The holiday season often seems to creep up on all of us, including small business owners. All of a sudden, Thanksgiving arrives, and tasks like planning for a staff party and gifts for customers have gone undone.
The result is often last-minute panic and spending too much out of desperation. Savvy business owners have already put together a to-do list, so these sometimes sensitive agenda items can be taken care of in a thoughtful manner.
Take a holiday party, for example. You first need to figure out what kind of party you can afford, and whether you want to have one for your employees, one for customers, or both.
If your business is doing well enough that you can afford a party away from the office, then you need to book it now. If you want to have an offsite party, but fear it will be too expensive, now is the time to see if one of your customers or suppliers wants to hold a joint party with your company.
If you have a small staff, you might decide to take them out for a pleasant lunch or dinner. Again, make your reservations now. And you might want to think about having it early in December rather than late, when employees start taking time off.
You also should think about whether you want to give your employees a gift. If you do, you should try to select gifts with some sensitivity — management consultants will tell you that employees want to feel valued and appreciated, so forget mugs, pens and baseball caps with your company’s logo.
Giving something personal, say, a book, CD, or article of clothing, can seem like a thoughtful idea, but unless you are quite sure of your employees’ tastes, you’re taking a big chance. Many owners have found that the best route is a gift certificate — to a bookstore for the office bookworm, or a music retailer for the Sheryl Crow fan.
Cash is likely to be welcome, but so is time. You might want to give your employees a gift of some extra days off during the holiday season; everyone is likely to be quite appreciative.
And in a year that has seen great tragedy in this country and places like Pakistan, Indonesia, Thailand and Sri Lanka, all devastated by natural disasters, you might find your employees will appreciate a donation to charitable causes rather than buying them gifts. You might even ask each to choose a charity.
For gifts to clients or customers, again, forget the little doodads that will likely land in the trash in a few weeks. You can follow some of the same guidelines as you would on gifts for employees. Or you can offer them discounts; whether you deal with the public or other businesses, everyone wants to save some money.
If you’re going to give gifts, this is also something that should be planned now. Leaving it to the last minute increases the likelihood of committing a faux pas, and makes it more likely you’ll spend more than want.
Another matter that needs to be carefully considered is holiday bonuses for your staff. If you’re going to give bonuses, you need to decide whether you’re going to give everyone the same amount or whether you want to award the money based on performance. (Some people will tell you that giving each employee the same amount is a gift, not a bonus, but the definitions are not universal.)
Some companies start planning, and budgeting, for their bonuses early in the year. The earlier you start planning, the better idea you’ll have of what you can afford, and, in the case of performance-based bonuses, how much you want to pay each worker.
You might also find that if employees know in advance that they stand to receive a performance-based bonus, that it serves as an incentive for them throughout the year.
It’s up to each owner to decide how to award bonuses, whether it’s a percentage of profits or sales, based on seniority or, as some companies choose a point system. Many have their own philosophy about how to do it. For an owner who’s considering awarding bonuses for the first time, the best thing to do is to find out from other owners what they do, and then choose a system that feels most comfortable.
A final caveat: If you choose a bonus system that’s performance-based, with differing amounts, know in advance how you’ll respond to the almost inevitable disappointment and disgruntlement from those who felt slighted by what they didn’t receive.