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Black Friday

See also:
Traditions Turned Financial Fluctuations
Improving Profitability – Fuel for Growth
Product Life Cycle Stages
Beware of the J Curve

Black Friday

In America, Black Friday is an event that is not only the most shopped on day during a typical year, but it also generates huge sales.

“Only in America do people trample others for sales exactly one day after being thankful for what they already have.”

~Author Unknown

Black Friday Definition

The Black Friday definition is a retail store sale that occurs the Friday after Thanksgiving – an American holiday in November. Many consider this event to be the kick-off to the Christmas shopping season. Many retailers, such as Walmart, Kohls, Kmart, Macy’s, Express, and other major retailers, open their stores in the early hours of the morning to receive the first rush of customers. Door busters, sales, huge discounts, and giveaways are all part of this event.

The History Of Black Friday

Let’s look at the history of Black Friday. Black Friday originated in 1952 as the start of the Christmas shopping season. Because many states in the United States considered the day after Thanksgiving to be a holiday as well, retail shops realized that there were enormous amounts of potential shoppers available during this four-day weekend. But since 2005, this event has launched into record numbers for sales, shoppers, etc. For example, sales dropped for the first time since the 2008 recession in 2014. Yet, sales boasted $50.9 billion over that weekend.

Although not all states in the United States permit workers to work on national holidays or even the day after Thanksgiving, companies have broken many boundaries to take advantage of this rush of customers. Over time, retail stores and e-commerce platforms have expanded on Black Friday to include Cyber Monday. It’s become a tradition to many.

Cyber Monday

Because Black Friday became such a hit, online companies created another shopping event – Cyber Monday. It occurs the Monday after Thanksgiving and encourages shoppers to purchase more gifts and things on Monday. Originally, it was launched in 2005.

The Cost of Black Friday

While it may be tempting to join in on Black Friday specials and sales, you have to consider the cost. Remember, a sale isn’t necessarily a good sale. It has to be a profitable sale.

Some of the costs associated with Black Friday include.

How to Win on Black Friday

In order to win on Black Friday, you have to price your products for profit. Especially since you project to sell large quantities of product, you need to make sure you don’t start with a pricing problem. If you cut prices off a product that is already not profitable, then you will loose more potential profit. Before you start planning for Black Friday, make sure your pricing is in check. Click here to download our Pricing for Profit Inspection Guide.

Price for Profit During These Sales

Each sale you make has to return a profit. Therefore, you need to allocate as many costs to each good to make it easier. How much inventory do you need to push in order to turn a profit? But also, what prices are customers willing to spend? The trick with Black Friday is that since everyone is competing for the best deal, you must know what others are pricing the same product at.

Reduce DSO by Turning Over Inventory

The risk for big sales like Black Friday is that there will be some that cancel their credit card transaction for $1,800 worth of product. Because you are putting a lot of cash up front to increase inventory, you need to collect cash as quickly as possible. For example, you can offer discounts for cash only. For other pricing tips, download the free Pricing for Profit Inspection Guide to learn how to price profitably.

Black Friday Definition, History Of Black Friday

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What’s the purpose of attending holiday parties?

It’s that time of the yPurpose of Attending Holiday Parties, Purpose of Holiday Partiesear when every night, weekend, and day is filled with Christmas parties, company holiday parties, and gift giving galore! If you’re an introvert like most financial types, it can be exhausting to put yourself out there socially. I always ask every year, “what’s the purpose of attending holiday parties?” Trust me when I say, there are numerous benefits to attending holiday parties this year.

The Purpose of Holiday Parties

Although some may dread getting an invitation to a holiday shindig, there are important things you should take into consideration. So let’s take a look at the purpose of holiday parties and the purpose of attending holiday parties.

