Bank holidays vs small businesses

For many people, bank holidays are keenly anticipated. Whether it’s to enjoy an extended weekend, bolster annual leave or maybe even (if you have a generous employer) take advantage of extra pay in your hourly wage. 

But for small businesses, they can cause problems. 

However it’s not a one-size fits all situation. If your business is seasonal, say on the coast, and relies on happy customers spending more cash as they enjoy an extended holiday - then it’s happy days. But if your business is B2B - a consultant, for example - and your clients are all closed for a long weekend, it can be more problematic.

It makes for a nuanced picture. And with May containing both the Early May bank holiday and the Spring bank holiday - now feels like a good time to lay out some of the common challenges and advantages small businesses face when it comes to bank holidays. 

Sales

Sales are important for pretty much any business, so this feels like a good place to start. 

An obvious advantage of a bank holiday is the odds of increased sales - more people off work = more people out spending money. It offers the chance to present your goods to customers who are spending money which they might not be spending on a typical week.

Now this is a great advantage if you run a retail or hospitality business, although the term “make hay while the sun shines” remains firmly applicable. If you’re relying on folk coming out to enjoy a sunny day out and it rains - that’s likely to be disappointing.

But sales can dip significantly for other sectors - whatever the weather. 

If your business operates in financial, B2B or professional services and your customers and clients are all out of office - then you’re likely going to see a dip in income and productivity. Something you’ll definitely want to plan and budget for. 

Employee morale

Another double-edged sword is the impact a bank holiday can have on employee morale. 

If you close on bank holidays, your employees will enjoy a boost to their morale. A paid day off to enjoy life, hopefully meaning they return recharged and raring to go. Effectively one day off can whip up the energy needed to actually lead to higher productivity in the long run.

The flipside of that is if your business doesn’t close for a bank holiday. You’ll be enjoying the extra sales - particularly if you work in hospitality - but at the cost of your employees’ energy levels. Not only are they working when many are enjoying a day off - the shift is likely to be much busier too. 

You can offset the potential negative impact on employees by offering incentives like additional pay or a day off in lieu. But despite what people might think - you aren’t legally obliged to pay time-and-a-half or double time to staff that work bank holidays, nor do you have to offer them alternative time off. 

Operations

A big advantage of everyone taking a day off is that it gives you the opportunity to work on maintenance. Things like software upgrades, general reorganisation and system maintenance that can’t be done when normal operations are in full swing.

Making the most of this downtime can help you avoid the need to carry out maintenance when you could otherwise be trading. 

You can also use the time to get your finances in order - is it time to renew your business insurance? Be sure to use the time to research for a cheaper quote. Cash flow a problem? Consider applying for a business credit card or invoice finance. And if self-assessment is coming up - do you have a business bank account? Many of them come bundled with accounting software to make life easier.

As with many of these examples though, there can be disadvantages too. Bank holidays can often impact supply chains - that might be because suppliers are taking the day off, or because the traffic’s worse. This can have an impact on receiving and shipping goods - both of which can affect not only the bank holiday itself but also the day-to-day operations following.

Careful forward planning can help mitigate this.

Promotion

Bank holidays can offer great opportunities to promote your business. Think about the type of adverts you see on TV around Christmas, Easter and spring. ‘Flash sale’ here and ‘offer must end’ there.

You can consider similar promotional campaigns to attract new customers and ultimately increase revenue. Think about whether you can launch a new marketing campaign, aimed at potential customers looking to spend over the bank holiday. You could combine it with special promotions or flash sales. A cursory glance at what larger businesses do around bank holidays can be a helpful starting point for your research. 

Promotions can cost money though - whether it’s the impact on margins by reducing the cost of your goods or services or the price of social media advertising. 

Cash flow is tight at the best of times, but financial planning to ensure you make the most of the situation could really help you both avoid spending too much and hopefully making more in return for your efforts. 

Community

Small businesses are the lifeblood of our communities - a phrase we hear banded around by politicians all the time - and one that couldn’t be more accurate. 

Using the additional day off to give something back to your local community can go a long way in strengthening community ties. You could offer to sponsor a local event, or participate in one on behalf of your business. Both ideas give increased visibility to your business while making you feel great at the same time.

But for one final caveat - don’t forget to check what your competitors are doing. It might be a great idea to take the day off to participate in community events and give your employees the day off, but if your competitors stay open - you might lose customers to the competition. 

Avoiding inconveniencing customers is a golden rule - and sometimes your hand might be forced - but where possible, try and pre-empt what others are doing so you don’t miss out.