With tax season behind us, a recession looming and gas at an all-time high, is there anything that business can look forward to?
You bet there is: It is tax rebate time!
And if you're smart, your small business will have a plan in place before those checks are ever cut to help consumers spend their stimulus payment with you.
But if you don't think ahead, then there is a good chance that your small business piece of the government pork pie will be swallowed up by big retailers who already have well-established plans to part consumers from their rebate checks:
- In 1993, when taxpayers received child tax return checks, J.C. Penney (JCP) - Get J. C. Penney Company, Inc. Report offered customers an in-store check-cashing service, and the retail giant is considering doing so again. As J.C. Penney CEO Mike Ullman recently told Wall Street analysts: Penney's "would obviously compete vigorously" for the rebate dollar.
- Sam's Club (a division of Wal-Mart (WMT) - Get Walmart Inc. Report) is polling small businesses so as to understand which discounts would be most attractive in the next few months.
Why are the big boys already ready?
Because these stimulus checks are not chopped liver. Roughly 130 million U.S. families can pump upwards of $100 billion into the economy beginning in May.
Of that, the National Retail Federation estimates that about $43 billion will go to retailers.
This means that small businesses, restaurants, shops and other small establishments can potentially expect a significant boost this spring if they are savvy enough to play like the big corporations.
Understand the psychology
: While the whole idea behind the economic stimulus package was to get people to take their $300 and $600 checks and spend the country out of recession, the reality is apt to be a little different.
People are nervous right now -- worried about their jobs, about the price of gas, about paying bills. As such, they are unlikely to simply go blow the entire check on, say, a new big-screen plasma television.
More likely: They spend part, and either keep part for savings or to pay bills.
Give them a reason to shop with you
: Because of this psychology, and because people will likely be more cautious than not, discounts and sales will carry the day.
A "Tax Rebate Sale" is just the sort of thing to both catch consumers' attention and appeal to their desire to spend and save at the same time.
It is not often that I counsel small businesses to compete on price with big businesses, because we usually lose, but in this case, go for it. Cut prices and get the business.
Make it festive
: There are plenty of reasons that Americans may feel dour right now, including a war seemingly without end and economic uncertainty.
A "free" check from the government is reason to celebrate and the savvy entrepreneur will get that. So make your discounts obvious, festive and fun. Understand that those who head out to spend their rebate will be excited to do so. Tap into that feeling and use it.
Rebates: They're not just for Penney's anymore.
Steven D. Strauss is a lawyer, author and USA TODAY columnist. His latest book is the
Small Business Bible
. He has spoken around the world about entrepreneurship, including at the United Nations, and has been seen on CNN, CNBC, MSNBC,
The O?Reilly Factor
, and many other television and radio shows. He maintains a Website at www.MrAllBiz.com.