Don't cancel your Christmas party. It makes no financial sense

22nd December 2021

Recently, the government caused confusion and some mirth by encouraging people to work from home, while allowing companies to have Christmas parties.

And a certain alleged Christmas party last year at 10 Downing St has become a political hot potato.

So please believe me when I tell you, I was planning to write this email well before the new regulations came in.

This is in no way a political comment!

*Breathes deeply... Here goes anyway*

Whatever else is going on in your business, make sure you’ve paid for a Christmas party for your staff.

And if you haven’t, throw them a belated party in January instead (COVID regulations allowing, of course - ahem!).

You see, when businesses are stressed, the Christmas party is one of the first things they cut. It feels like an extravagance when there are salaries and bills to pay.

And similarly, it might feel like too much to organise if it’s logistically difficult or you’re particularly busy in the run-up to the holidays.

But it’s essential for the morale of your staff.

A good Christmas party makes your people feel appreciated and valued, and is a great way of thanking them for everything they do for the business. That will help keep them motivated and makes your team feel connected.

On the other hand, not throwing a Christmas party, especially if that is what you normally do, can have the opposite effect, contributing to an atmosphere of disgruntlement and poor productivity.

And when you lose the confidence of your staff, your entire business is undermined. They’re less likely to work hard on your behalf, to present a positive face to your customers and to have your interests at heart.

A few years ago, I was advising a company which was in danger of insolvency. I insisted they take out their staff for lunch in December, precisely because those were the people who were going to save the business!

Keeping them on side wasn’t a cost. It was an investment in the company’s future.

There’s an important financial principle here.

When it comes to managing your business expenses, the goal should not be to cut to the bone - keeping your costs to the absolute minimum. If you cut the wrong thing, it can sabotage your success.

The goal should be to spend your money wisely and to make sure that every penny that comes out your business pocket is working hard on your behalf.

It’s why, in difficult times, you should continue spending on marketing - because otherwise you have no new source of customers.

And spending on your staff’s welfare, skills, training, morale & equipment is always worthwhile.

I do understand that COVID can make a Christmas party difficult this year. But please do find a way to show appreciation to your staff in this festive season, in a safe format.

And meanwhile, if you’d like help working out where you should spend money and where you should cut in a sensible way, please do give me a call on 01279 647 447.

We can help manage your finances more efficiently so you become more profitable and grow faster in 2022.

Merry Christmas!

Garry

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