when economies go south, sales of basic staples increase.

Does that mean luxury food items take a hit? A quick look at 2008 indicates no. “We’re seeing an increase in items like pate and robust cheeses, blue cheeses, washed-rind cheeses,” said Whole Foods specialty coordinator Frank Schuck noted in 2008.  “With these items, a little goes a long way.”

Household essentials

Think back to the toilet-paper rush of March 2020. Whenever there’s a blip in the economy, household essentials hold their own. Falling under the same umbrella as grocery staples, certain household and hygiene essentials are inevitably the last things cut from household budgets or business budgets. This is also a case in which luxury vs. housebrand may not matter so much. A shopper might buy an off-brand disinfectant spray, seeing no difference from the name brand, but splurge on the tissues that make their nose feel good.

Utilities

The demands for gas, water, and power continue during a recession. When prices for each of these necessities is high, however, growth slows. Where are we now? Gas prices have dropped to the lowest level in more than a year. If history has a say in the matter, that means consumer spending on fuel will start to climb up.

Accounting

As the saying goes, only two things in life are certain … and accountants help prepare one of those things, taxes. Accountants generally have low unemployment. During the 2008 recession, the accounting sector added thousands of jobs as unemployment neared 9.7%. 

Speaking of taxes, if your business employed workers through pandemic slowdowns in 2020 and 2021, you may be eligible for the Employee Retention Tax Credit, which can net you up to $26,500 in tax credits (and even a refund?) per employee. You can find out here if your business may be eligible for the cash.

Funeral services

Funerary workers help prepare the other “certain thing” in the aforementioned idiom. The death industry has faced numerous issues not directly related to recessions over the years, including consolidation of small businesses and longer life expectancy. But even as spending on death decreases, it doesn’t ever completely stop, so funeral homes and services tend to have a steady supply of business.

Home repair (retail and service).

During a downturn, households can’t afford to buy a new home. However, they might have enough money to repair and remodel their current home. Nasdaq.com notes, “Home Depot is poised to maintain its sales growth through difficult times and boom once the economy recovers due to the state of the housing market.” That same trend likely extends to competitors Lowe’s and local hardware stores and to businesses and contractors who do repair jobs, too. 

Auto repair (retail and service).

Usually, auto repair and auto parts stores see increased business during a recession as consumers do their best to hold onto their cars instead of buying new ones, although consumers may only invest in the most necessary repairs. Still, after a few years of supply challenges, it’s hard to predict what might happen if the economy enters a recession in 2024.

Laundry 

People continue washing their clothes during a recession. Cleaners and coin-operated laundries still face numerous challenges: consumers might wait longer between washes, and location and changing demographics can wreak havoc on a laundromat if its customer base moves out. But well-located laundromats can expect to see at least some business even during a downturn. Plus, households might opt to hold off on repairing a broken washing machine and use a laundromat instead until their financial condition improves.

Fast food and fast-casual restaurants.

Sit-down restaurants often feel the pinch of a recession as households stay in and cook more to save money. But fast food stalwarts like McDonald’s and KFC see relatively steady sales during downturns as consumers look for value and comfort. Incidentally, the 2008 recession was one of the major catalysts of the fast-casual trend. Restaurants like Chipotle, Shake Shack, and Noodles & Co. found success with slightly higher-quality ingredients and made-to-order meals, even if it was a bit more expensive than traditional fast food. At the same time, casual chains, including Applebees and Chili’s, saw a dip in sales with 2008’s more value-conscious consumers.

Alcohol

So-called “sin” industries often do well during recessions, and alcohol sales grew following the 2008 financial crisis. Interestingly, craft beer sales grew in the 2008 recession as sales of macrobrews (Budweiser and Coors) fell significantly. Why? No one is sure, although value-conscious consumers may have been treating their 6-pack in the ‘fridge as an affordable luxury and prioritizing taste (and possibly higher alcohol content) over price.

Bankruptcy lawyers

Some businesses only do well when someone else is having a terrible day. In early 2020, when the US economy was eyeing its worst situation since the Great Depression, Fortune noted that job listings for bankruptcy attorneys had tripled “since January [2020] on online job board ZipRecruiter, while postings across all industries have fallen 48%.”

Collection and repo agents.

Lawyers aren’t the only ones who have to swoop in during tough times. Collections agencies can experience increases in traffic during recessions, although it’s a double-edged sword: the 2008 downturn showed that as work for collections agents increased, profits decreased because they were collecting smaller sums and cutting their profit margins.

BTW, repo services also see a huge surge of repossessions early on in a recession, but it doesn’t last. If the economic stagnation lasts for more than a year or two, there are simply fewer cars left to repossess.

Waste disposal

The failure of garbage pickup is one of the most commonly-cited signifiers of infrastructure failure. Expect garbage disposal to be one of the last services to be cut or reduced. Barron’s notes that “80% of sales are service-based and not tied to the health of the overall economy.”

Staying ahead of the economy's fluctuations.

BTW, research from the Harvard Business Review provides crucial lessons for any business hoping to endure a possible recession—and the first lesson, perhaps the most important, is to start preparing early. There are a million reasons to wait, but they’re all outweighed by the fact that delaying efforts only dilutes your prep’s ultimate effectiveness. 

“Main Street has it right,” explains the HBR. “Even as the debate about ‘when’ continues among economic forecasters, companies should begin to prepare themselves for the next recession…as getting ahead relative to peers (even slightly) during recession gives companies an advantage that is tough to reverse when the economy is doing better.”

So whether you’re considering a pivot of your business model, an addition to your services, or simply applying for financing, like a small business loan or a business line of credit to ensure you retain a positive cash flow regardless of what the economy throws your way in 2024, taking action early is the best way to minimize the impact of an economic downturn.

_{The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. Any content provided by our bloggers or authors are of their opinion and are not intended to malign any religion, ethnic group, club, organization, company, individual or anyone or anything. The information provided in this post is not intended to constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.}

Debit cards continue to be a pillar of the modern payment ecosystem. A 2019 study by the Federal Reserve found that 31% of consumer purchases were paid for with a debit card. While they look almost indistinguishable from credit cards, debit cards function essentially like cash in practice. For consumers, they’re the best of both worlds—the simplicity of credit cards coupled with the hassle-free nature of cash.

For small businesses, though, debit cards function more like credit cards because you’ll be charged a variety of fees each time a debit card is swiped at your establishment. However, the fee systems for both types of payment are different—and in many cases, the popularity of debit cards is well worth the fees.

Debit cards vs. credit cards.

Debit cards look like credit cards, but the similarities mostly end there. As the moniker suggests, debit cards debit money out of an account, typically a checking or savings account at a bank or other financial institution. When a purchase is made, the funds are deducted directly from the buyer’s account. In this way, debit cards are similar to cash.

