How Will Small Business Owners Celebrate the Holidays?

By Rieva Lesonsky

What are your small business’s plans for the holiday season? Will you be giving customers gifts, exchanging gifts with your staff or celebrating with a party at your office or store? The 2011 American Express OPEN Small Business Holiday Monitor surveyed entrepreneurs about their plans for gift-giving, celebrating and more. Here’s what they found.

About half (43 percent) of small business owners will be giving their clients or customers gifts this holiday season. The average budget for client/customer holiday gifts is $827, up substantially from $740 last year and $455 in 2009. Overall, fewer entrepreneurs than last year (53 percent in 2011 compared to 65 percent in 2010) say the economic downturn has changed their holiday gift-giving behavior when it comes to customers. Of those who said that the economy has changed their behavior, here’s what they’re doing differently:

• Giving fewer gifts – 39 percent
• Giving less expensive gifts – 39 percent
• Giving gifts without spending cash (by bartering or giving away your own products/services) – 26 percent
• Giving no gifts at all – 23 percent

Interestingly, 12 percent say their reaction to the downturn has been to increase gift-giving (I’m betting those companies really stand out in the crowd!).

This holiday season, more than one-third of small business owners will throw a party for their staff.  That percentage has declined steadily from 2009. On average, entrepreneurs will spend $1,029 on their celebration, about the same as last year. While the percentage holding parties is declining, this year more small business owners (22 percent) say their staffs will participate in volunteer activities as a group than in the past few years. And 29 percent will give year-end bonuses, up from 25 percent last year.

While the economy isn’t putting much of a damper on holiday festivities, it does seem to be affecting small businesses’ holiday marketing strategies—and particularly those of small retailers. Nearly one-quarter of small business owners overall (24 percent) and 42 percent of small retailers say they will be discounting products or services to boost demand during the holiday season. Of these, more than three in five say they will be giving even deeper discounts than they were last holiday season (the average discount is 11 percent). In addition, one-third say they plan to start holiday promotions earlier this year than last year. But despite the marketing challenges they’re facing, only one in 10 retailers and one in 20 small businesses in general say they plan to hire extra help for the holiday season.

How is the economy affecting your plans for the holidays?

Image by Flickr user Julian Lim (Creative Commons)

This entry was posted on Monday, November 21st, 2011 at 6:00 am and is filed under Small Business, small business, Workforce. You can follow any responses to this entry through the RSS 2.0 feed.


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