Despite the cost of living crisis, new research from technology platform Intuit QuickBooks reveals that small businesses (SMBs) expect to cash in from the upcoming festive season. Three quarters (75%) of small businesses in the UK predict they will generate more revenue this holiday season compared to 2021, with an estimated revenue of £460K per small business between November and January – equivalent to two-thirds of their total annual revenue on average.
This is supported by 67% of UK consumers who say they plan to spend as much around Christmas or more than they did last year, with an average budget of £671. Small businesses stand out as the go-to destination for holiday gifts as nearly half (47%) agree they offer the best customer service. On average, they plan to spend £250 at SMBs — equivalent to 37% of their total budget.
“After yet another challenging year, small businesses will be hoping for a strong festive season to boost their cash reserves. But with recruitment and supply issues, and the potential for consumers to reduce spending should inflation rise further, they need to have a plan. Those businesses looking to make the most of the holiday season will need to fully embrace digital and enhance their online offering to make the most of this opportunity.”, says Nick Williams, UK Product Director at Intuit QuickBooks.
In fact, over three-quarters (78%) of UK consumers say inflation is pushing them to shop online more, and they are also more likely to buy from small businesses that have their own websites. Despite this, only half of the small businesses surveyed in the UK (53%) currently have a business website with many using social media marketplaces or third-party e-commerce solutions instead.
However, the growing cost of living pressures could impact this positive forecast, with 8 in 10 (88%) consumers admitting they will cut spending if the economy worsens.
Besides the cost of living, the report, which surveyed 12,700 customers and businesses owners in the UK, US, and Canada, highlights other challenges faced by entrepreneurs of businesses with up to 100 employees. Among UK small businesses, 89% predict inventory or product shortfalls, and 9 in 10 (96%) are experiencing shipping or fulfillment challenges.
Although over 50% of small businesses are hiring seasonal workers to help them out with anticipated extra demand, 95% of those with current job openings are having difficulty hiring.