Credit cards, on the other hand, involve financial institutions—like banks or credit card companies—extending credit to a consumer. Purchases are made on this credit, and the consumer makes repayments to the credit card issuer.

In a sense, debit and credit cards work in opposite ways for consumers—while credit cards run up credit, debit cards debit funds out of an account. For small businesses, though, accepting payments is fairly similar for both credit and debit cards.

Why are small businesses charged debit card fees?

Both debit and credit cards require sellers to pay a range of fees every time a transaction occurs because a lot of entities are involved whenever a card is used—and all of these entities want something in return for their services.

3 main groups expect to get paid when someone uses a debit card at your business: banks, credit card companies, and debit card processors. The fees charged by these companies can be a combination of flat fees and percentages based on the purchase price.

Types of debit card fees.

The 3 types of fees usually charged on every debit card transaction are interchange fees, assessments, and processor’s markup fees. Interchange fees are charged by the bank that issued the debit card to the customer. Card companies, like Visa or Mastercard, charge the assessments. Debit card processing companies, like STAR or NYCE, charge the processor’s markup.

Several factors can alter the fee amounts, like the size of the bank that issued a debit card and the type of business you own. Whether a PIN or a signature is used when a debit card transaction occurs also impacts fees.

Mobile payment processors.

Mobile payment processors, also known as Payment Service Providers (PSPs), are increasingly becoming a very popular way for small businesses to accept debit and credit card payments. You’ve probably come across businesses that use PSPs like Square and Stripe.

“Most payment service providers use a flat rate structure for pricing,” explains review site Ecommerce Platforms. “Basically, this ensures that you pay the same amount for every transaction, no matter what the card type might be. There’s no monthly fee to worry about, and other costs beyond transaction costs are usually nonexistent too.”

PSPs have become popular because setup is usually cheaper and easier than with traditional merchant account systems. Many PSPs try to charge simple, transparent fees. However, other systems may prove to be less expensive over the long run as your business scales up.

How much are debit card fees?

Debit card fees can vary broadly depending on the debit card used, your merchant category, and whether a PIN is used during the transaction. According to data from 2018, the average interchange fee was $0.23. As a percentage of a purchase, the average interchange fee was 0.57%. These averages are for both signature and PIN transactions. Assessment fees mostly range from 0.11% to 0.13% of each debit transaction. Processor’s markup fees can range from 0.75% to 0.9% of each transaction, plus $0.13 to $0.22. Some of these companies might charge businesses annual fees along with their other fees on every transaction.

What is right for your small business?

Deciding whether or not you want to accept payments other than cash is a big step for your business—but most businesses accept multiple forms of payment, as you’ve probably noticed in your shopping experiences. Knowing the costs associated with accepting cards is very important—especially if yours is a smaller business, as the costs can impact key aspects of your business (like your pricing strategy). Generally, if you’re set up to take credit cards, you should be able to take debit cards as well.

The economy is on everyone's mind in 2024, with everything from the housing market to inflation making headlines. If this has you considering your first (or next) small business opportunity, this may also have you considering financial franchise opportunities. A financial franchise allows you to open a business with an established brand presence. Even if you aren’t a CPA or licensed bookkeeper, many franchisors provide the small business know-how you need to get started.

What is a franchise?

You might think of a franchise agreement as allowing the franchisee to open up an outpost of the main business. McDonalds, 7-Eleven, Ace Hardware, and Marriott hotels are all very common franchises. But a franchise is really just a type of license agreement between a small business owner (called a "franchisee") and a bigger company. As part of the agreement, the franchisee gains access to proprietary business knowledge, trademarks, processes, products, and branding of that bigger company or franchisor.

The franchisee gets to run a business with a recognizable brand and a track record of success. The franchisor is paid in return, usually in the form of initial startup fees and annual licensing fees, although agreements vary.

What is a financial franchise?

A financial franchise is a franchise that offers services within the financial service industry. There are franchise opportunities for entrepreneurs interested in small business financing, tax preparation, bookkeeping, and more. Some of the brand names in the financial sector you know well, including Lendio, Allstate, and H&R Block, have franchise opportunities—but there is a whole universe of options.

Categories of financial franchise.

There are financial franchise opportunities across the financial-services spectrum—and ones that customers badly need. We pay taxes, we open businesses, we need financing, we pay employees, and we know everything should be insured—all opportunities for a financial franchise to assist us. 

Key franchise sectors in the financial services industry.

1. Small business lending
2. Tax preparation services
3. Accounting, bookkeeping, and payroll
4. ATMs
5. Insurance

Financial franchise services can also be combined easily into a robust business appealing to a wide swath of customers. With a Lendio franchise, for example, you can offer financing help as well as bookkeeping services.  

1. Small business lending.

A small business lending company is one of the most profitable types of financial franchise—and it’s relatively accessible to open as an entrepreneur. These types of franchises find loans and other funding for small businesses. In many cases, you don’t need to open a physical office, and you only need around $55,000–$65,000 in liquid capital to start.

2. Tax preparation and services.

Tax preparation franchises are very common forms of financial franchises—you’ve probably seen H&R Block or Jackson Hewitt franchises in your area. Depending on the company, you do not need to be a CPA or tax professional to open a tax preparation franchise, because they put you through rigorous training. Since people and businesses will always need help with their taxes, these types of franchises remain popular.

3. Accounting, bookkeeping, and payroll.

While many CPAs, accountants, and bookkeepers open their own solopreneur business or independent small storefront, there are several franchise opportunities for these roles as well. Since accounting is often the last thing entrepreneurs know how to handle, it's logical that many will outsource this factor of operating a company. You may not need to be credentialed to open an accounting franchise, but it helps to be a licensed CPA, CFA, or another financial professional.

4. ATMs

Even in this digital age, we all need cash sometimes. You can open a franchise that installs and maintains ATMs—a great way to get into a financial franchise without a huge infusion of startup capital. This type of business can be a particularly strong fit for an entrepreneur looking for flexible hours. It’s also great if you want to be on the road more and in the office less, especially if your staff is small.

5. Insurance

Insurance is a big enough business to be considered its own field, but it is technically a part of the broader financial industry. Many insurers have franchise opportunities, like Allstate and Farmers. Oftentimes, the companies provide all the training—you don’t have to already be an insurance agent to get started. Because of the field’s product diversity, you can specialize in many forms of insurance, including life, home, auto, small business, rental, and event insurance.

Best financial franchise opportunities in 2024.

First, choosing the best franchise is about finding the right one for you within the market you intend to operate. Will you be serving mostly business clients or consumer clients? Is your market already teeming with accountants and insurance providers or are there only a few options available locally? Do you want to invest in a storefront or would you rather focus on something like small business lending, where you may not need a storefront, the initial fees are relatively low, and you can leverage your existing business network for success?

