The end of the year was a critical time for some startups.
For entrepreneurs in the retail or restaurant space, the holiday season was crunch time. For those in other industries, it was either business as usual, or quite a bit quieter.
Either way, startups need to be ready to react and adjust with the start of a new calendar year, said Lorne Novick, chief services officer at JumpStart.
JumpStart, a venture development organization based in Cleveland, works with both small businesses and technology startups. Small businesses often expect higher sales in the fourth quarter, but should be ready to make real-time adjustments to their 2025 plans if those didn’t come through, Novick said. On the tech startup side, he said those next-year adjustments are still being made, but there’s not a “holiday push” to boost revenue at the last minute. Many tech startups rely on investment income, and, he noted, people aren’t exactly “looking to invest as a Christmas present.”
A lot of small businesses, however, do “leverage discretionary income,” Novick said.
“That’s what the holiday season is about: I’m saving up my discretionary money to go buy gifts for the holidays for colleagues, family, friends, etc.,” he said.
The holiday season, starting with Black Friday the day after Thanksgiving, has long been important to retailers, which have often relied on it “to generate sufficient sales to realize profits for the year,” according to a holiday retail spending forecast prepared for the Ohio Council of Retail Merchants and released in November.
Because Black Friday landed late on this calendar this year, the shopping season was a bit shorter than last. Still, the University of Cincinnati’s Economics Center, which prepared the forecast, was expecting holiday retail spending in Ohio to increase by 1.1% for 2024, compared to 2023. That was lower than the national forecasts for retail spending; the ones cited in the forecast ranged from 2.3 to 7%. The state has lagged in employment growth, as well as in wages and salaries, compared to national trends, the forecast noted.
Still, even a small increase adds up, and the Economics Center was predicting that holiday spending in the state would reach $30.4 billion this year. Final numbers, based on tax returns, are not expected to be available for several more months.
The local impact
A “large portion” of the sales at Off the Wagon takes place in the last five to six weeks of the year, said Michelle Sahr, who owns the business with her husband. In 2023, the business’ sales in November and December made up almost 40% of its total sales for the year, she said. In 2024, those months made up about 38% of total sales, she said, and sales for each year were comparable.
Off the Wagon is a toy and novelty gift shop with locations in Kent and Chagrin Falls. It also sells products online. Off the Wagon offers additional services like gift wrapping during the holidays, Sahr said, and she puts a lot of focus on making sure the stores are well-stocked and neat for customers.
Overall, it’s the economy that tends to drive “visitor spending,” said George Sam, executive director at nonprofit community development corporation Main Street Medina.
“We’re finding that although people enjoy coming to the community and they enjoy the shops and they’re going to the restaurants, I think they’re holding back a little bit on big spendings,” he said.
The retailers Sam works with found November to be a little slow, sales-wise, but most made up for it in December. Medina is a “small business community,” Sam said, and much of its downtown is made up of locally owned restaurants and shops. That includes P.J. Marley’s and The Farmer’s Table, owned by husband and wife team Jon and Patty Stahl. The former focuses on burgers and local beers, while the latter offers a slightly more “upscale” but still local menu, Jon Stahl said, along with a small store.
“Fourth quarter is critical in the restaurant industry. It’s really the make or break for the year,” said Stahl.
During the end-of-year holiday season, people are going out for meals with family, friends and coworkers, he said, and they’re buying presents, like gift cards, which can boost business for a restaurant for the following year.
As entrepreneurs think about the new year, Novick of Jumpstart encourages them to take a “milestone perspective,” thinking about their revenue or capital goals and their goals in expense efficiency. Benchmarks will come from those goals, and there’s room for those goals and benchmarks to change as the year goes on. But setting the goals helps drive the motivation for a business, he said.
“On some level, I’d like a New Year’s resolution,” Novick said.