The holiday season is right around the corner. Most of the business owners we serve are thinking about closing out this year’s budget, rewarding their team’s performance, and thanking their customers. They also want the holiday season to be joyful – not stressful from financial pressures.
There is a lot of information out there on how to stay on budget with personal holiday spending, but few voices of reason on how to avoid overspending in your business at the end of the year. Whether it’s giving out bonuses that are a little too generous or funding fancy holiday parties and expensive client gifts, there’s a fine line between being thankful and being unnecessarily extravagant. We’ve compiled some tips to help you stay frugal while rewarding your employees and thanking your customers this year.
Tip 1: Stay the Course
As noted in our free e-book, 29 Ways to Improve your Business Cash Flow, “a budget is only as good as the effort put into it.” It’s tempting to stray from your plans to reward your team at the end of the year, especially if they worked extra hard in the fourth quarter. But you’ll thank yourself if you stick to the plan.
For next year, consider a quarterly bonus system to keep the rewards timelier and performance-related. A non-cash reward employee recognition system is another option. In addition to the regular feedback your team desires, these types of systems also alleviate the emotional reasons for bonuses at year end.
Tip 2: Celebrate with Meaning or Not at All
Many of the companies we work with are thinking differently about holiday celebrations. Most employee’s calendars are already maxed out in December, so they are shifting their holiday parties to January or even summer. You may also find that your team prefers smaller celebrations throughout the year, rather than one big blow out.
We know of a few companies that have actually “killed” the annual get-together and seem to have no ill effects. Several studies cited in an article in Harvard Business Review suggest annual holiday parties aren’t achieving the goal of team bonding. They also can lead to awkward situations for employees when alcohol is involved. When gaiety is manufactured to keep the boss happy, it’s time to reconsider the cost/benefit of the annual holiday party.
Tip 3: Greet on a Budget
Send greeting cards at the holidays is a common business tradition and an excellent way to show you care. It’s also one of the more cost effective ways to stay top of mind and reinforce relationships without having to spend a lot of money on gifts. Having a plan to purchase and prepare your holiday cards well in advance of the holiday season is one way to keep this effort from becoming stressful and costly. E-cards or a holiday message in your December newsletter or blog are even more cost effective ways to send your greetings.
Tip 4: Think Outside the Gift Box
Wondering whether it’s necessary to send a gift to your customers during the holiday season? We’ve seen companies spend a lot of money on special bottles of wine or elaborate food baskets. Others simply host an open house to celebrate a great year with their customers. We also like the idea of a special discount code for e-commerce business clients, it’s a great way to thank them and keep them buying your service.
Similar to rewarding your employees quarterly with a small bonus rather than a large one at year end, consider a subscription type service that sends a monthly or quarterly gift to your customers. It’s another way to stay top of mind throughout the year.
Keep It Real and On Budget
We all want to be jolly and generous this time of year with our employees and customers, and there are many ways to do that without breaking your end of year bank. Just keep your budget in mind and remember that generosity can take many forms.
Bottom Line: Meaning matters and your business will be remembered more for a kind, personal word than a fruit basket or box of nuts.
Virtual BeanCounters serves entrepreneurs with an empowering finance division so they can focus on innovation and creating value for their clients. We believe you can accomplish the business of your dreams a lot easier with a professional accountant on your team! Contact us by phone at (913) 649-1040 or click here to visit our Contact page.