Is Black Friday 2024 Worth It for Small Businesses?

When you’re running a small business, every single penny counts. It also means you don’t have piles of money lying around to spend on big marketing campaigns, new products, etc. In fact, 9 in 10 small businesses have cash flow challenges and 1 in 12 don’t hold any spare cash at all.

Scaling your operations and offering large discounts for Black Friday can feel like a big risk when cash is tight. Not only does promoting your business and increasing your inventory cost money, but it also takes up a lot of time and effort.

So, is ramping up your operations for Black Friday worth it if you’re a small business? In this article, we’ll discuss the business case for participating in Black Friday and share expert tips on how to scale your operations with as little risk as possible.

 

The Business Case for Black Friday and Cyber Monday 2024

For most businesses, Black Friday and Cyber Monday are some of the biggest dates in the retail calendar. Black Friday, which was typically an American tradition, became popular in the UK back in 2010 when Amazon started introducing sales, and then solidified in 2013 when Asda held the first in-store Black Friday event.

Since then, Black Friday has become a hugely popular shopping event that’s been extended to Cyber Monday, the following Monday when online retailers start offering big deals and promotions.

2023 was a particularly big year for Black Friday in the UK. Total sales reached an estimated £13.3 billion, which was up 7.3% year-on-year, and half of UK adults had planned to spend during the weekend, which is around 26.9 million people. It’s not just that Brits love a bargain, but the cost of living crisis that’s encouraged people to spend more during Black Friday. Just over half of Black Friday shoppers said financial concerns meant they relied on promotions more than usual.

Despite a slight decrease in spending compared to previous years, the average shopper was still expected to spend £113, proving that the weekend remains an attractive opportunity. Cyber Weekend accounted for 25% of total sales for businesses in November 2023, further showing its continued appeal to huge numbers of customers.

The potential benefits for your business could also continue long after the weekend finishes, with 84% of consumers claiming that if they have a good experience with a brand during Black Friday, they are very likely to shop there again.

If you’re the owner of a small business, it’s important to weigh up the pros and cons of Black Friday participation. Carefully consider the financial implications of discounting your products or services and the operational demands of scaling up.

The figures don’t lie, Black Friday can potentially be very rewarding, but there’s also a lot of work to do beforehand to make sure you have the inventory and awareness to make big sales.

 

Strategies to Prepare Your Small Business For Black Friday 2024

If you’ve decided to get involved in the Black Friday sales this year and want to offer deals to new and existing customers, there are a few things you should think about to put your business in the best position possible:

1. Take your time with inventory planning

Look back at sales data from the year so far, see how much stock you sell on a normal month and what items are the most popular. According to a survey of WooCommerce ecommerce websites, 50% of business owners plan to increase their inventory before Black Friday, which makes sense considering that 46% of respondents claim up to 30% of their annual sales volume comes from this weekend alone.

The key here is to be strategic. You may not need to increase the inventory of all your products, only the most popular items and those with the biggest discounts. You may also want to start increasing stock as early as possible – over a quarter of ecommerce businesses start planning Black Friday one to three months in advance.

 

2. Perfect your pricing strategy

Black Friday is all about offering big deals to encourage people to purchase your products or services. It’s important to make sure your prices are competitive, so check your competitor’s deals to see what you’re up against.

There’s also a lot of psychology that goes into choosing the best price for a product or service. For example, ‘charm pricing’ where prices end in the number 9, can outsell rounded prices by 24%. This idea was also shown in one study where a piece of clothing was tested at $34, $39, and $44. The item sold best at $39, even though it wasn’t the cheapest price.

The lesson here is that offering customers the best deal can be important, but there are also ways to encourage a purchase even if you can’t afford to offer the biggest discounts.

 

3. Optimise your marketing channels

Black Friday isn’t just about offering discounts to your existing customers, you should also aim to reach a much wider audience of potential customers. The best way to do this is to start optimising your marketing strategy to cover multiple channels.

77% of businesses now use social media to reach customers and 76% of users have purchased something based on a social media post, so this is a good place to start with your Black Friday promotions.

Another important marketing channel is email. 64% of small businesses use emails and 87% of brands say that it’s critical to their success. Think about sending email marketing campaigns a few weeks in advance of Black Friday so your loyal customers can be the first to know about the best deals.

4. Streamline your fulfilment and logistics

With the quick surge in orders over Black Friday weekend, it’s critical that you feel confident in your fulfilment processes. Review your current processes, identify any bottlenecks that could cause issues, and make necessary adjustments well in advance of the sales.

Shipping delays and fulfilment issues are much more than a slight inconvenience to customers. 40% of respondents in a recent survey said they would be less likely to buy from a business again if they experienced delays. Also, 58% of respondents said that delays would make them leave a negative review or tell other people about their experience, which could impact your brand’s reputation.

To streamline your current operations, you may need to negotiate better shipping rates, work with new shipping carriers, or offer alternative shipping options like in-store collection or next-day delivery.

How to Finance Your Small Business During Black Friday

Having access to the money and resources needed to succeed during Black Friday can be a major roadblock for SMEs. You have the direct costs of bringing in additional inventory, but there’s also the indirect cost of taking time to post on social media, optimise your fulfilment, or write an email.

If you’re worried about how to manage these costs, we can provide merchant cash advances of up to £400,000, a form of revenue-based finance. Unlike traditional lenders, we don’t make you jump through hoops and we don’t have stipulations on what you can spend the money on.

Whether you need some support paying for inventory or want to bring on a new member of temporary staff to handle Black Friday sales, you can set your business up for success with our funding options.

At 365 finance, we can offer revenue-based funding of £10,000 to £400,000 in capital, so your business can thrive all year round. Apply for funding today without affecting your credit score. Or speak to our team to find out how we can help your business. To find out more, head to our website.