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Black Friday: From Chaos to Cash

Black Friday's Impact on Small Business Profits

· General Bookkeeping Questions,Bookkeeping Tips

The day after Thanksgiving has long been regarded in the United States as the beginning of the Christmas shopping season. The practice is loosely tied to Thanksgiving parades which kick off the Christmas season. In the late 19th and early 20th centuries, many Thanksgiving parades were sponsored by department stores, think Macy’s Thanksgiving Day Parade. These sponsored events were vehicles to launch a big advertising push for the store. It became an unwritten rule that Christmas advertising had to wait until after the parades.

The relationship between Christmas shopping and Thanksgiving ultimately boiled into quite the controversy in the 1930s. Up until this time, Thanksgiving was celebrated on the last Thursday in the month of November. In 1939, Thanksgiving would have been celebrated on the 30th. However, the Great Depression had been dragging on and many retailers wanted to extend the Christmas shopping season, but none wanted to be so bold as to begin advertising prior to Thanksgiving.

In 1939, President Franklin D. Roosevelt, at the urging of retailers and business leaders announced a proclamation to celebrate Thanksgiving one week earlier - on the second to last Thursday of the month, in this case, the 23rd. This simple moved seemed harmless at first, but actually proved quite controversial. Some businesses celebrated the extra week of Christmas shopping, others were unprepared or unable to accommodate the change. Calendar makers, for example, lost big as the 1940 calendars were rendered useless by the change.

Even many states were incensed by “Franksgiving” as they called it. Many refused to celebrate on the newly proclaimed date, opting instead to celebrate on the last Thursday as they had always done. Finally, in 1941, Congress passed a law ensuring that all Americans would observe the federal holiday on the fourth Thursday of November every year.

With the date of Thanksgiving settled, retailers now have a definitive deadline for kicking off the Christmas shopping season.

The term "Black Friday" initially emerged in Philadelphia during the 1950s. It was first coined by the Philly police force to describe the chaotic day between Thanksgiving and the Army-Navy football game on that Saturday. Large crowds flooded the city for the big matchup and this, combined with the busiest shopping day of the year created quite a disruption for traffic and crowd management and made it difficult to maintain order on that day. Shoplifters also took advantage of the bedlam, creating an even bigger law enforcement headache.

For years, "Black Friday" had a negative connotation due to the congestion, unruly crowds, and overall mayhem it caused in the city. However, a few decades later, retailers saw an opportunity to turn this day into a positive event.

As the phrase gained national attention in the early 1980s, retailers were looking to reinvent the term and drop the negative connotations it held. They weaved a much more attractive story to sell the public. After an entire year of operating "in the red" (representing losses), stores would finally be "in the black" (reflecting profits) by enticing shoppers with special sales and promotions.

Gradually, the negative associations of Black Friday dissipated as it became synonymous with massive discounts, exclusive deals, and the official kickoff to the holiday shopping frenzy. It became a day eagerly anticipated by shoppers and a crucial revenue-generating opportunity for businesses.

This rebranding effort by retailers and the shift in consumer perception transformed Black Friday from a day of chaotic congestion to a commercial success, cementing its place as one of the busiest shopping days of the year in many countries around the world.


A Boom For Business

Black Friday holds significant importance for small businesses as it marks the official start of the holiday shopping season and presents a massive opportunity to boost sales and attract new customers. Here's how small businesses can leverage Black Friday:

  1. Increased Foot Traffic and Visibility:
    Black Friday brings about a surge in consumer activity, attracting large crowds to retail stores. Small businesses can capitalize on this by offering attractive deals and promotions to draw in these potential customers. Leveraging this increased foot traffic helps small businesses gain visibility, especially for local shops competing against larger retailers.
  2. Sales Boost and Revenue Generation:
    Offering exclusive discounts or bundled deals during Black Friday can lead to a significant increase in sales volume. Small businesses can strategically price their products to entice customers without compromising their profit margins. This sales boost on Black Friday often sets the tone for the rest of the holiday season, impacting overall revenue and profitability.
  3. Marketing Opportunities:
    Black Friday serves as a platform for small businesses to amplify their marketing efforts. Utilizing social media, email campaigns, and advertising can help spread the word about their special offers and attract a larger audience. Creative marketing strategies, such as teaser campaigns or limited-time offers, can generate buzz and attract more customers.
  4. Customer Engagement and Loyalty:
    Providing exceptional customer service and experiences during Black Friday can foster customer loyalty. Small businesses can go the extra mile by offering personalized services or exclusive perks for loyal customers. Initiating loyalty programs or offering future discounts for Black Friday shoppers can encourage repeat business beyond the holiday season.
  5. Online Presence and E-commerce:
    In recent years, the significance of online sales during Black Friday has grown substantially. Small businesses can harness the power of e-commerce platforms and ensure their online presence is optimized with compelling deals to reach a broader audience.
  6. Kickstarting Holiday Sales Momentum:
    Black Friday acts as a catalyst to kickstart holiday sales momentum. The success and strategies implemented on Black Friday can set the tone for subsequent promotions throughout the holiday season.undefined

Sales Schemes and Discount Designs:

By implementing the right marketing strategies and tailoring discounts to match their offerings, small businesses can attract attention, drive sales, and stand out amidst the Black Friday shopping frenzy.