Because every situation is different, consider the following questions when deciding which franchise is best.

• Why are you interested in starting a franchise? Do you want to be hands on with the business? If so, ensure it's a franchise that you find interesting. If this is this your first and only business, you may be able to commit more time to it than if it's another business you're adding to your portfolio.
  
• How much liquid capital do you have? Most franchise opportunities disclose up front the capital you'll need to invest.
  
• What does your market look like — particularly in terms of competition? The best franchise is usually the one with the best chance to succeed within the market you intend to operate.

How do you get franchise financing?

To get financing for a franchise, you need to ensure that you qualify for both the franchisee agreement and the needed financing for such a business. There are online platforms to help you determine what financing you are eligible for.

What is the most profitable franchise to open?

Fast food franchises, like McDonalds and Dunkin’, are often the most profitable for franchisees. The UPS Store or Anytime Fitness franchises are also known for being profitable. The most important factor, however, should be your interest: think about your passions, and let that lead you to a franchise opportunity that works for you. If your passion is helping people grow or run a business, a Lendio franchise may be a good option. If you’d prefer to work with vacationers, consider hotels, t-shirt shops, or restaurants. Like kids? You may be interested in a childcare franchise or a children’s boutique. In addition to aligning with your own interests, your franchise will be more likely to turn a profit if it fits the physical location (note that some franchises, particularly in the financial services sector, may not require a physical location).

What is the cheapest franchise to invest in?

While many of the most popular franchises require a hefty amount of capital to open, there are dozens of franchise opportunities that require an investment of fewer than $15,000 to open. Some only require an initial fee of $10,000. For about the cost of a used car, you can open up a Jazzercise, Complete Wedding and Events, or Building Stars franchise, for example.

Disclaimer: The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.

In a world where gender equality is a constant topic of discussion, it's essential that we do our part to uplift and support women in business. Women entrepreneurs bring a unique perspective and innovative ideas to the table, and supporting them isn't merely a moral imperative—it's a strategic one.

There are many ways we can make a difference, from investing in women-owned businesses to mentoring aspiring female entrepreneurs. In this post, we will discuss five actionable ways you can support women entrepreneurs. So, whether you're a seasoned business owner, a budding entrepreneur, or someone looking to make a difference, read on to find out how you can contribute to this critical cause.

1. Seek out women-owned businesses online and in-person.

Perhaps the most important way to show support for women entrepreneurs is to be committed to seeking them out. “We can support them by being conscious of how we are spending our money and intentionally supporting women-owned businesses, says Wendy Muhammad, a real estate developer.

Making a conscious effort to like and share information about a women-owned business on social media is another way to show your support. Exposure is critical and explains why companies spend so much on advertising—and why they spend more on social media than other advertising mediums.

However, B. Michelle Pippin, owner of Women Who WOW, stresses that social media amplification is not as important as making a purchase. “One popular saying is, ‘Even if you can’t buy from her, hitting like or making a comment costs nothing,’ and this is true.” But the problem with that strategy, according to Pippin, is that liking or sharing an entrepreneur’s social media post isn’t putting money in anyone’s pocket. “The women entrepreneurs I work with every day aren’t ‘playing business’—this is how their families are supported financially.”

One interesting fact about women founders: there’s rampant gender disparity in funding.

So when you can, it’s important to actually buy a product or service. And if you can’t buy something yourself, Pippin recommends introducing women entrepreneurs to people who can.  

2. Make it easier to find women entrepreneurs.

Social media makes it easier to find women-owned businesses, but according to N. Damali Peterman, Esq., founder and CEO of Breakthrough ADR, this should extend beyond likes and shares by consumers. “For example, companies and influencers should highlight women-owned businesses in their networks and on their social media platforms,” she explained. “Online retailers like Amazon should have a symbol or identifying mark that indicates if a product is a woman-owned brand.” Peterman says she’s often been in a physical store trying to decide between 2 similar items and made her decision based on the “Woman-Owned” logo on the packaging.   

3. Share experiences

The sisterhood of women entrepreneurs can create a level of support that is mutually beneficial. “Meet each other on Zoom, connect via email, write content that expresses how you are experiencing the pandemic that can be shared,” recommends Deborah Sweeney, CEO of MyCorporation.

“Being a strong steward of information and your experience can be a great way to help other women and to connect.” In fact, when Sweeney writes an article or shares an experience, she often receives feedback from women. “This feedback helps me improve and learn, and others can receive takeaways that can help them.”

4. Collaborate 

Another way to show support for women entrepreneurs is to collaborate with them. Talia R. Boone, founder and CEO of Postal Petals, looks for ways to work with other women and support Black business owners to help them grow their respective businesses. “For example, on Friday on our social media platforms, Postal Petals celebrates #BlackFloristFridays.”  

However, she says it’s those collaborations with larger companies that can help change the trajectory of a small business. “Seek out opportunities to partner with and hire services of women-owned businesses,” Boone advises.

Her advice is seconded by Muhammad. “If you have a business, make women-owned companies one of your stakeholders, and make it a point to hire services providers, for example, who work for women-owned businesses,” she says.

Collaboration can also take the form of offering business discounts. “My company has a Let’s Grow Again! plan that provides startups and small businesses discounted rates for public relations and SEO services,” explains Lisa Porter of Porter PR & Marketing. The goal is to give companies a hand so they can get back on track without the added stress of wondering how they can pay for marketing. “My company got plenty of help when we started, and now it’s time to give back,” she says.

5. Provide mental support and mentorship.

Being a woman entrepreneur is exciting, but it can also be frustrating and mentally draining.  

“If you have a woman in your life who is leading a small business, you can support her by encouraging her to evolve, adapt, and expand with the changing business landscape,” advises Bri Seeley, business growth advisor and entrepreneur coach. “Encourage her to look beyond what her business has been and to begin looking at what it could be.”  

Sometimes, that’s hard for women to do when they’re struggling to stay afloat while juggling numerous other roles at home. “The best way to help women entrepreneurs is to provide mental support to lift them up when they hit challenges,” says Charlene Walters, MBA, PhD, entrepreneurship coach, business branding mentor, and author of Launch Your Inner Entrepreneur.

“Female founders will continue to hit obstacles—it's a part of the game, and the important thing for them is to be able to regroup, come up with Plan B, C, D, etc., find the silver lining and not take setbacks or failure personally.”   

If you’re in a position to mentor women entrepreneurs, you could help them learn from your mistakes and avoid unnecessary pitfalls. “The easiest way to help them is by purchasing products, but mentoring women business owners will have a more lasting effect on their success,” explains Amy Edge, who specializes in operations and project management for entrepreneurs. “If you have the resources and skills to do so, share your expertise with women who are looking to get into business.” 

