As we enter the holiday season, many retailers may see the seasonal cycle of increased demand for goods and services.

Many small business entrepreneurs depend on this fourth quarter to make their business profitable for the year. Consequently, focus needs to be on making sure to manage this part of the business cycle. I advise my clients to plan for it and be prepared.

For businesses that have been through a fourth-quarter holiday selling season, the best place to start is to look at sale levels for the past three years with the most focus on the sales level for this time last year. I say starting point because things can change in a year (or much shorter time frame) such as the economy, personnel as well as product or service offerings.

So consider the environment and conditions in which your business was operating last year and adjust accordingly. For example, if sales through the first eight or nine months this year increased compared to the same time last year, is it reasonable to assume that the fourth-quarter sales should increase for this coming year? As my economic professor once said, “it depends.” Consider the underlying cause of those changes and determine if those will hold true for the fourth quarter.

To drive those seasonal sales successfully, both existing and startup entrepreneurs need to consider how much inventory to purchase to meet an increase in demand. For those selling services, consideration must be given to ensure adequate capacity. For example, how many more toys does one need to buy or how many more staffers for reception areas does one need to hire?

Here are few other items to consider for the coming season:

— Cash flow. As many of you who follow my articles know, I emphasis that having a business plan for the long term and managing cash flow in the short term are imperative to success. For those businesses with strong seasonal growth, managing cash is critical.

There are two important considerations here. The first is to ensure that spending on inventory, hiring, marketing, etc. does not out strip the anticipated cash flow and profits generated from the fourth quarter sales. The second is to be sure that processes and procedures are in place to make sure that the hectic sales environment does not leave the opportunity for money to not make it to the bank (think protecting yourself from theft).

— Marketing. Review your marketing plan for this time of the year. What needs to be changed? Does your marketing reach your intended customer as well as convey the message you want conveyed? Also, what marketing do you see being done by your competition? What new opportunities arise from the season such as sponsoring a Santa visit, being in the Christmas parade, or joining with complementary merchants for a seasonal event?

— Retail hours. This is critical, and some small business owners either don’t consider it or ignore it ... to their peril. A basic tenet of small business success is that a business owner sells when the customer wants to buy. And today’s options are wide and deep. The internet alone provides for 24-hour/seven days a week purchases. Amazon and other internet retails will soon begin to see increase in their activity.

How does a small business compete? Consider increasing or changing hours to better accommodate shoppers especially retailers of specialty or niche products or services. If a business is closing at 5 p.m. and customers don’t get off work until 5 p.m., who loses? Not the potential customer. He or she simply goes to a store that is open past 5 p.m. or goes to the internet.

Ah, yes, the internet. Do you have a web presence (hopefully the answer is yes) and is it ready to take and process sales on line? If not, can it be made to do so? Give yourself the fighting chance in the internet sales arena by having a functioning web presence.

These are just a few considerations for the coming holiday season. Please contact our office if you have questions or need assistance.

Chris Wooldridge is district director of the Murray State University Small Business Development Center, a member of the Kentucky SBDC network. The center provides planning, consulting and training. Call 270-809-2856 for more information or to schedule an appointment. On the web: ksbdc.org.