Small Business Owner's Guide to Holiday Gift Giving

Natalia Autenrieth In her professional lives across the United States, Natalia Autenrieth, CPA has audited Fortune 500 clients as part of a Big 4 team, built an accounting department as a controller of a large hospital, and served as a CPA consultant to municipalities. Today, Natalia coaches in the financial industry and writes about business finance, financial technology, and personal money management. Her ghost-written articles have appeared in thought leadership and expert blogs, as well as Kiplinger and Accounting Today. Read more about Natalia and her practice at

Small Business Owner's Guide to Holiday Gift Giving

Holiday time is an opportunity to kick back, celebrate and appreciate your employees and clients. It is meant to be fun and relaxing, but in reality many small business owners experience a lot of stress over the gift giving puzzle. When it comes to employees, is it better to give gifts, or opt for cash bonuses instead? What is an appropriate gift for a top client that is hits the perfect balance between personal and professional? There are dozens of lists online offering ideas for “Best employee gifts under $25”, but is that what makes sense for you and your team?

Here are a few questions to help you re-frame the puzzle and get to the best answer.

First off, let’s get practical. What’s your budget?

Begin by determining your overall holiday budget. Even the most generous-minded business owners still have a business to run, and that means having a money plan.

Depending on your business and traditions, you may be paying for a holiday lunch or dinner for the employees (and perhaps their families). There are client gifts to consider, as well as holiday bonuses. Define the overall budget first for the best possible starting point.

Next, determine who gets gifts.

This step might seem like a no-brainer, but only until you actually begin to make a list. You may find yourself adding people you forgot on the first pass (and feel grateful that you are not doing this exercise at the last minute).

You may also run into logistical questions. For your business clients, do you send a gift just to the CEO, to the company leaders and other key people you interact with, or one big gift (like a gift basket) meant for everyone to enjoy?

Then there are non-client professional connections that you may want to acknowledge. Do you have a vendor that went above and beyond the call of duty to help you meet a deadline?

As you think through these, be sure to write down every individual recipient, not just the company. This will help you figure out the budget splits in the next step.

Now you are ready to distribute the budget.

The simplest way to do it is to take your budget and divide it by the number of people receiving the gifts. For example, if your budget for client gifts is $1,000 and you have 20 clients, each client could get a $50 gift. On the other hand, if one of those clients is responsible for 70% of your annual revenue (or single-handed increased your bottom line by referring another big client), you may want to recognize their contribution with a larger allocation.

As you are thinking about client and vendor gifts, be sure to consider what they are allowed to receive. In certain situations (due to government employment, employment in a role that requires a high standard of independence, or corporate policy) individuals may be prohibited from receiving all but small token gifts.

When it comes to employees, the appearance of fairness in gifts becomes paramount. Your clients are unlikely to compare notes and probably won’t hold a grudge because one got a $200 gift certificate to a local steakhouse and another got a $50 gift basket. However, employees will most certainly notice that one of them got a $35 gift card and another received the latest electronic gadget worth 5 times as much. No matter how you rationalize your decision, it is likely that someone will feel hurt and unappreciated.

What exactly do you buy?

Imagination and knowledge of your audience are your limits. Here are some ideas.

Gift cards are typically a crowd-pleaser. Gift certificates to local businesses, from restaurants to wine shops, are also worth considering. Tip: be sure that your choice is appropriate in a professional setting (i.e. a Victoria’s Secret gift card is probably not appropriate as a holiday gift at work).

Gift baskets come in a range of prices and content options. From wine and cheese to sweets and fruit, many vendors will allow you to customize what’s inside and even add your firm’s logo for a small additional charge.

Books can make a great gift as well, especially if you know that the recipient is a reader. A book that’s a personal favorite (or your favorite discovery during the year) may be a good choice. Business best-sellers and motivational books are also well-received.

You may also consider non-gift options.

If gift-giving is not practical, consider your other options for recognizing and celebrating your employees, vendors and key customers during the holiday season. An open house or a holiday party may be a great opportunity to share delicious bites, drinks and cheer without having to go shopping for gifts.

You should also think about your recipients and what they would prefer. I recall an instance where a friend’s well-intentioned employer gave out beautiful tote bags with the firm’s logo on them as holiday gifts. Those totes, sourced from a well-known outdoors outfitter, cost upwards of $100 each, and I heard more than one person at the party grumble that they would have rather taken the cash. Lesson learned: know your audience.

No matter what you choose to do, by deciding on a budget, putting some thought into the list of recipients and personalizing you choices, you can be sure to bring a smile to someone’s face – and reinforce a valuable relationship.