Conclusion

There are a lot of ways to help women entrepreneurs, so If you’re on the sidelines, the most important thing is to get involved and do something—not just for women but for the economy in general. “If small businesses are the backbone of the economy, women entrepreneurs are the skeletal system that holds everything together,” says Peterman.   

Lendio is committed to supporting women in business by offering tailored financial solutions. Learn more about business loans for women.

New year, new plan. If 2024 is the year of "increased sales" for your business, you can jump-start your goals with these 4 simple action-items.

Action item 1: find your niche.

Creating useful, memorable products or services that offer unique solutions to customer needs is no easy task—but it’s one of the most important principles for sales growth. What sets your business apart from the others in its category? Maybe you’re the first salon for curly haired clients in your neighborhood. Perhaps you’re the only landscaping company in town willing to work through all 4 seasons. Or, you’re the one bakery in the neighborhood serving my favorite Scandinavian pastries. Whatever the niche, once you can clearly visualize the answer to this question, find creative ways to communicate it to your customer.

Utilizing social media can be a powerful way to convey your small business’s niche to your customers, new and returning alike. Partner with like-minded small business owners to spread the word, as the company Omsom—makers of “loud, proud” and utterly delicious East and Southeast Asian sauces and recipe starters—does with their “tastemaker” program. These talented chefs serve as virtual brand ambassadors for Omsom’s offerings, spreading the word about their unique products and lending them credibility through their work as restauranteurs.

Ensuring that you have a unique product or service like Omsom’s—and knowing how to describe what makes your product or service remarkable—is a critical tool to increasing sales and improving your place in the market. Ultimately, if you can’t differentiate your product or service from everyone else who offers something similar, your business will struggle.

Action item 2: Increase the upsell.

A sales professional once told me, “There are 2 ways to increase sales within your territory: find more customers, or get the customers you already have to buy more.” Once your customer is in the door—or on your e-commerce site—convincing them to combine or add items to their purchase should be a foundational part of your sales pitch to them.

What’s the best way to convince customers to buy more? Personally, I’m a sucker for the latte-upsell, but that may not work when my furnace is on the fritz, unless the repair van doubles as an espresso truck. An air-duct cleaning or annual maintenance plan that helps me prevent another emergency repair, however, might.  Free-shipping thresholds and bundled product sets with discounts, like my favorite e-commerce skincare site Glossier offers, can be a great way to attract online shoppers to add more to their carts.

In person, it’s all about the impulse buy. Next time you go through the checkout line at your favorite local market, notice the candy bars, gum, news magazines, and other miscellaneous items designed to get your attention. Successful merchants in any business are always trying to use these last-minute add-ons, once you’re already in line to pay, to “add to the invoice.”

Action item 3: bring customers back.

Although I sometimes lose track of punch cards, I use them—what’s better than a free sandwich or pastry? Even better, virtual punch cards or app-based points systems motivate me to shop at my favorite retailers, knowing that I’ll earn some free treats or cash back with my customer loyalty without overflowing my wallet.

However, the best way to reward frequent customers is with what’s called a “surprise and delight”: an unexpected free treat or discounted item to reward them for their loyalty. When my neighborhood bakery threw in an extra croissant for my spouse—for absolutely no reason— I knew I’d be back for more. Perhaps for your company, this means waiving a consultation fee after a customer signs a contract for service or throwing in a travel-size hairspray at no cost after a cut and color.

How can you entice your returning customers to become regulars? Customer service, whether online or in person, is key to building lasting relationships with your customers—and increasing sales as a result.

Action item 4: make friends with your neighbors.

Look around: you’ll find other businesses in your area that cater to the same type of customers you’re looking for. For example, a photography studio could partner with a flower shop or event venue to offer bundles to prospective newlyweds. A dog-boarding center could sell another area business’s homemade dog treats and toys. Returning to my beloved bakery, their commitment to fellow local businesses introduced me to other shops and services in the neighborhood. I even have a plant from the same shop as the one in their window, and I shop there any time I need a new one.

The beauty of building these symbiotic relationships with other local businesses: because you work in different parts of the same industry, your customer base probably overlaps. Look for opportunities to form strategic partnerships—or alliances—that are mutually beneficial. Best of all, these types of synergies are good for customers, too.

_{The views and opinions expressed in this blog are those of the authors and do not necessarily reflect the official policy or position of Lendio. Any content provided by our bloggers or authors are of their opinion and are not intended to malign any religion, ethnic group, club, organization, company, individual or anyone or anything. The information provided in this post is not intended to constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.}

You've invested years of training, built a solid book of loyal clients, and created a foolproof business plan. Now, you’re ready to start your independent beauty salon. But just like any savvy business owner, you must understand your overhead costs to run a beauty salon if you want to ensure business success.

How much money do you need to open a salon?

There's no one-size-fits-all answer to this question as the cost to start a salon can vary greatly, depending on a variety of factors. These include the size and location of the salon, the types of services offered, the quality of fixtures and equipment, and the cost of initial inventory. Nonetheless, a rough estimate for a small-to-medium sized salon might range from $60,000 to $90,000. This estimate includes leasehold improvements, furniture, and salon equipment, initial inventory, licenses and permits, initial marketing, and operating capital for the first few months. However, keep in mind that your actual costs might be higher or lower. Therefore, it's essential to conduct a thorough analysis of your specific situation and develop a detailed budget before you start.

Beauty salon costs to consider.

As you navigate through the process of opening your beauty salon, certain costs will surface that need your immediate attention. From the rental costs of your physical salon space to the ongoing expenses for utilities, supplies, and staff salaries, we'll break down each element so that you can strategically plan your budget and avoid any unexpected financial surprises.

Here are some of the most common beauty salon costs to consider.

1. Rent

Paying for a space to run your beauty salon will be one of your most significant monthly expenses. Additionally, you’ll need to consider that your space will probably undergo renovations. For example, it may need new flooring or proper plumbing. Rent ranges widely depending on the space you’re seeking. Renting a salon booth costs an average of $400 per month, but can range from $250 to $1,200. Normal salon spaces will cost you anywhere from $1,500 to $4,000 a month.

2. Salon equipment

With the right equipment, your salon should operate without a hitch. You can choose to either purchase your equipment up front or lease it. You may be able to lower equipment costs by purchasing used equipment from other beauty salon owners. However, most find leasing new equipment to be a better option.

3. Licenses and permits

Before opening your salon, do your due diligence. Each state requires different licensing and permits. If you fail to get proper licensing, you’ll potentially pay a hefty fee. At the minimum, you should have a business and cosmetology license. But if you plan on adding services such as facials or nail care, you’ll also need the respective health permits. You may also want to consider obtaining a resale permit if you plan on selling products in your salon. Licenses charge annual or bi-annual fees to renew. On average, business licenses and permits can cost anywhere from $50 to $1500 per year.

