Sales Trend Changes:
This seems obvious, if your sales are declining, there is a good chance you are in trouble already. However, do not just watch your sales reports, make sure you are watching by category and vendor as well. If all of a sudden you are seeing an entire category drop, find out why. Is there a new competitor in your area? Are you falling behind on trends? Is your product selection dated or just plain stale? Be sure to watch vendor reports as well, as often a brand shift in the marketplace can be seen quicker on a vendor report than a standard sales report. A great example was the massive shift in the baby carrier market in past few years. A brand of Baby slings had taken the market by storm and baby retailers literally could not keep up. In a dynamic shift that seemed to happen overnight, the company bottomed out leaving retailers either with mountains of unsellable stock or a category that could no longer produce any profits. For retailers that were not watching their Open-To-Buy, monthly sales reports and inventory controls, they lost thousands of dollars in unsellable merchandise. Watch your reports!
Items Per Ticket:
Most modern software programs for retail stores will track this number for you. This term refers to the average number of items each customer purchases on a single bill of sale. If your IPT has been 3.5 for the past 3 years and all of a sudden it drops to 2. You need to figure out why. It comes back to using your software and reporting features to get the details you need to make better buying decisions.
It is also very important to be on point for your niche market. Are you attending the buying shows, trade shows and visiting your competitors. If you aren't... why not? Your customer is shopping somewhere, figure out where and why.
Gross Profit Margins:
Are you cutting prices to keep up? Do you think your customers are only buying on price? If you do, then you have a problem. You cannot play the price game forever, especially if you are trying to keep up with multi-chain stores or nationals. Do not get tricked into believing that dropping your prices will save your business. If you take the time to know your customer, their buying habits, desires and expectations, you can meet them on the sales field with better selection, better service and a better shopping experience. This will then translate into repeat customers, repeat sales and brand loyalty. Don't drop your margins!
Customers buy on trust, emotions and impulse as well.
Cash Flow Maintenance:
If your business is already suffering, take 5 to chat with your accountant about your cash flow and work together on how you can tighten it up. Many business owners are literally functioning month to month with no breathing space not to mention probably not sleeping much either! If you do not have a handle on your cash flow today, you will not have a handle on your business tomorrow!
Take the time to either invest in software that will help you better manage your inventory, products and service purchases or find a consultant who can help you put your plan in place. There are AMAZING programs out there that will take the guess work out of your monthly buying and help you plot your cash flow, open to buy and purchasing well in advance. Wouldn't you like to be able to forecast your sell-offs, plan for trade show and Christmas buying today and SEE how it will affect your cash flow for the entire year? How would you like to use a tool that allows you to "find" money in your ordering and open to buy AND see at which times of the year you will have that surplus? Who wouldn't! (Email me for more information on Open-To-Buy options!
The biggest and most common mistake business owners make when sales drop off is to lay off staff and go to a skeleton crew. This has a two-fold effect of reducing your quality of service and staff to customer ratio as well as reduces the efficiency of your behind the scene operations as well. You cannot possibly do it all yourself or with 1-2 staff! Guaranteed you will end up with staff receiving inventory, frantically trying to get through the pile of boxes and ultimately IGNORING your customers in the process. If you have to reduce, take the time to do it slowly and wisely and do not expect one Manager to do the work of 3 employees!
~Serial entrepreneur that took $2000 micro loan and turned it into a 7 store retail chain and $30 million in revenues! Now a passionate advocate for responsible business around the globe and Retail/Business Consultant. www.leahchevallier.com
"Leah, what are some simple organizational tips you can offer to help get out from the awful pile of papers I always seem to have on my desk?" ~Janet, Store Owner, ON, Canada
COLOR CODING FOR YOUR "IN BOX":
Don't have time to file paperwork every day? Color code and "fast track" your in pile. Have a few different colors of post it tags; matching to things like HR/EMPLOYEES, ACCOUNTING, INVOICES (A/R), INVOICES A/P).. so maybe red for A/P (Accounts Payable).
So your staff expense the odd paid out receipt from the till for postage, UPS drivers, Paper towels etc.. most computer/till software programs print out a receipt at the time of the cash payout. Take your actual product/expense receipt and your till pay out copy and staple them together BACK TO BACK. Scan them.
If you have a SCANSNAP scanner, it scans 2 sides at the same time, your staff can scan in your paid out receipts for you or your accountant, this way you have the till paid out copy with reason code and details of the paid out if there are any questions).
SAVVY STAPLING, SCANNING & STORAGE!
One of my filing pet peeves might seem trivial, but when you are reconciling daily reports for 7 retail stores, you will get organized FAST!
We all get caught up in the daily operations of our business. Regardless of what industry you are in, it is a guaranteed statement that you are B-U-S-Y!
When it comes to fiscal responsibility though, there is no margin for procrastinating. Your bookkeeper and accountant have their expectations for month end, year end in terms of receipts,, invoices, figures and how they want your business presented for processing. But how often do you stop and pull reporting details for YOURSELF and your business growth?
Many retailers have shared with me that they do not have time to pull and analyze reports regularly due to time restraints and lack of knowledge in that area. My advise is as follows:
Having all these numbers at your fingertips is helpful when it comes time to place new orders, tracking your Open To Buy budget, monitoring top performers (and conversely your bottom ones) and weeding out items and categories or expanding new ones.
Need help getting to a streamlined reporting month end? Email me directly!
How do you learn everything it takes to launch a successful business if you have never done it before? How much do you do on your own; how much do you leave to fate and how much do you trust to your friends and family in terms of feedback, support and validation?
If you want to be in business AND make money; you leave nothing to chance, no stone unturned and you NEVER rely on friends and family for honest feedback and product viability comments! They love you too much!
The first step in developing your product idea is to research WHO and WHAT you want this product be. What need in the marketplace is it answering? Why is a mom going to reach for your product on the shelf as opposed to the next competing product? This may seem very basic but it is an important step in developing your game plan and entry strategy later on.Let’s say for example, you love to sew and you want to develop a new line of baby bibs. You maybe have a design background or maybe you just think you can do it better. My first question to you as a consultant will be, the why factor?
It makes sense to me that when developing a new concept; you must understand it intrinsically from the ground up. Good ideas are born every day! What makes the difference is WHAT you do with that great idea and how thoroughly you groom and nurture it.
Anybody who knows the true trial and tribulations of running their own business clearly understands the ups and and downs of business ownership. Many times people naively think that self-employment is a guaranteed fast track to riches and fortune. ROOFL!!! (Rolling on office floor laughing!)
There is no such thing as an easy ride, (unless of course you steal somebody else's successfully established idea, customers, business model and run off with it!). This kind of behaviour is very obviously frowned upon and to be honest, who wants to win by cheating?
Sadly, this type of activity happens all the time. As a business owner you need to take all of these possibilities into account when writing up your contracts with potential business partners, producers, suppliers, franchisees etc. You may be thinking that the business law and contracts don't apply to your business, but you should let a professional/business lawyer make that decision WITH you before you make any potentially expensive mistakes when a vulture does rear it's ugly head.
Here are some areas to consider:
There are many areas you will need to consider but taking the time to protect yourself now can prevent you from legal nightmares in the future!
Leah Chevallier, serial entrepreneur in the Juvenile Industry sharing insight, success and 18 years of award winning retail experience! Took $2000 Micro-credit loan and turned it into $30 million!