Holidays present challenges for small businesses

By Faith Allendorf, Managing Editor for Reporting

Every year around Black Friday, large companies like Amazon, Walmart and Best Buy roll out yearly deals for the holiday season, bringing in an influx of web traffic and revenue. But where do small businesses fall into the success of the holidays?

Local business owners share and discuss what it is like to operate a small business during the holiday season. For retail businesses, the holiday season brings in a significant chunk of income. According to the National Retail Federation, an average of 19% of the total amount of sales per year comes from the holidays. 

Anna Peters, co-owner of art coop, inc. in Urbana, said there are three points in the year when the coop makes most of its money. According to Peters, the holiday season is one of those points — around 40% of the business’ total funds come from that time.

“We do tend to make a larger quantity of money in a shorter period of time during the holidays,” Peters said. 

Matthis Helmick, owner of Plant Mode in Champaign, said he sees about a 25% bump in sales during the holidays. However, this increase is not as much as it is in other months such as the start of spring (March and April) and the beginning of the fall semester (August and September). 

“The holidays kind of get me going and pay some bills, and it’s usually a struggle again for two months until early spring,” Helmick said.

According to Chris Olson, the owner of Gopher Mafia Games in Urbana, the sales that come from the holidays are “surprisingly low” compared to the rest of the year — he contributes this to the type of store he runs. 

However, Olson also said because of overall business operations, maintaining and/or increasing sales becomes more difficult during the holidays.

“I’m going to be closed for at least three or four days that I normally wouldn’t be closed,” Olson said. “I’m looking for an uptick, but I’m just straight up missing days worth of sales.” 

The holidays also make it harder for Olson to have consistent and motivated employees. Around this time of year, Olson finds that employees tend to call out more, and he has to make up all of the extra work.

“It means I have to put in a lot more work to make up for (employees calling out),” Olson said. “Or, I have to accept that that work is just not going to get done and will get pushed off to later, which could affect my sales for the month — and that’s compounding with the fact that I’m already closed several days that I normally wouldn’t be.” 

Peters said the most difficult part of being a small business during the holiday season is keeping itself “at the top of mind” of people.

“Bigger companies are able to have a dedicated social media team, but we don’t — it’s just me and Hilary,” Peters said. “We have to constantly … let people know that we’re here.”

For Remington Rock, manager of The Literary in Champaign, running a small business means facing a lot of unpredictability during the holidays. 

“We run sales this time of year … but it’s so unpredictable if people will take advantage of them,” she said. “There’s also no income fallback that a chain store might have.” 

One of the more difficult things for Peters is dealing with vendors. She said that if vendors want to support small businesses, they have to be willing to treat them the same way they treat larger companies. 

“If they’re giving a huge discount to a (big) company, and in turn, that company can sell a pack of pencils for less than the price that I pay wholesale for — I just can’t compete with that,” Peters said. 

Another issue that small businesses may face this season is inflation. The inflation rate in October was 7.7%, which is the highest inflation has been since 1981, when it hit 10.1%. According to the U.S. Chamber of Commerce, 50% of small businesses say that inflation is the biggest challenge they are currently facing.

The art coop has faced inflation issues with art materials. For example, canvases are made of wood, but in 2021, the cost of wood was 17% higher than its 25-year average, and lumber still remains expensive. 

“We have to raise our prices because the price of goods is going up,” Peters said. 

Helmick said Plant Mode has felt the effects of inflation, especially in the dips where business is slower. The last three weeks of business have been “the slowest weeks” that the business has had.

“Smart business people plan for things like that and have some extra cash for rainy days, but I don’t really operate that way,” Helmick said. “I’m always working out of a situation where I owe money, and I’m just trying to keep up.”

Olson said that inflation hasn’t hurt Gopher Mafia Games to the point where it would have to go out of business, but the store has definitely felt the effects of rising prices. 

“As much as we’re doing OK, it definitely feels tighter,” Olson said. “If we were making the same sales that we are right now three years ago, I’d have my debt paid off and two months’ worth of rent paid ahead of time. But because of the price hikes, it’s more difficult now.” 

But despite the uncertainty surrounding the outcome of this holiday season, Peters said that she has seen a growing shift in consumer spending habits. She thinks customers are really starting to think about the places they are buying from.

Since the pandemic, there has been a greater emphasis on value-based shopping, as well as supporting local businesses. According to Pew Research Center, 80% of Americans say that small businesses have a positive impact on the state of the country. 

“I think that people realized over the pandemic that if you don’t support these places, they’re just not going to be there,” Peters said. “(Consumers) supporting local, queer, women or BIPOC-owned places — I think that’s where we really have an opportunity to shine.”

Store owners also recognize the importance of running a small business and that there are many elements of a good business that corporations lack.

For Rock, small businesses have a sense of personalization that big businesses do not. 

“We have a very experienced and well-read staff that genuinely wants to help you find something that you will genuinely enjoy reading or gifting,” Rock said. “We really, really care about people who come in here and support us, and we want them to have the best experience possible.”

 

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