4. Supplies

When it comes to beauty, keeping up with the latest trends is a must. Having a variety of color dyes, stylizing products, and miscellaneous items in stock will allow you to accommodate last-minute client changes. Unfortunately, beauty supplies aren’t cheap—they can add up quickly and cost up to $20,000 to start.

5. Insurance

What happens if a fire breaks out? Or what if a client injures themself on your premises? In these situations, you can’t forgo renters insurance. Renters insurance will help mitigate the costs of any unexpected events, like property loss from a natural disaster or medical bills from an accident. The price of insurance depends on the number of policies and coverage you select. When thinking about how much insurance you need, consider the total value of your property and any potential lawsuits that may occur at your salon. Insurance for beauty salons costs from $500 to $2,200 annually.

6. Payroll

If you plan on having a few stylists, payroll will be a substantial expense on your operating budget. On top of paying their salaries, taxes, and benefits, the real cost of an employee is typically 1.25 times their base salaries. According to a study by JP Morgan, 62% of business owners struggle to consistently make payroll on time. So if you can’t make payroll consistently, you risk losing your best stylists. Almost half of Americans say that if they experience payroll delays twice, they’ll start looking for a new job.

7. Utilities

Electric, water, gas—running a beauty salon means plenty of utility bills. Larger salons tend to incur more expenses because of how much energy they consume. Your bills will also increase if your salon comes with extravagant lighting or televisions to keep clients entertained. Salon utility costs range from a few hundred to a couple thousand dollars.

8. Credit card processing fees

Most people use their debit or credit card to pay for services, which can eat up a sizable portion of your profits. Each time a client decides to pay with their credit card, you’re responsible for paying processing and transaction fees. Payment processing fees alone can cost you anywhere from 1.5% to 3.5% per transaction. For example, if you charge $50 for a haircut and your credit card processor charges you 2.7%, you’ll pay $1.35 in processing fees. While this may not seem like a lot of money initially, over time, it does add up.

9. Marketing

As a salon owner, it’s up to you to bring in new clients. Even if you have loyal customers, you’ll need more than word of mouth to make people come through the door. That’s why creating marketing campaigns is an effective way to pick up new customers. However, marketing your business frequently can be expensive. Although social media and email marketing can generate leads at minimal cost, Facebook ad campaigns can set you back a few hundred dollars.

10. Salon software

In today's digital age, implementing salon software can streamline your administrative tasks and enhance the overall customer experience. This software aids in appointment scheduling, inventory management, payroll, and even marketing efforts. Many platforms also offer features like online booking and automated reminders, contributing to client convenience and retention. Although the cost of salon software varies depending on the features and number of users, it's seen as a valuable investment for efficient salon management. Expect to pay anywhere from $25 to $50 a month per software, with premium features coming at an additional cost.

12. Staff salaries

Payroll is more than just the basic salaries you pay your staff. It involves managing commissions, bonuses, and possible overtime. Salon employees might be paid an hourly wage, a fixed salary, or commission-based earnings, depending on their job role and responsibilities. Hair stylists, for instance, can earn between $20,000 to $50,000 a year on average, while salon managers may earn an average salary in the range of $30,000 to $70,000. To attract and retain talented staff, you might also need to factor in the costs of additional benefits such as health insurance, paid vacation, and professional development opportunities. These added expenses should be carefully considered when calculating your overall payroll costs. Remember that a well-compensated, satisfied team can be one of the most valuable assets to your salon business.

13. Training and continued education

Continuous learning is essential in the beauty industry to stay updated with the latest styles, trends, and techniques. As a salon owner, it's your responsibility to ensure that your stylists are well-versed in the latest methodologies and possess advanced skills. This might mean investing in masterclasses, seminars, certification programs, or online courses for your employees. You may also need to participate in business management or customer service courses to enhance your managerial skills. The cost of training and education varies widely, so it's important to include this in your budget planning.

How to finance a salon.

Starting a salon involves several upfront costs which may require considerable investment. While personal savings and loans from family and friends can serve as a financial base, there are various other financing options available that can help you fund your salon business.

1. Business loans

Many banks and financial institutions offer business loans designed to help entrepreneurs start or expand their business. These loans often come with reasonable interest rates and repayment terms, but be prepared to present a solid business plan to demonstrate your salon's potential profitability.

2. Small Business Administration (SBA) loans

The SBA provides loans to small businesses that may not qualify for traditional bank loans. The SBA guarantees a portion of the loan, reducing the risk for lenders and making it easier for businesses to secure financing.

3. Equipment financing

This involves getting a loan specifically for purchasing salon equipment. The equipment serves as collateral for the loan, which can make it easier to qualify even if you don't have an extensive credit history.

4. Personal loans

If you have a strong personal credit score, you may consider securing a personal loan to finance your salon. However, keep in mind that a personal loan ties your personal finances to your business, so ensure you have a solid repayment plan in place.

5. Investors

Securing investment from venture capitalists or angel investors is another viable option. This option typically involves selling a portion of your business equity in exchange for capital.

6. Crowdfunding

Platforms such as Kickstarter and GoFundMe allow you to raise small amounts of money from a large number of people, usually in exchange for some kind of reward. This can be a creative way to raise funds, particularly if you can create compelling rewards related to your salon business.

Remember, every financing option comes with its own set of advantages and disadvantages. It's crucial to thoroughly research each option, and consider seeking advice from a financial advisor or experienced mentor to determine the best course of action for your salon business.

Financial challenges for salon owners.

The financial journey of starting and operating a salon can be complex, filled with various costs and financial decisions at every turn. From initial setup expenses to ongoing operational costs, it's essential to have a clear understanding of where your money is going and how you can manage your finances effectively. Additionally, exploring various financing options can provide the necessary funds to kickstart or grow your salon business. While the financial challenges can be significant, with careful planning, budgeting, and a keen eye on industry trends, your salon business can thrive and grow. As a salon owner, your commitment to financial health is as important as your commitment to beauty and style.

Are you a skilled mechanic looking to open your own auto repair shop? Or, maybe you're passionate about cars and interested in starting a business in the automotive industry. Whatever your motivation may be, opening an auto repair shop can be both rewarding and challenging.

To help you get started on the right foot, we've put together a comprehensive guide on how to start an auto repair shop. From creating a business plan to hiring mechanics and building your brand, we'll cover all the essential steps you need to take to make your dream of owning an auto repair shop a reality.