Purpose of Attending Holiday Parties

Company culture is a major contributor to how employees perform in a business. This is a company’s chance to show their employees how important they are. It is an opportunity to mingle with a different department. Whether or not your boss made it mandatory, holiday parties are a great excuse to network and show how valuable you really are. Who knows, maybe you’ll get a shiny new promotion out of it! Most importantly, a holiday party is a way to show gratitude to employees in a personal and professional manner.

Not all holiday parties you will be invited to attend will be for your own company.  Don’t shy away from attending that party your banker invited you to.  While it may sound exhausting to mingle with people you don’t know after a long day of work, seize the opportunity to build your professional network in a fun and non-threatening environment.  After all, wouldn’t you rather network over a cup of holiday punch than across the table at a boring seminar luncheon?

How It Impacts Financial Leaders

Financial leaders (and potential financial leaders) do more than simply find results and number-crunch. Financial leaders familiarize themselves with the goings-on in other departments, including sales and operations. This benefits the decisions they make in the future. A financial leader understands the importance of combining the strengths and opinions of everyone in the company, not just the finance department.  A holiday party is a free event (for the participants, at least) to network and build those relationships.

The best financial leaders recognize the importance of having a strong professional network.  Holiday parties for organizations other than your own give you the opportunity to expand your reach and meet people that you otherwise wouldn’t be in front of.  The nice lady from the software company might have just the answer you’ve been looking for to your inventory tracking problem.  The young recruiter from the staffing firm might seem pushy right now, but you may need him in 6 months.

You never know when the connections you make outside your office will pay off.

Introvert vs. Extrovert

What kind of person are you? Are you the type who stands in the back of the room, checking your watch? Or are you the person to catch everyone’s attention (sometimes a little too easily)? Here’s how to handle different personality types aPurpose of Attending Holiday Parties, Purpose of Holiday Partiesnd how to absolutely rock this year’s holiday parties.

Need guidance in networking? Download your free Networking for Introverts guide and start building your network today!

How To Handle Different Types of People

Handling different personality types can be tough, but after a lot of practice and the right guidance, those 2-3 hours will fly right by. First is understanding the people around you – are they the life of the party, shy guy, new hire, or gossiper? These aren’t the only personality types you encounter at a holiday party, but they generally fall under one of two categories:

  1. Introvert: This is the person that hides behind their drink. The best way to socialize with an introvert is to thank them for taking the time to come, and acknowledge something small. If she has a new outfit, compliment her. If he brought a dish, try it out! It always feels better to know you exist in a large group of people. If you are the introvert, then the best way to survive the night is to participate in the festivities, but conserve your energy by taking frequent breaks. Know yourself, and know your limits – not everyone has the same caliber of excitement. Finally, know that it is okay to leave. Have your exit plan ready when you need it.
  2. Extrovert: Extroverts love a good party. They often tell a lot of stories and have a great ability to connect to others. However, sometimes extroverts might overstay their welcome. As an extrovert, a good way to avoid this is to have a plan. Know who will be there, keep a few stories and events in your memory bank, and remember to eat. All that talking can’t be done on an empty stomach!

How To Rock Holiday Parties

Other than handling different personalities types, here are a few more suggestions to consider.

Prepare Some Conversation Kickstarters

Before you get to the holiday party, have some helpful phrases to break the ice with people. Some of these include:

“What are your New Year’s resolutions for 2017?”

“Have you gone on any vacations this year? Are you planning any vacations for next year?”

Or even referring to something you’ve read about them this year is a great ice breaker. Remember to listen, and not always tell your own experiences.

Choose 3-4 People to Connect With

Many people are intimated by the sheer number of attendees at a holiday gathering.  So, choose 3-4 people to connect with. The important thing to remember is that you don’t have to talk to everyone. Instead, spend your time engaged in meaningful conversation with a few people that you’ve been wanting to connect with.  How do you make sure that you get in front of the person you’d most like to chat with?

