The fourth quarter was the most profitable time of the year according to one-third of the small-business owners. Entrepreneurs can use the surge in profits to invest back into their businesses.
"As an early-stage brand, 100% of what we make goes back into the company," said David Manshoory, the co-founder of the personal-care brand. The business was started by Manshoory and his wife.
He said that the duo put everything they earned back into the business. He suggests looking at the most pressing issues and constantly analyzing business functions when deciding where to invest your seasonal earnings. They focus on inventory, research and development, and marketing.
Jenny Shum, general manager of Chase Ink, told Insider that the growth stage of the business is important. She said that being intentional with where and how much is reinvested is important.
She said that small business owners have had to change the way they do business. Business owners are investing heavily in technology to sustain their businesses, cut costs, and increase efficiency in order to mitigate ongoing economic pressures
According to David Manshoory, Shum, and two other experts, business owners can invest their profits from this year into the future of their company.
What's on the shelves isn't the only thing that inventory refers to. Manshoory said that it can reflect what's going to be purchased and how it's going to be sent.
He said that business owners should first ask themselves, "What are our top sellers, how long are shipments taking, and what do we need to buy in larger quantities this time of year?"
Shum said that with the cost of goods increasing recently, business owners can curb the effects of inflation by investing in inventory and committing to purchasing products at current margins.
Cynthia Franklin told Insider that it's important to keep an eye on your margins. Which products and services are making the most money for you? Franklin said that those are not the highest priced items.
The chief revenue officer at the payroll, benefits, and support platform said that some companies should boost their digital strategies after the holidays.
She said that a lot of the businesses that innovated during COVID-19 did so through the digital delivery of services. We're going to live a lot more in a digital world.
The first quarter after the holiday season is the slowest period of the year for retail companies and gives them time to plan for the future. Money can be used to improve product offerings.
Shum said that more established businesses should invest in research and development because they want to improve their product offerings and customer experience.
Franklin said that research can help founders understand their customers' needs.
Franklin told Insider that the research will allow you to create targeted marketing campaigns with messages that hit all the right notes.
Business owners should invest in marketing because it's important all year long.
She said to plant seeds now so that customers are ready to shop with you all year long.
Manshoory's marketing efforts can be changed depending on the season. The brand's messaging changed from "on-the-go beauty" to "decluttering your routine" when COVID-19 hit.
It's important to have money designated for those budgets when there is a marketing shift.
An efficient staff is important for the company's reputation. A fully staffed warehouse will ensure orders are shipped to customers quickly, and an array of back-end employees is needed so customers feel heard online, as well as a shop staff that isn't too busy.
Both Shum and Franklin agree that hiring new staff members is not the only way to improve the team.
"If you can, give them bonuses, no matter how small," Franklin said. The act of this gesture will help build goodwill.
Shum suggests business owners use credit card rewards to subsidize employee bonuses, as well as turning rewards into gift cards and other benefits.
Manshoory said that seasonal success can be used to rebuild each department in order to prepare for a more successful new year.
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