1. Choose the type of mechanic shop to open.

Before you delve further into the process, it's imperative to decide on the type of auto repair shop you wish to open. This choice should reflect your personal skills, interests, and the market demand in your area. You could opt for a general mechanic shop that caters to a wide range of vehicle issues or specialize in certain services like engine repair, bodywork, or oil changes. Alternatively, you may want to focus on a specific type of vehicle, such as luxury cars, trucks, or electric vehicles.

Consider the competition in your area and identify any gaps in the market that your shop could fill. For instance, if there aren't many shops offering specialized services for hybrid or electric cars, you might consider tapping into this niche market. Research potential customer needs, review competitor offerings, and then decide on the type of services your shop will provide. This decision will play a key role when you secure financing for your business and determine what equipment you'll need to purchase.

2. Create a business plan.

Like any other business, starting an auto repair shop requires careful planning. A well-structured and detailed business plan will serve as the roadmap for your business and help you make informed decisions along the way. Include the following items in your auto repair shop business plan.

• Target market - Clearly define your target market and provide detailed information about their demographics, needs, and preferences.
• Competition - Analyze your competitors and highlight their strengths and weaknesses. Identify your unique selling points and how you differentiate yourself from the competition.
• Services offered - Describe the range of services you offer and explain how they address the needs of your target market. Highlight any unique features or benefits of your services.
• Marketing strategies - Outline your marketing strategies—including online and offline tactics—to reach and attract your target market. Include details on advertising, social media, content marketing, and any other promotional activities.
• Financial projections - Provide detailed financial projections, including revenue forecasts, expense estimates, and projected profitability. Include any assumptions or factors that may impact your financial projections.
• Location - Choosing a location for your auto repair shop is a crucial step in your business plan. Consider factors like accessibility, visibility, competition in the area, and the proximity to your target market. If possible, choose a location on a heavily trafficked road to increase visibility and attract more customers. The premises should be large enough to accommodate multiple vehicles at a time, have a comfortable waiting area for customers, and space for storage. Ensure the location complies with zoning laws for auto repair businesses. Check the local city or county government's website or office for more information.

If you're not sure where to start with creating a business plan, there are plenty of resources available online to guide you through the process. Additionally, you can seek professional help from business consultants or attend workshops and seminars to gain a better understanding of creating a business plan.

3. Plan for upfront costs.

Starting an auto repair shop comes with significant upfront costs. These costs can be broadly categorized into startup costs, ongoing expenses, and unexpected costs. Understanding these expenses is crucial as it will influence your budgeting decisions, your pricing strategy, and the amount of financing you need to secure.

• Startup costs - These are the one-time costs associated with setting up your auto repair shop. They include the cost of acquiring or leasing a business premises, purchasing necessary equipment and tools, construction or modification costs to make your premises suitable for auto repair work, and initial inventory of parts and supplies. Additionally, you need to factor in costs for business registration, permits, and licenses.
• Ongoing expenses - These are the recurring costs of running your auto repair shop. They include rent or mortgage payments, utilities, salaries of employees, cost of auto parts and supplies, marketing and advertising, insurance, and maintenance costs.
• Unexpected costs - It's crucial to have a buffer for unforeseen expenses. Equipment may break down, there might be unanticipated repair works, or you may face slow business periods. Having a contingency fund can help cover these unexpected costs and keep your business running smoothly.

Some common costs for starting a mechanic shop include:

• Premises - The cost of premises for your auto repair shop can vary widely depending on location and if you decide to purchase, lease, or rent your property. If you choose to rent or lease a property, you can expect to pay between $1,500 and $15,000 per month, depending on the location and size of the property.
• Equipment - The cost of equipment can vary greatly depending on the services you offer. Basic equipment like car lifts, air compressors, wheel balancers, and diagnostic machines can cost between $5,000 to $10,000 each.
• Business registration, permits, and licenses - The fees for business registration, permits, and licenses can range from a few hundred to a few thousand dollars, depending on your location and the specific requirements of your city or state.
• Insurance - The cost of business insurance can range from $1,000 to $3,000 per year, depending on factors such as the size of your business, number of employees, and risk factors.

Keep in mind that these are average costs and actual costs may vary. It's important to do your own research and get quotes based on your specific needs and circumstances.

4. Choose a business structure.

Before officially starting your auto repair shop, you'll need to decide on the business structure that best suits your needs.

Sole proprietorship

This is the simplest and most common form of business ownership. You are the sole owner, responsible for all profits and losses, and personally liable for all debts and legal obligations.

• Advantages - Simplicity, full control, and direct profit.
• Disadvantages - Unlimited personal liability, difficult to raise capital.

Partnership

A partnership is an arrangement in which two or more people own and run a business together.

• Advantages - Shared responsibility, shared profits, potential for diverse skill sets.
• Disadvantages - Joint liability and risk of conflicts among partners.

Corporation

A corporation is a separate legal entity from its owners. It offers limited liability protection to its shareholders, meaning they are not personally liable for the company's debts and obligations.

• Advantages - Limited liability, ability to raise capital through selling stocks, perpetual existence.
• Disadvantages - Complex setup and management, double taxation.

LLC (Limited Liability Company)

An LLC combines the legal protection of a corporation with the flexibility and tax benefits of a partnership. It offers limited liability protection to its owners, known as members.

• Advantages - Limited liability, flexible management structure, pass-through taxation.
• Disadvantages - More paperwork, potential for self-employment taxes.

5. Register your business.

Registering your auto repair business is a crucial step in making your business official, compliant, and legally recognized. The process may differ slightly depending on the business structure you've chosen and the specific regulations of your state.

• Business name - Start by deciding on a name for your auto repair shop. Make sure the name is unique, easy to remember, and resonates with your target market. Check with your state's business registry to ensure the name is not already in use. You may also want to check if the domain name is available if you plan to create a website for your business. Once you've chosen a name, you can register it with your local government or state authorities.
• Employer Identification Number (EIN) - Next, you will need to apply for an Employer Identification Number (EIN) from the IRS. This is a unique nine-digit number that identifies your business for federal tax purposes. You can apply for an EIN online for free on the IRS website.
• State tax ID - In addition to the EIN, you may also need to apply for a state tax ID number, which is used to identify your business for state tax purposes. The process to apply for a state tax ID number varies by state.
• DBA (Doing Business As) - If you plan to operate your business under a different name than the one you registered, you will need to file a DBA (Doing Business As) or assumed name with your state or county. This allows the public to know who is doing business under a particular name.

Remember, it's important to consult with a business attorney or a professional business formation service to ensure you are meeting all legal requirements in your area. Not properly registering your business could lead to fines and legal issues down the line.

6. Secure financing.

Starting an auto repair shop requires a significant amount of capital. From renting or buying a space to purchasing equipment and inventory, you'll need enough funds to cover all the initial expenses. This is where securing financing comes into play.

