Research from global small business platform Xero reveals a significant problem facing small business owners: many acknowledge the potential of targeted promotional strategies, but are being held back from taking part in these initiatives primarily due to lack of adequate financial resources.
A Xero research study of more than 500 small business owners across various industries in the United States recently uncovered a challenging catch-22 at the core of the festive season.
Although 72% of respondents claim that discounts have been the most effective tactic during past holiday shopping sales periods, “nearly a third (34%) have never run any holiday promotions.”
The research study released by Xero indicates that the main barrier is affordability and cash flow limitations, with “30% stating they simply can’t afford to offer discounts and 54% citing financial constraints as the primary factor preventing them from participating in seasonal sales.”
According to the update, this stands in contrast to those who do actually choose to participate in holiday promotions, “with 77% citing cash flow generation as their primary goal.”
Financial pressures are said to be only one aspect of the issue for small business owners. Although discounting remains a primary consideration, small businesses face a more significant set of operational challenges during the festive season.
According to the latest survey, the main challenges during Black Friday include managing “increased customer traffic (37%), executing effective marketing and advertising (35%), and maintaining inventory control (32%).”
Other pressures include “forecasting cash flow (28%), pressure to compete (28%), managing customer experience (27%), packing and shipping logistics (20%), handling returns and exchanges (20%) and supply chain disruptions (15%).”
While some businesses are said to be financially constrained, others are strategically choosing “not to compete on price, highlighting the importance of tailored financial strategies.”
Andrew Kanzer, MD, North America at Xero has shared:
“The real advantage isn’t winning a one-day price war; it’s having the financial clarity to build a profitable, year-round business—even if that means strategically choosing to focus on value, not volume. That’s a choice that must come from confidence, not constraint, and it’s precisely why Xero was not only designed for small businesses, but continues to innovate to help them tap into their real-time financial data.”
Xero’s research, conducted by ResearchScape, surveyed 508 small business owners in “selected industries across the U.S. from August 12 to 18, 2025. ResearchScape is a market research consultancy specializing in customer surveys; no weighting has been applied to the data.”