5 Ways Small Businesses Can Prepare for the Holidays

By Jackie Zimmermann

The doorbuster deals are set and the Black Friday ads are out, perennial indicators that the holiday shopping season is in full swing. The National Retail Federation predicts $655.8 billion in holiday sales this season, up 3.6% from 2015.

In addition to securing enough working capital and inventory, you'll want to prepare for the rush in other ways. NerdWallet asked Steve Goldberg, president of retail consulting firm The Grayson Company, for tips on how to get started.

1. Advertise early

To attract early shoppers, your marketing needs to be in front of the right consumers at the right time. According to a survey by the NRF in the first week of November, 56% of respondents had already started buying gifts.

But hope is not lost if you're getting a late start, Goldberg says. Small-business owners can react more nimbly than larger stores, he says. "They can make decisions without having to wait -- that's their secret sauce."

There's still time to use free, customizable advertising for your storefront, website and social media to promote Small-Business Saturday -- an initiative started by American Express in 2010 to encourage shopping locally the day after Black Friday. Nationwide, the event brought in $16.2 billion for independent retailers and restaurants in 2015, making it the most successful Small-Business Saturday to date.

2. Coordinate employees

Scheduling your employees during the holidays can be an absolute nightmare. Amid travel requests and family obligations, you still have a store to staff and a business to run. Make the idea of working the holiday a little more attractive by offering incentives or increased compensation.

You can consider hiring seasonal help, Goldberg says, but it depends on what roles you need to staff. It's relatively easy to fill positions with responsibilities like working a register, wrapping gifts or stocking shelves. But if you own a restaurant or you provide a service with highly specialized skill sets, like custom framing, you'll need to decide whether you feel comfortable leaving your business's reputation in the hands of people who aren't familiar with the product or service.

"The optimal scenario is to have a trained seasonal staff willing to come back year after year," Goldberg says.

3. Improve your website

This year, half of consumers plan to shop online for gifts, according to a Deloitte holiday survey. You'll want to make sure your web business can handle increased traffic from online shoppers, and that your site is easy to navigate and up to date.

Consider taking advantage of a "buy online, pick up in store" feature, an option that nearly half of shoppers said they were interested in using this year, according to a survey by Accenture."It's definitely a feature and function the small-business owner can use as leverage to compete with bigger stores," Goldberg says. "It's a wonderful, seamless way to take care of customers."

An added benefit: Shoppers end up in your physical store, boosting the chances of a spontaneous purchase. In fact, 71% of consumers in the Accenture survey said they'd likely make additional purchases when heading to a store to pick up an item bought online.

But a word to the wise: If you're already behind on holiday planning and prep, now is not the time to alter your e-commerce platform, Goldberg says. Instead, wait for the busy holiday season to wrap up before dedicating time to set up the feature.

4. Review the store's layout

Throughout the season, take inventory of your store's layout. If you notice hard-to-reach items, congestion around displays or other pain points for customers, address them immediately.

Checkout lines are especially important; not only do you want to make sure there is ample room for shoppers, but you should also add displays to encourage last-minute purchases. In particular, showcase items people tend to forget to pick up in their shopping rush, like wrapping materials or gift cards, to help save them an extra trip.

5. Decorate strategically

When setting up displays, you want to be careful not to block a customer's sightline, Goldberg says. This goes for window decorations and product displays. Place products you want to showcase in the front of the store, but make sure they don't block a customer's ability to look beyond. And if a product is on display, make sure it's available and easy to find.

Don't forget: Connect with the community

The holidays, in particular, are an excellent time for business owners to connect with their customers on a deeper level, Goldberg says. Remember names, give smiles and offer extra help.

"That doesn't cost a thing," Goldberg says, "and it's such a gigantic way for small businesses to separate themselves from their large competitors."

Jackie Zimmermann is a staff writer at NerdWallet, a personal finance website. Email: jzimmermann@nerdwallet.com. Twitter: @jackie_zm.