• Traditional bank loans - A common option for funding your new business. These loans are provided by banks and typically require collateral and a good credit history.
• SBA loans - Small Business Administration loans that are guaranteed by the government. They offer favorable terms and lower interest rates but have stricter eligibility requirements.
• Equipment financing - This type of loan specifically covers the purchase of equipment for your business. The equipment itself serves as collateral for the loan.
• Business credit cards - A revolving line of credit that allows you to make purchases and access funds for your business. It's important to manage credit card usage responsibly to avoid high-interest rates and fees.

If you're not sure which option is right for you, Lendio can help. As the nation's largest small business loan marketplace, Lendio connects entrepreneurs with lenders and provides access to various loan options, including SBA loans, business lines of credit, and equipment financing. Learn more about auto repair business loans.

7. Acquire necessary permits and licenses.

Before opening your auto repair shop, you'll need to obtain the necessary permits and licenses. The requirements may vary depending on your location, so it's essential to research the local regulations and acquire all the necessary documents.

Some common permits and licenses for auto repair shops include:

• Business license - This is a general requirement for all businesses. It allows you to legally operate your business within a specific location.
• Sales tax permit - If you plan on selling products or parts, you'll need to obtain a sales tax permit from your state government.
• Environmental permits - These are required if your auto repair shop will be generating hazardous waste, such as oil and coolant.
• Occupational licenses - These are required for any technicians or mechanics working at your auto repair shop. The requirements may vary from state to state.

• Occupancy permit - This permit certifies that the building or property you're using for your auto repair shop meets the local building and fire codes. It's crucial to ensure the safety of your employees and customers.
• ASE certifications - The National Institute for Automotive Service Excellence (ASE) offers certifications for auto mechanics. While not always legally required, obtaining ASE certifications can greatly enhance your credibility and customer trust. These certifications demonstrate your knowledge and competency in different aspects of automotive repair and service. Consider encouraging your mechanics to get certified or hire those who already have ASE certifications.

Make sure to stay up-to-date on all permit and license renewals to avoid any unnecessary interruptions to your business operations. It's a good idea to consult with a business attorney or your local small business development center to ensure you're covering all your legal bases.

For a more comprehensive list of permits and licenses needed for an auto repair shop, check with your local government or consult with a business attorney.

8. Set up bookkeeping and a business bank account.

Proper bookkeeping is crucial for any business, and an auto repair shop is no exception. Keeping track of your income and expenses will help you make informed decisions and manage cash flow effectively. It's also essential to have a separate bank account for your business transactions to maintain accurate records.

You can choose to do bookkeeping yourself or hire a professional accountant. However, it's recommended to have a basic understanding of bookkeeping to ensure the financial success of your business.

9. Get business insurance.

As with any business, it's important to protect your auto repair shop from potential risks and liabilities. This is where insurance comes into play. Some key types of insurance that an auto repair shop should consider are:

• General liability insurance - Protects against property damage, bodily injury, and advertising injury claims.
• Property insurance - Covers damages to your business property due to theft, fire, or other disasters.
• Business interruption insurance - Provides financial support in case your shop is unable to operate due to a covered event.
• Workers' compensation insurance - Covers employees for work-related injuries or illnesses.
• Garagekeepers liability insurance - This type of insurance is particularly important for auto repair shops. It covers damages to a customer's vehicle while it's in your care, such as during a repair or maintenance service.

It's important to research different insurance options and consult with an insurance agent to determine the best coverage for your auto repair shop.

10. Hire mechanics.

Having a skilled and reliable team of mechanics is crucial for the success of your auto repair shop. When hiring mechanics, it's important to consider their experience, skills, and qualifications. Additionally, conducting background checks and calling references can help you make informed hiring decisions.

You should also have clear job descriptions and expectations for your mechanics, as well as provide ongoing training to keep their skills up-to-date.

11. Build your brand.

As with any business, building a strong brand is essential for attracting customers and standing out in the market. Some key aspects of building your auto repair shop's brand include:

• Creating a professional logo and visual identity - This will help customers recognize and remember your business.
• Establishing an online presence - In today's digital world, having a website and social media presence is crucial for promoting your auto repair shop and reaching potential customers.
• Offering exceptional customer service - Satisfied customers can be the best form of advertising for your business. Provide quality services and prioritize customer satisfaction to build a positive reputation.

Starting an auto repair shop requires careful planning and consideration of various factors. By creating a detailed business plan, choosing the right business structure, securing financing, obtaining necessary permits and licenses, managing bookkeeping and insurance, hiring skilled mechanics, and building your brand, you can set yourself up for success in this competitive industry.

Lendio is here to help you secure the funding you need to turn your dream of owning an auto repair shop into a reality. Apply for a small business loan today.

The holiday season is a golden opportunity for businesses to boost their sales and strengthen customer relationships. A well-planned and executed holiday marketing campaign can make a significant impact in getting your brand noticed and maximizing your revenue potential. This guide will provide insights into effective holiday marketing strategies and ideas to help your business shine brighter this season.

Holiday marketing strategies

1. Lean into local.

According to a survey from Bankrate, 72% of shoppers aim to shop with a small business this holiday season. These shoppers understand the challenges small businesses face and are eager to support their local community. Make it effortless for them to do so.

Shoppers want to feel good about their purchases, the recipients, and the places they buy from. Share your story to let customers know how much you value their patronage. Provide them with all the positive vibes they desire as they enter and exit your online or physical store.

Embrace the local spirit by taking steps to support small businesses in the community:

• Collaborate with neighboring businesses to offer special promotions.
• Whenever possible, work with local suppliers and manufacturers.
• Hire local talent for live events.
• Give back to charities and nonprofits in your community.

2. Nail your online strategy.

In today's digital era, nailing your online strategy is critical for a successful holiday marketing campaign. Customers are increasingly turning towards online shopping, and a well-executed online strategy can significantly boost your holiday sales.

Ensure your website is user-friendly and easy to navigate. Highlight your holiday deals on your homepage and consider creating specific landing pages for your holiday marketing campaigns. An efficient, attractive website design can make a big difference in customer experience and overall sales.

3. Update your holiday hours.

Keeping your customers informed about your operating hours during the holiday season is essential. Customers appreciate knowing when they can visit your store or reach out for customer service. It's crucial to update your holiday hours on both your website and your Google Business profile.

On your website, prominently display your holiday hours on the homepage and the Contact Us page. Make sure it's easily noticeable to avoid any confusion.

Updating your Google Business profile is equally important. Many customers turn to Google to find out if a business is open before they make a trip. To update your hours on Google, sign in to your Google My Business account. From there, click on the "Hours" tab, and then the pencil icon next to "Add special hours." You can add the dates and times your business will have altered hours due to the holiday season.

