By Myrna Rodriguez Co, SERDEF Media Bureau
(An abbreviated version of this article was published in Sunday Biz, Philippine Daily Inquirer, December 21, 2014)
It’s the season to be merry. It’s the season to make money.
For many small entrepreneurs, the holiday season usually brings brisk business and a spike in revenues. With the 13th month and bonus pay filling up pockets, spending for gift, decors, food and other holiday-related goods and services escalates. Little wonder Christmas is sometimes called the “crazy season” of spending and consuming.
Peak demand is, however, not an unmixed blessing. Manufacturers and traders would be the first to say they have to huff and puff their way to a slice of the holiday “pie.”
As early as August or September, entrepreneurs focus on making sales and making sure they have inventory of the right kind, quality and quantity to optimize sales. Higher production means stocking up on labor supply. Back-up capital is, of course, required to get the supplies and hire the extra help needed to cope with increased business.
Thinking up incentives to entice customers to their doors is another challenge entrepreneurs have to face during the season.
Not always peak season
With the kind of products they carry, Chito and Aida Madrono of 13 PM Enterprises, maker of Eureka board games and educational toys, confirm the last quarter of the year is truly peak season for them. As early as October, various department and book stores carrying their brand begin to place their orders.
“Believe it or not,” Aida says, “the demand extends up to January, since young people have extra spending money from all the Christmas ‘loot’ they receive.”
Cecil Pagdanganan of Golden Sun Flowers and Décor Shop in Pasig City, estimates that revenues rise by about 300 per by October through December. Much of the extra income come from manufacture and sale of fabric poinsettias, Christmas balls, crystals, sequins, and glitters, and lanterns.
Her shop accepts holiday -decorating projects from residential villages like Forbes Park and Valle Verde and institutional clients like United Coconut Planters Bank. Decorating commissions also come from household clients in villages as upscale as Forbes and Dasmarinas.
Cecil is so upbeat about prospects this year that she expanded her store to the unit next door to accommodate displays of Christmas trees, Nativity dioramas and giant parols.
It is also peak season for Cagayan-de-Oro based Vivian Libao , owner of Puyo Handicrafts, who recalls she and her weavers and sewers began preparing for the season’s inventory since October. Her consignees are also rushing to place their orders to cope with the expected demand. Items selling at under P100 are the best sellers, she says.
Not all entrepreneurs, however, get to enjoy the holiday windfall.
One exception is Ian Carandang of Sebastian’s Ice Cream, recognized as the first artisanal ice cream in the country. He explains that Christmas is not a busy time for him because ice cream, unlike cakes and cookies, does not travel well.
He is looking at options like dry ice packs and insulated packages and home delivery service. Gift certificates can be somewhat of a solution, too, he offers, but “… can you imagine going to a potluck party with GCs?”
For Mity de la Pena of Snack Shack, a fast-rising burger joint in Metro Manila, Christmas season is always an unstable month. Business can be slow since students, who dominate the customer demographic, are preoccupied with culminating activities. Still, there are occasional good days too when youngsters celebrate the end of examination week.
What has really dampened business this season, he points out, is the weather. “Sudden downpours discourage customers from lining up to get their burgers.”
Coping with peak demand
How do entrepreneurs cope with the demands of rising sales?
The Madronos avoid hiring additional help by asking their workers to work overtime. It makes sense, Aida says. “If we get in new workers, it will take time to train them before they become fully productive. Our core people are experienced workers who can be counted on to turn in high output; never mind the premium we pay for OT.”
Neither do they have to scrounge around for additional capital to fund increased production. Suppliers help by extending generous terms, while customers pay in cash. “I guess we are established in our market niche, earning for us concessions from our associates.”
The biggest challenge is coordinating production and delivery of outputs from sub-contractors. “We job out our plastic parts, injection, machining, and silkscreening. We also have home workers who clean, polish, and buff parts. It can be a nightmare synchronizing the diverse processes into a smooth work flow.”
For her part, Cecil has trained workers, at any given time, who are on call when she bags big projects like a wedding or a debut. Christmas is an opportunity to give these stand-by staff full-time work for at least a few months.
Capital outlay is a minor problem for Cecil. Her “50-per cent-downpayment policy” pays for most of the material costs. At exceptional times she gets cash-strapped, she goes to a moneylender for fast, no-hassle credit.
Like Cecil, Vivian has a back-up labor force that works with Puyo Handicrafts on part-time, on-call basis. “We also recruited sales ladies to man bazaars, as well as additional delivery and collection manpower.”
Mity de la Pena admits his burger business has been short on hands since the holiday season started. “We have student part-timers who are understandably busy this period, so we’ve been short on back-up staff as well.” Thus, Snack Shack’s regular crew just has to double time and make do.
Holiday promotions
Both Eureka products and Puyo handicrafts see little need for promotion. The toy company is secure in its position in its market niche, while the craft firm has had buyers looking for their products, especially the less expensive items.
Golden Sun Flowers and Decors uses Facebook and Sulit.com to maximize its exposure. Most effective for her by far, however, is word of mouth – the reputation she has built as a florist and decorator who gives value and quality for the low fees she charges. She also offers 10 per cent discount deals.
Sebastian’s introduces a Christmas-themed ice cream flavor every holiday season. This year, in addition to the queso de bola, puto bumbong and bibingka espesyal mainstays, Ian released food for the Gods and dark chocolate peppermint specials.
Use of social media is a promotional tool used by all five entrepreneurs featured in this piece.
Time to give back
As these entrepreneurs keep up with heightened demand, they also make sure to take care of their people.
All five entrepreneurs hold Christmas parties and give 13th month pay and other incentives to their people. Most distribute Noche Buena grocery bags.
A highlight of the Puyo and Snack Shack parties is giving recognition to exceptional employees.
At 13 PM, when the business has enjoyed a good year, employees get more financial perks.
As Vivian says, “Christmas is a time for giving back,” which Mity echoes with: “It’s a special time for all of us so we make sure our people feel the holidays in spirit and practice.”