Ready for Holidays?
By Christina Riechers
Memorial Day is Monday—it’s always observed on the last Monday in May. This day is unique among federal holidays in that it’s one of the only ones that’s occurs at the very end of the month, right when many small businesses need to balance the books and pay their bills.
Complicating matters, on federal holidays, or “bank holidays,” most financial institutions are closed in observance. A bank holiday stops normal deposits and transfers, so especially when a bank holiday falls at the end of the month, it’s important to get a jump on your financial needs and keep an eye on your cash flow so that you’re well prepared to continue with business as usual. Here are a few of our tips to prepare your business for Memorial Day and all bank holidays.
Plan ahead for spikes or dips in demand
If your town welcomes visitors for the long weekend, you may need more inventory and supplies to meet the spike in demand. In contrast, if people pack up and leave town for the holiday, you may want to reduce your usual orders to avoid spoilage and lost revenue. It can be tough to adapt and replenish necessary items last minute on holidays—both due to cash flows, and because your suppliers may be closed—so here are two smart ways to plan ahead:
- Assess the holiday visitor traffic where you live
If you’ve lived in your city or town for a long time, you’ll understand how a long weekend affects the local population—does it swell because of a special event or landmark; or does it shrink because everyone heads out of town? If you’re newer to the area, consult local community calendars or your fellow business owners for their insight, and decide how much more (or less) business to be prepared for.
- Look at your historical sales data
If your business was open for the holiday last year, your point-of-sale system should offer analytics and insights to reveal how you fared previously. On Square, our Dashboard gives sellers an in-depth look at sales trends from last year to remember what holiday traffic might look like – and even what items sold best – providing a laser-precise view into what you should order in advance to be appropriately stocked for the long weekend.
Make a plan for your bills, accounts payable, and deposits
Make note of when your payment deadlines fall, especially if they’re on Memorial Day itself or the days immediately following. You’ll need to make sure you have funds ready to pay bills on time—remember that just when bills may need to be paid earlier to meet a holiday deadline, automated deposits from your revenue will often come late!
This end-of-month convergence can be a challenging combination for small businesses who need to manage cash flow but find their banks closed for business. Tools like Square Card can be a game-changer to sellers every day, but especially on bank holidays. Square Card is a business debit card tied to your Square payment processing account that lets you spend funds as soon as you make a sale, so you have free, immediate access to your earnings, even on a bank holiday. You can use Square Card anywhere Mastercard is accepted to make payments in-person and online, helping you stay atop vital business expenses and avoid unexpected late fees.
Similar to planning for inventory, you’ll want to plan for staffing as well—which includes being up-to-date on your local overtime and holiday labor requirements. These laws vary by state and, in some cases, by county and city, so check with an attorney or accountant if you’re not sure what regulations apply to you and your business.
Be sure to budget for extra payroll costs you may incur with overtime, and then determine whether that will impact your operations. You can get creative in how you adapt to this challenge, such as modifying hours to manage costs—shortening your business hours could not only be more profitable but could also help you keep your employees happy by giving them a holiday break.
Figure out how to carve out time (and funds) to enjoy the holiday yourself!
Don’t forget to take a moment to observe the holiday weekend yourself, especially when you’re working hard. To avoid any accounting headaches when you get home—especially since it’ll be right when you need to finish your May accounting—track your personal and business expenses separately.
Whether it’s catching a movie after you close up shop for the day or taking a day or two off to get out of town, taking a small break will help you recharge for the demands of running your business.
Christina Riechers is head of Square Card. Square Card is Square’s new business debit card that provides real-time access to funds, launched in January 2019.