Small-Business Owners Have Bright Outlook for Holiday Season

Small-business owners expect a fairly strong holiday season, and nearly 7 out of 10 are planning special promotions, according to a new survey.

The survey of close to 1,500 firms, conducted by Constant Contact, a Waltham, Mass.-based e-mail marketing firm, found that 62 percent of business owners anticipate strong sales this December — compared to 60 percent last year. Seventy-eight percent said they rely on holiday revenue as an important part of yearly earnings.

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"We are extremely optimistic," said Dan Thralow, CEO of Thralow, a Duluth, Minn. umbrella of about 20 e-commerce sites. "I expect the demand will be overwhelming," he said.

Thralow, whose sales are driven mainly by Binoculars.com, brought in $20 million in revenue in 2005. Of that, 25 percent came in the month of December.

Even companies outside traditional gift-related industries are preparing for a boost in sales. "We expect some small growth this holiday season, maybe a little better than last year," said Scott Perry, CEO of Everything Furniture, a Corona, Calif.-based online furniture retailer.

At Everything Furniture, sales are highest in January and February, but Perry explained that these are actually holiday-related sales.

"People buy a lot of electronics in December — TVs, computers, and other gifts that require furniture," Perry said. That furniture is bought in the months immediately following the holidays.
"We've done more to prepare for the holidays early on," said Perry, who spent the third quarter lining up promotions, including online gift certificates and free-gift-with-purchase incentives. The company also added new products, an email marketing schedule, a financing plan, and a gift idea section at the top of its Web site.

Perry is not alone. In order to maximize sales, 68 percent of the surveyed companies plan to run holiday promotions and 20 percent plan to hire additional staff.

Like other business owners, Perry questions the impact that high energy costs will have on consumer spending. Twenty-two percent of businesses surveyed said they were "very concerned" about the effect of rising energy costs on their businesses. Another 29 percent said they were "moderately concerned."

Thralow has other concerns. "What's really keeping me awake at night is worrying about our readiness to ship the amount of product we will need to ship," said Thralow, whose 50-employee company plans to hire temps to help with the increased workload.

"Even I'll be in there wrapping and packaging products," Thralow said.

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