Well you should plan to…

Purpose of Attending Holiday Parties, Purpose of Holiday PartiesGet There Early

Getting to a holiday party early has more perks than just having the first access to all of the food. Remember that this is a professional event, and most likely everyone will show up on time to leave on time. Get there early so that you can survey the room as people arrive and make sure that you get to talk to that one contact you’ve been hoping to get in front of.

Arriving early also allows you to “stake out your territory” so that you make sure to get a prime spot to meet people rather than being stuck in the back corner of the room where no one can get to you.

Be Fun & Professional

Since this is a professional event, there are some limitations. Dress appropriately, don’t overstay your welcome and eat and drink in moderation.  It’s easy to get caught up in the holiday spirit, but you want people to remember you for the right reasons, not because you look great with a lampshade on your head.

Conclusion

For an introvert, an invitation to a holiday party can be about as welcome as a root canal.  Rather than seeing the experience as painful, recognize the opportunity it presents to have fun with your co-workers or build your professional network.  Don’t worry about being the life of the party and meeting everyone in attendance.  Focus on those few people that you really want to connect with and make sure that you leave a good impression with them.

And most importantly, have fun!

How will you get through your holiday parties? Download your free Networking for Introverts guide to help build those relationships. 

Purpose of Attending Holiday Parties, Purpose of Holiday Parties

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Traditions Turned Financial Fluctuations

Traditions turned financial fluctuations

Traditions turned financial fluctuations are to be expected in the American economy. Commercialism takes over this time of year with the holiday rush. With an overload of red sales tags on toys, electronics, clothes, and more, consumers are quickly adjusting to this being a norm.  Now with Thanksgiving is right around the corner, we are taking a look at how it has changed drastically from a traditional national holiday to a massive sale.

Financial fluctuations can severely damage your profits. Learn how to price for profit as we go into the most popular sales season! Download the Pricing for Profit Inspection Guide here

Traditions Turned Financial Fluctuations

Financial fluctuations generally shape patterns throughout industry seasons, with one of the largest humps being in the last quarter of the year (especially for retailers). As a financial leader, it is your responsibility to allocate resources to cope with the massive influx of sales, manage profitability, and mitigate any potential liabilities with hosting a sale.

Traditions turned financial fluctuationsHistory of Thanksgiving

Thanksgiving originated in 1621 when the Wampanoag Indian tribe and the colonists shared a meal together after the first successful corn harvest. In 1863, President Abraham Lincoln declared it a national holiday. The tradition is to express one’s thankfulness while sharing a hearty meal of turkey, stuffing, veggies, and a variety of pies.

While the holiday still remains a tradition to this day, the past few years have seen Thanksgiving invaded by the financial juggernaut of Black Friday.

Black Friday

Black Friday is one of the most sought after sales days (for consumers at least) in the United States. Traditionally, Black Friday takes place the day after Thanksgiving in the wee hours of the morning. People camp out to get the best deals on clothes, appliances, technology, etc.  Over the past few years, however, retailers have begun opening their doors to Black Friday shoppers earlier and earlier.  This year, many stores will be open on Thanksgiving day for holiday shopping.

As it’s evolved into an expectation for businesses to have great deals, we’re now starting to question the profitability of this type of event. With Black Friday being a commercial norm, Brown Thursday (Thanksgiving day) and Cyber Monday (Monday after Thanksgiving) are rapidly being seen as just another leg to this madness.

Traditions turned financial fluctuationsWalmart

This massive company is an infamous example of Black Friday hysteria. Having had deaths during their sales in the past due to stampedes of people, Walmart has continued to expand what was originally a Friday sale to a continuous sale starting Thursday at 6pm (in most stores).

Let’s tally up all the costs associated with putting Black Friday (Brown Thursday and Cyber Monday) into action:

  • Employee’s hourly pay (and potential overtime)
  • Manager compensation
  • Product stock and inventory
  • Crowd control training
  • Security to help manage crowds
  • Electricity of buildings, lights, and registers
  • Food for staff (Thanksgiving dinner for employees)
  • Time to price each SKU profitably
  • Liability insurance (in the case of casualties)

Traditions turned financial fluctuations

With all of these extreme sales, companies like Walmart have been able to stay profitable as this “holiday” has grown into a giant. One of the major factors that go into that is inventory. By acquiring a large amount of inventory, you minimize the cost per item and thus create a more profitable ticket item.