  1. Bundle Deals and Packages:
    Combine related products or services into discounted bundles. For instance, a clothing boutique could offer a "Winter Wardrobe Package" including a coat, scarf, and gloves at a discounted price.
  2. Promote Limited Quantities or Time-Limited Offers:
    Create a sense of urgency by highlighting limited stock or a limited-time offer. "Only 50 Available at This Price!" or "24-Hour Flash Sale - Don't Miss Out!"
  3. Offer Loyalty Program Rewards:
    Reward existing customers and encourage repeat business by offering Black Friday-exclusive rewards or discounts for loyalty program members. “Double Rewards Points for Members!”
  4. Provide Freebies or Add-ons:
    Offer free gifts, complimentary services, or add-ons with purchases above a certain threshold. For instance, "Free Gift Wrapping for Purchases Over $50" or "Free Shipping with Every Purchase."
  5. Percentage Discounts:
    Offer discounts like "30% off Storewide" or "50% off on Select Items" to attract price-conscious customers.
  6. Door Buster Deals:
    Create special early-bird discounts for the first few customers or for a limited time at the store opening. “Free Gift with Purchase for the First 50 Customers!”
  7. BOGO (Buy One, Get One) Offers:
    Implement "Buy One, Get One Free" or "Buy One, Get One 50% Off" promotions to encourage customers to purchase more.
  8. Gift Card Bonus:
    Provide a bonus gift card or voucher for future purchases when customers spend a certain amount during Black Friday.
  9. Tiered Discounts:
    Offer tiered discounts based on purchase value. For example, "Spend $100, Get 10% off; Spend $200, Get 20% off."
  10. Exclusive Online Coupons:
    Generate unique online coupon codes for Black Friday shoppers, providing an additional discount or special offer for online purchases.

By capitalizing on the increased consumer activity, offering attractive deals, enhancing customer engagement, and strategically promoting their products or services, small businesses can leverage Black Friday as a pivotal opportunity to boost sales and set the stage for a successful holiday shopping season.


A Bean Counter’s Considerations

Black Friday sales bring both opportunities and financial considerations for small businesses. Proper financial management, especially through diligent bookkeeping, plays a crucial role during this time:

Significance of Proper Bookkeeping:

  1. Tracking Sales and Revenue:
    Accurate bookkeeping helps in tracking Black Friday sales and overall revenue generated during this period. It allows businesses to identify top-selling products or services and measure the success of promotional strategies.
  2. Inventory Management:
    Efficient bookkeeping aids in managing inventory levels. Businesses can track stock movement, identify popular items, and replenish inventory based on sales data. This prevents overstocking or running out of popular products.
  3. Cost Control and Profit Analysis:
    Detailed bookkeeping facilitates tracking expenses incurred during Black Friday promotions. By comparing costs against revenue, businesses can assess the profitability of specific deals or discounts offered.
  4. Cash Flow Management:
    Monitoring cash flow is vital, especially during peak sales periods like Black Friday. Accurate bookkeeping helps in understanding incoming and outgoing cash and ensures sufficient funds to cover expenses.
  5. Tax Compliance:
    Proper bookkeeping ensures accurate recording of sales, expenses, and discounts, aiding in tax calculations and compliance. It simplifies the process during tax season and reduces the risk of errors or audits.undefined

Financial Considerations for Small Businesses:

  1. Budgeting and Forecasting:
    Set a budget specifically for Black Friday promotions, accounting for discounts offered, marketing expenses, additional staffing, and potential inventory costs. Forecast expected sales to align with budgetary goals.
  2. Margin Analysis:
    Evaluate the impact of discounts on profit margins. Ensure that the offered discounts don't erode profitability significantly. Track the gross profit margin for each item sold during the sale period.
  3. Staffing and Operational Costs:
    Factor in additional staffing requirements during peak sales periods. Calculate the cost of extra personnel and operational expenses to ensure they align with expected sales.
  4. Technology and Payment Systems:
    Ensure that the business's point-of-sale (POS) systems or e-commerce platforms are equipped to handle increased transactions efficiently. Confirm that payment processing systems are robust and secure.
  5. Post-Sale Analysis:
    After Black Friday, analyze the sales data thoroughly. Assess what worked well, which promotions were successful, and identify areas for improvement for future sales events.

Small businesses that prioritize proper bookkeeping practices, meticulous financial planning, and a clear understanding of their financial data can navigate Black Friday sales effectively, maximizing profits while maintaining financial stability and mitigating inventory liability.


Originally coined by Philadelphia police to describe bustling crowds, Black Friday has transformed into a retail extravaganza. While the crowds, and even the chaos, may be just as bad as it was on the streets of Philadelphia, the day has evolved into a pivotal day for small businesses to bolster sales and kickstart the holiday shopping season. By implementing strategic marketing, prudent financial management, and leveraging the power of this shopping phenomenon, small businesses can maximize their revenues and establish a solid foundation for continued success beyond Black Friday.



Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial advice. Consult with a qualified professional for personalized guidance tailored to your specific situation.