Remember, accurate information boosts customer trust and satisfaction, contributing to successful holiday marketing campaigns.

4. Prepare your staff.

Long waiting lines are hated by everyone and often result in customers abandoning their plans. So, how can you avoid this? One effective solution is to hire extra staff. This will ensure that your store remains well-staffed, even during peak shopping hours.

Training your staff to provide exceptional customer service and increase sales can also make a significant impact on your holiday marketing campaign's success.

5. Plan your holiday communications.

Now’s the time to overcommunicate rather than undercommunicate. Yes, your customers’ social media feeds and email inboxes will likely flood with messages—but they’d rather get up-to-date notifications on delivery expectations than silence.

Use your website, social media profiles, email program, and more to keep customers in the know:

• What deals can they expect this holiday season?
• Will there be any expected shipping delays?
• What’s the cutoff date for shipping by Christmas?
• Are there any products you anticipate will sell out quickly?
• Where can customers find your deals? Your website, Amazon, retailers?

Don’t leave it up to guesswork—give your customers all the FAQs and answers they need.

6. Brace for impact.

Anticipate demand upfront. Cash flow forecasts will help, but plan for the worst so you’re not caught off guard.

• Website: Make sure your website’s ready to handle a jump in traffic. The last thing you want is a site crash on Black Friday.
• Stock up on inventory: Don’t miss out on sales by understocking products—plan for adequate inventory.
• Hire extra help: Prioritizing online sales doesn’t mean you’ll need less help. There are still customers to serve, orders to fulfill, and sales to make—make sure you’re staffed appropriately.
• Budget for increased marketing: It takes money to make money. If you want more digital sales, plan on more digital spend. If money is tight, consider getting a business line of credit to expand your working capital.
• Upgrade your email account: Avoid unnecessary overages by estimating your email volume in advance. If your email volume (marketing emails, shipping notifications, support, etc.) is set to skyrocket this holiday season, consider upgrading your account in advance.

Promotion ideas

Strategies to boost sales and draw in holiday shoppers.

With the right strategies and creative holiday marketing ideas, your business can effectively attract holiday shoppers and significantly enhance sales, thereby making the most out of this festive season.

Offer gift cards.

Gift cards are often overlooked by small businesses. While they may seem expensive upfront at $1-$2 per card, the stats on gift cards may change your perspective. A whopping 54% of U.S. consumers buy gift cards as holiday gifts. On average, 61% of gift card recipients spend more than the card's value. So, despite the initial investment, your returns are likely to increase. If physical gift cards aren't your preference, consider offering digital ones. This is especially appealing to the younger demographic who prefer keeping gift cards on their phones.

Offer free shipping.

While it's true that not every business can implement this strategy, it remains a powerful method to attract customers. A 2023 Gartner survey found that 45% of holiday shoppers identified free shipping as one of the top drivers for a purchase decision. If it's feasible for your business to join in, it's advisable not to hesitate and seize the opportunity.

Hold a photo contest.

Humans have four fundamental needs: food, water, shelter, and the desire to see photos of themselves on the Internet. Take advantage of this by organizing a delightful holiday photo contest. Ugly sweater pictures are consistently well-received, but the theme options are limitless.

Add coupons to purchases.

During the holiday season, customers have come to expect and appreciate the presence of coupons. If you choose not to offer any, you may miss out on potential business. To reward your loyal customers and attract new ones, consider utilizing the tried-and-true method of offering a good old-fashioned coupon.

Partner with a charity.

Apart from spending money during the holidays, consumers also seek to make a meaningful impact with their purchases. When you support a worthy cause, the positive effects are felt by all.

Provide gift wrapping.

Offering a useful service at a fairly low cost is a great way to endear customers to your business. Whether you have a retail store or operate online, make it clear that you are happy to provide gift wrapping for your customers.

Use a window display.

If you have a physical store, why not borrow a tip from the good old days and create a captivating holiday window display? And if your business operates exclusively online, no worries! You can transform your website into a modern holiday window display that leaves a lasting impression.

Share the sample love.

If product samples are relevant to your business, consider giving them to potential customers during the holiday season. Additionally, try sending some samples to bloggers and product reviewers, as they can help spread the word through gift guides and articles. It's a great way to increase visibility and reach a wider audience.

Stand out from large competitors.

Ways to stand out from large competitors.

In the face of stiff competition from large corporations, small businesses can leverage their unique attributes and creative holiday marketing campaigns to stand out and secure their market share during the festive season.

Fight the fights you can win.

In the online marketplace, competition is fierce. Your local ecosystem may have a few direct and indirect competitors, but in the world of e-commerce, you'll be up against thousands of businesses, both big and small. To succeed during the holiday rush, focus on the battles you can win.

Don't waste your energy on pricing wars or trying to outdo big-box retailers like Target and Wal-Mart on delivery speed. Instead, choose the battles that truly matter and where you have an advantage.

Create connections.

No matter how low the prices at Wal-Mart's floral department, chances are you don't have a personal connection with them. However, when it comes to your local flower shop, it's a different story. The owner probably knows you by name, remembers your arrangement preferences, and even remembers your special someone. When it comes to building personal relationships, your larger competitors just can't compete.

Provide exceptional customer support.

The holidays are wild for everyone—not just your small business. Offer relief from the chaos by taking your customer support to the next level.

If you’ve traditionally relied on phone support, consider expanding your service channels to include social media, chat, video, and email. And if your schedule is jam-packed, consider hiring and training specific customer support help.

Holiday campaign examples

Holiday campaign examples from successful small businesses.

Several small businesses have conducted successful holiday marketing campaigns, setting a benchmark for others. These examples demonstrate creative strategies and effective execution.

1. Death Wish Coffee: This company initiated a "Golden Ticket" campaign during the holiday season. Each order shipped in November included a golden ticket offering a chance to win prizes. This lottery-style campaign not only boosted their sales but also solidified customer loyalty by making shopping a fun and rewarding experience.
2. BarkBox: BarkBox has always been skilled at creating holiday-themed boxes, but their "Home Alone"-themed box was a big hit. The company took the popular holiday movie and turned it into a unique and festive product offering, which drove customer engagement and sales.
3. Erin Condren: Renowned for personalized and custom products, Erin Condren, a stationery company, launched a "Gifts that Give Back" campaign during the holiday season. The company pledged to donate a portion of its holiday sales to a non-profit organization, thereby connecting with customers on an emotional level and promoting social responsibility.

Successful holiday marketing requires strategic planning, creative ideas, and a deep understanding of customer needs. With the right strategies and execution, your small business can navigate the holiday rush and achieve growth. Remember, the holidays are about connecting with customers, sharing the festive spirit, and showing appreciation for their loyalty and support.