Putting Black Friday into production is not cheap. In addition to all of the above, the most important thing is to make sure your products are being priced for profit. Profitability is the number one thing that you need to keep in mind, as you have a responsibility to company stakeholders.

RTraditions turned financial fluctuationsEI

By contrast, REI, an outdoor recreational equipment retailer, has opted-out of participating in Black Friday festivities. Financially, they may have missed out on a slight increase in revenue.

But the real question is, what’s the best decision to make for your brand? Some decisions to gain more profit while going against values may actually compromise your company and result in a loss. No amount of pricing products for profit can counteract any decision that is against the brand.

Traditions turned financial fluctuations

#OptOutside has been a movement that aligns with REI’s mission and vision.  They are able to maintain their customer base and grow year over year without offering the Walmart-style sales. This tradition has smoothed over typical retail sales cycles.

One of the main differences between Walmart and REI comes down to the price difference on their products. REI sells higher quality, more expensive, and sustainable products. People who are seeking their equipment are not the type of customer that demands cheap products.

Deciding whether to host a sale throughout out the holidays? Make sure you have priced your products or services for profit. Download the Pricing for Profit Inspection Guide to help you price accordingly and point out areas where you are not currently producing profit. 

Seasonal Sales – Good, Bad, or Ugly?

With all things, there’s a good, bad, and ugly side to it; seasonal sales are not excluded from this.

The Good | How it Helps Businesses

Seasonal sales help businesses around the country and the world. Projections can be easier when a company knows when its sales will peak and decline.

Start by creating a yearly plan. If your company does not do anything besides one big day, analyze typical sales and cross-analyze them with your goals. How are you going to survive the gap?

Offer Other Products/Services

There are many options to subsidize a limited season. Offer those products or services that are popular in-season to another target market. Another option is to create other seasonal sales within the calendar year.

For example, a company that puts up Christmas lights in October-December will find that their off-season takes up the majority of the year. This provides an opportunity for you to adapt. This particular company uses their same inventory (Christmas lights) to do wedding decorations in the April-August months. While it does not completely match the winter sales, they are able to keep up the cash flow throughout the year.

The Bad | How it Hurts Businesses

With all things good come bad. Traditions turned financial fluctuations are not exempt from the bad.

External Dependencies

Depending on one single event, such as Black Friday, for the majority of your yearly sales, is a risky affair! If something externally occurs before or during said sales event, the entire event could be disastrous. But for some companies, that’s all they have.

If you find yourself in this position, it’s time to start finding other sales methods that do not heavily rely on one-time events surrounding holidays, etc.

Staffing: On-boarding & Overtime

It’s often said that a company spends most of its money on people. Seasonal sales only expands these issues. With these financial fluctuations, companies hire seasonal employees. Training, on-boarding, monitoring, salary (typically hourly for retailers), over-time compensation, and any other forms of employee care are just a few factors that hurt businesses if not managed carefully.

The Ugly | Seasonal Cash Flows

Seasonal cash flows are difficult to project and track. This is one of the really ugly parts of having high financial fluctuations.

Price for Profit

Even though Black Friday is in a few days, prepping for seasonal sales are still underway with the holiday season coming quickly. Easily discover if your company has a pricing problem, and learn how to fix it by downloading the Pricing for Profit Inspection Guide.

Traditions turned financial fluctuations

Strategic CFO Lab Member Extra

Access your Strategic Pricing Model Execution Plan in SCFO Lab. The step-by-step plan to set your prices to maximize profits.

Click here to access your Execution Plan. Not a Lab Member?

Click here to learn more about SCFO Labs

Traditions turned financial fluctuations

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