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In Houston, the amount of loans to small businesses grew to a record high $963.5 million in Fiscal Year 2016.
Yolanda Garcia Olivarez, who directs the Small Business Administration South Central Region office in Dallas, said contrary to political rhetoric, small businesses aren't dying.
"And the increase of 19 percent shows that more and more small businesses are getting out there and they're investing in their business," she said.
Nationally, this year's Small Business Saturday after Thanksgiving saw a 13 percent increase of shoppers compared to the previous year.
That's good news because Olivarez warns that stagnant holiday sales can spell the beginning of the end for small businesses.
The SBA put together a list of tips about what they should be aware of (see below).
One is to keep up with the increasing share of online sales.
"If small businesses don't realize that they need to use Facebook and Twitter and everything else to push their inventory and to push their small business," Olivarez said, "they're missing out."
They should also make sure to keep the right amount of inventory and to focus on products that differentiate them from big retailers.
The SBA compiled the following six hurdles small retailers face during the holiday shopping season, and ways to avoid them in the future.
- Lack of inventory control. Inventory control is crucial for all small retailers, especially during the busy holiday selling months. It is important to remember that inventory equals profits, and knowing how much product to order, when to order it, and what items to order can be the difference between having cash in the bank or aging inventory on the shelves.
- Hiring the wrong employees for critical positions. There is a cost to hiring the wrong people for key positions. Small firms tend to have less layers of management between the owner and the employees, therefore new hires must be able to perform with less direct supervision and be motivated to get the job done right the first time. Avoid this issue by writing a detailed job description, and immediately instilling a sense of extreme customer service in each and every new employee.
- Undercapitalization will kill the holiday spirit. Cash flow is the life blood of all small businesses. Cash flow allows a business to make payroll, pay suppliers, and keep its doors open. Business owners should immediately increase cash flow by collecting accounts receivables in a timely manner; don't keep cash tied up in unnecessary inventory; and eliminate unprofitable account relationships.
- Not embracing online sales and social media. U.S. Census Bureau data shows that more than $1.2 billion in e-commerce sales were made during the first three quarters of 2016 – a 15.7 percent increase over the same period last year. By the end of 2017 it is estimated that more than 60 percent of all U.S. retail sales will involve the web. To stay competitive small retailer must develop a retail web presence. Also, leverage Twitter and Facebook to promote one-day sales or plug special product lines and high inventoried merchandise. Use Facebook advertising to establish more of an emotional connection with shoppers.
- Not delaying the employee office party and social events. It is sales crunch time from Black Friday until New Year's Day. Office parties can cause distractions at a time when a business needs to be especially productive. Too much food and drink can not only cause a nasty hangover, but sidetrack employee and management's focus. Consider moving the company party until after New Year's Day and call it the annual thank-you event. Tip: Involve the entire community in this thank you party.
- Innovation and creativity lost. Historically, locally-owned small retailers beat their big box and online competitors by providing outstanding individualized customer service. Internet sales events have pushed large retailers into flooding the market with lost leader pricing on a wide array of holiday products. Small retailers must take the offensive by selling creative and innovative products that cannot be found at the local mega mall or online. Create a unique customer experience that will draw shoppers to travel outside of their comfort zone, and discover that out-of-the-ordinary shopping district with ten trendy stores, not 100 traditional chain stores.