Christmas spending among small businesses

With Christmas just around the corner, the last couple of months will have been especially hectic for most businesses. Retailers of all sizes are enduring what is by far the sector's busiest period of the year, with shoppers across the country becoming full-time bargain hunters as they look to spread the festive cheer among friends and relatives.

It's the smaller businesses to whom December and its aftermath mean the most, though. It's no secret just how many firms have fallen by the wayside in recent years, especially on the high street, and the line between success and failure is at its thinnest. Christmas, however, provides a real opportunity for SMEs to get the year off to the perfect start - and going by the latest figures, most have been ready to seize it.

Small businesses shine in 2013

Data from the Office for National Statistics (ONS) highlights just how well the UK's smaller retailers managed to capitalise on the busy festive period last year. The body's 'Retail Sales, December 2013' report shows that small and medium businesses - officially defined in this study as enterprises with 0-99 employees - experienced year-on-year growth in sales (non-seasonally adjusted) of 8.1 per cent for December.

As if this figure wasn't significant enough on its own, there's more to consider. While optimism is clearly rising among consumers, the growth experienced by larger retailers - those with 100 or more employees - was a much smaller 2.5 per cent. Of course, smaller firms are still some way behind their multinational counterparts, but it's extremely encouraging to see things moving in the right direction - and the shift can be explained by a number of factors.

Do-it-yourself e-retail

Setting up a business will always take a lot of hard work, but the process is certainly easier and cheaper now than it was 25 years ago. This is in large part down to the rise of the internet and, with it, e-retail. According to the latest IMRG Capgemini e-Retail Sales Index, online sales accounted for more than a fifth of the total retail market by the end of 2013 - and the figure is only increasing.

Gone are the days when would-be retail entrepreneurs were forced to invest in bricks-and-mortar premises, install pricey payment solutions and spend all day, every day in one single location. Sites like eBay, Etsy and even Amazon give these same people the opportunity to get started quite literally overnight.
Establishing a successful business will take a lot more than simply inserting details into an online form and sending the odd product out every week once the PayPal account has been approved. Yet, the fact that it is now possible - and perhaps more importantly, free - to get the ball rolling so easily means that valuable resources (both time and money) can be dedicated to other areas.

Ongoing support

The recession, while all but a fading memory now, had a devastating impact on the British retail sector. As is so often the case, it was the smaller businesses that were hit hardest by the crisis, with independent retailers across the country left struggling to cope with waning consumer optimism.
 
Fortunately, plenty of work has gone into picking up the pieces in the downturn's aftermath. These efforts are exemplified perfectly by the introduction of Small Business Saturday.

While it might be more normal to see Black Friday and Cyber Monday images spread across the big newspapers' front pages around the end of November, it's the first Saturday of December that most small retailers will be focusing their attention on. Small Business Saturday is a self-proclaimed "grassroots, non-political, non-commercial campaign," introduced in the UK in 2013 with the goals of encouraging consumers to 'shop local' and highlighting SME success.

Despite being a new concept in this country, Small Business Saturday was a huge success in its first year. According to Deputy Prime Minister Nick Clegg, it generated around £468 million for the economy, with shoppers flocking to their local stores, eateries and service providers in search of bargains and great products. Of course, the concept is helped by the fact that it takes place just after the last big pay-day before Christmas - a time when most people are in the spending mood.

The future

Looking ahead, it appears that the future is brighter than ever for the UK's Christmas-dependent small businesses. Figures from American Express show that 16.5 million people took part in Small Business Saturday 2014, boosting the total takings by an impressive £36 million. This kind of growth is present across the whole season as well, and things are only going to get better as optimism continues to rise.

Providing retail bosses have strong foundations in place and work with the right supporting service providers, they should be able to handle the plethora of new pressures that come with trading at this hectic time of year.