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Top Ten Financial Tips for the Holiday Rush

Staying on top of your shop's finances can prevent unnecessary stress later.

Avatar image for Jason Malinak by Jason Malinak
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The Holidays are a busy time of the year for most people — parties, shopping, traveling, baking, and various errands. If you are an Etsy shop owner, you have one more responsibility to add to that list: managing the holiday rush that is associated with your business.

I hope the holiday season for your business will be stress-free, enjoyable, and successful. Here are some tips to help you manage your shop's finances successfully during the holiday rush.

10.  Remember Tax Time is Near

The Holidays approaching also means that it is almost the end of the year (including the tax year). Now is a good time to know what your taxable income or loss for your business will be for the year. Maybe you can plan on buying some last minute equipment or incur necessary business expenses that will benefit what you owe to the tax man. If you plan on using an accountant to help you with your taxes, now would be a good time to start talking to them. Accountants get very busy after the first of the year.

9.  Intelligent Short Term Debt

Too much debt can kill your business faster than you can pull out your credit card. Sometimes taking a little debt on can be a risk that has rewards. If you think you have a product that is absolutely going to be the bright spot in every shopper's eye, but you don't have enough cash to buy the materials—short term debt might be for you.  If you are already in debt, I suggest you not go in any deeper, but promote what you have for sale even harder.  Talk with someone you trust if you are unsure if you should take on the additional debt.

8.  Make Your Advertising Dollar Work Hard

This is the time of year to advertise intelligently.  Customers are ready with vast supplies of dollar bills to hand out to thousands of sellers. You need to give your shop an opportunity to stand out from the crowd. Look for promoting where you get the biggest bang for your advertising buck. Don't be afraid to ask for a "deal" when it comes to advertising on someone's website—the worst they can do is tell you is "no".

7.  Inventory Management

Increased sales can put increased demand on your inventory. It might be beneficial to make sure that you have a ready supply of products to take the place of the items you sell. Also, make sure you have adequate supplies of raw materials on hand.  Inventory problems can hamper your holiday success.

6.  Avoid Cash Flow Nightmares

No one likes being short on cash, and it seems that during the holidays, this can be an easy predicament to be in. If you are going to have a lot of cash inflows and outflows in the coming months, you might benefit from looking when that money will come in and when it will go out. The biggest problem that comes from having a cash flow nightmare is the unwanted debt that it puts you in. Avoid confusing your business cash with your personal holiday spending money.

5.  Everyone Loves a Sale

Tis the season for sales, promotions, and discounts.  Many retailers offer customers incentives to buy from their store at this time of year—this method might benefit your shop as well. You don't have to sell yourself short though—make a profit and give your customers something to be happy with. A good transaction is when both the seller and the buyer feel like they came out well.

4. Cure Your Bookkeeping Headache

If you think your record keeping is out of control now, wait until the holiday rush is upon you. Don't hate yourself come tax time—devise a system of record keeping that works for you. You should be keeping track of your sales, expenses, and inventory at a bare minimum.  If you don't feel comfortable with your method, you probably won't use it. Use paper and pencil, a spreadsheet, or keep it in your head if you are a mathematical genius.  Whatever you do—don't avoid it!

3.  Budget Wisely

Don't go into the holiday season without a financial plan.  Set some financial goals for your shop to achieve. Set some limits on your spending. Proceeding without a plan is like telling Santa you don't care what you get for Christmas—go ahead and make your list and check it twice!

2.  Plan for Time Management

Time is a precious commodity and you probably don't want to just focus on your business during the holidays. Plan ahead and realize you can't do it all. Take some time to bake holiday cookies. Go for a walk in a winter wonderland. Snuggle up next to the fire and sing a carol. Your business is important, but there are plenty of things that are a lot more important.

1.  Keep Your Sanity

No one can run a perfect business and anticipate everything that comes your way. Learn from your mistakes. If you make 1,000 sales in one day—great! If you make 1 sale in 3 months—great! The Holidays are an enjoyable time of year—don't let your success or lack of success determine the joy you experience during this time of the year.

Avatar image for Jason Malinak Words by Jason Malinak

Jason Malinak is a CPA that loves Etsy! He's been helping Etsy sellers thrive since 2007.

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