Despite strong sales expectations for the upcoming holiday season, small business owners aren’t in an overwhelmingly giving mood this year.
The vast majority of small business owners say they expect their holiday sales to be as good or better than in 2014. However, they don’t have plans to share the wealth with their employees in a big way, according to an inaugural American Express Open holiday growth survey.
The reason for their constrained giving may be that business owners expect revenue from holiday sales to drive growth for the upcoming 12 months, according to the survey. So they may want to retain as much cash as they can to fuel expansion.
Fifty-five percent of small business owners--defined by the survey as those with 100 or fewer employees and revenues of $250,000 or more--said sales would equal those in 2014. More than a third said sales would exceed volumes from 2014. More than half said their potential for growth in 2016 is contingent on holiday sales.
So it’s perhaps unsurprising that when it comes to acknowledging the employees who contributed to the past year’s successes, many entrepreneurs have begun to channel Ebenezer Scrooge.
Half of those polled said they plan to give a “small stocking stuffer” when it comes to bonuses, of less than 5 percent of an employee's total salary. Nearly a quarter said they’d give no bonus at all. Roughly a quarter of respondents said they’d give between 5 percent and 15 percent of annual salary. Five percent said they’d give more than 15 percent of annual salary.
It should be noted that 42 percent of those polled said that bonuses would be bigger this year than in 2014, while 40 percent said they’d be lower.
In addition to monetary rewards, half said they’d host holiday parties at an average cost $2,100, about equivalent to 2014, and 42 percent said they’d give gifts, with an average total value of $5,370, also roughly equivalent to the same time period a year ago.
Perhaps more significantly for the economy, nearly three quarters of respondents said they had no plans to hire for the holidays. Of those who do plan to hire, 60 percent said they’d keep new staff on for a period of one to three months. Just 11 percent said they would keep holiday staff on for six moths or more.
American Express polled 1,000 small business owners online in October.