Is Black Friday good for small businesses?

With more than half of the British population intending to hit the shops during the 2024 Black Friday sales, and an estimated £3.2 billion to be spent on the weekend starting Friday and leading to Cyber Monday, you may be wondering if a Black Friday sale would be a smart decision for your small business.

When is Black Friday?

In 2024, Black Friday will fall on 29 November, the day after the American holiday, Thanksgiving. It marks the start of the Christmas shopping season and is a popular way for businesses to sell off old stock, gain a sales boost just before December starts, and attract attention and momentum in time for the winter shopping season.

What about Cyber Monday?

Some businesses have decided to extend Black Friday to include the following weekend, all the way into Monday. On Monday, many businesses will offer sales on technology items, hence the name Cyber Monday. This year, Cyber Monday falls on 2 December 2024.

Why do some Black Friday sales start much earlier in November?

That’s a tactic some businesses have decided to undertake. It’s not uncommon these days to see “Black Friday deals” start much earlier in November – as a way to capture the attention of customers.

One related marketing tactic some businesses have been using involves providing customers, newsletter subscribers, or prospects with “early access”. Essentially, as a way to encourage customer loyalty or build up a list of contacts, brands may provide earlier access or special Black Friday deals to anyone who is signed up for their newsletter.

The pros of Black Friday for small businesses

Businesses that decide to run Black Friday sales tend to do so for one of the following reasons:

Increased attention

A sale can mean more eyes on your business, which could have a positive long term impact by opening up your visibility to new customers. Black Friday also gives you a good reason to send out a newsletter to any historic contacts, post on social media, and even partner with other brands to co-market.

Working capital in time for Christmas

If a Black Friday sale leads to increased revenue, this could be a welcome cash flow relief in time for Christmas. Some businesses need increased funds to purchase inventory in the period leading up to Christmas – a solid Black Friday sale could be a way to access those funds without the need to seek external funding.

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Shift autumn stock

Black Friday can provide a good opportunity to sell off old inventory in time for the winter stock up, both in terms of funds and space. If there are any lingering items you want to clear, this could be the opportunity.

Black Friday cons and risks for SMEs

With every pro, there’s a con. Here are some of the flaws when it comes to Black Friday.

An extremely competitive landscape

Some of the largest businesses in the country run Black Friday sales. They can sometimes slash down their prices so far that it becomes impossible for small businesses, who may not have the same resources or access to the same wholesale supplier deals, to compete.

How little is too little?

Since many businesses run Black Friday deals, this can lead to a tendency to push one another further and further down in a cost-slashing spiral. A problem can arise here in that if you run a Black Friday deal and offer a 5% discount, consumers, who are bombarded with much larger figures throughout the day, could perceive the offer as underwhelming.

Underwhelming results

You may slash costs, run a costly marketing campaign, and increase staff capacity for the day, only to find your results underwhelming. This can be a particular problem if Black Friday ends up earning you less than you spent on it.

You may also find that those new customers you put so much work into attracting with your sales don’t return once prices increase again, making Black Friday a one shot campaign rather than a lifelong customer acquisition strategy.

Is Black Friday good for small businesses?

That depends a lot on the business. While the increased sales and stock clearance can be beneficial, reduced profit margins, heightened competition, and the need for increased staff capacity, could make Black Friday an underwhelming, possibly even an unprofitable, event.

Should you run a Black Friday sale?

So, bearing that mind, should you personally run a Black Friday sale for your business? Here are some questions to ask yourself when making a decision.

Are you aware of the legal requirements surrounding sales?

In the UK, there are regulatory considerations surrounding sales, pricing strategies, and even introductory offers. If you do decide to run a Black Friday sale, it is worth familiarising yourself with these.

Can your website handle the increased attention?

If you sell through a website or other online medium, are you sure it could handle the increased traffic and sale processing? The last thing you want after running a costly marketing campaign for Black Friday is for the website to crash and all those sales to be lost. Check with your hosting provider what would happen if you have an increased traffic surge.

How will your customers and target market react?

Does the deal you can offer them meet their expectations? Will a Black Friday sale increase their loyalty? Will they expect similar discounts in the future? Are you happy to provide those discounts? Consider how your unique target audience may feel about a sale.

Are your competitors running a Black Friday sale?

Perform some competitor research to see who else is running a sale. Don’t be fooled, this isn’t a simple case of if they are running a sale, you should run a sale. Doing the opposite could be a unique way to differentiate. 

For instance, if you’re a local brick and mortar store, you might decide to focus on Small Business Saturday, which takes place on 7 December 2024 instead, as a way to stand out among the larger high street shops. Or, if you’re in the B2B or high ticket space, it’s possible your competitors are not running a sale and Black Friday could be a way to grab attention in a quieter space.

Find a business loan with Funding Options by Tide

It’s not uncommon for businesses to need to purchase inventory just before the Black Friday sale and winter holidays, but for that increased need to have a negative impact on working capital.

Business loans can sometimes be a suitable way to purchase stock in advance of sales season, with the ability to return the funds once customers have purchased the stock. If you’d like some assistance finding a suitable loan, just click the link below and we’ll see if you’re eligible for a loan of between £1,000 and £20M from our network of over 120 lenders.

Find a business loan.

Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.

It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.

Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.