Retail business success requires a balance between both taking risks and risk management. How do you find that balance, and what areas need the most attention? Here are a few keys to consider to focus on when establishing your retail business.
Managing Your Cash Flow
Managing your company’s cash flow is important in any business, but with a retail business it requires a very sharp focus. It’s important to be strategic in pricing your products. Understanding and being strategic in managing your gross profit margins is key. While you clearly want to price your products to maintain a healthy margin, it may become necessary at some point to discount your items to move through your inventory. If lowering your product price becomes necessary, you want to be able to reduce the price to move the product but still be able to make a profit.
By negotiating favourable pricing and terms with your suppliers from the start, you will be able to carry your inventory for a reasonable price but may also have the opportunity to spread out your payments to the supplier over time. This will allow you to sell through some of the products in order to pay the vendor over the negotiated time. If you are carrying big ticket items for your retail business, you may be able to place the order with the vendor as your customer orders the product, rather than having to carry the actual item in your stock, thus managing your inventory cash flow to your advantage.
Establishing your business online is key and keeping your website and/or social media up to date is critical. Today’s consumers are very savvy and will most likely go online to view your products, pricing, and customer feedback about your company before they even venture out to visit your store.
Make the online experience for your potential customer as easy and seamless as possible. Set it up so that if you were the customer, the items, pricing, product information, and inventory is very effortless to find and view. Having high quality images with very detailed product information will make the difference in not only how your business is perceived but also can determine whether the potential customer is interested in purchasing your products.
Include as much detail as possible regarding each of your products. Provide product dimensions, sizes, colour offerings, and if clothing is part of your product selection, show specific sizing options along with the measurements for each article of clothing.
Test out your website and monitor the traffic to track the results of online visitors to your site. Through this analysis you can find the right type of marketing mix that will optimize the shopping experience for your customers and drive traffic to your store — both online and in person. Email marketing can also be effective to keep your company fresh in the mind of your customers, promote new products, and offer special products through promotions. Find what works best for you, and when necessary, change it up if you notice your traffic slowing down.
Hire Effectively & Find the Right Staff
Turnover in retail staff is, unfortunately common. It is also expensive and disruptive to your business. Create and maintain a focused hiring process to identify the right staff for your business with a clear vision of how to best identify, hire, and train great people to help you with your retail store.
When a knowledgeable employee decides to leave, the experience goes out the door with them. It takes time to find the right type of employee that fits in to your company’s culture and train them to know your company, the products, and the systems and techniques you have established for your business.
Spend the time to identify and implement specific training procedures, goals, skills, and methods that will make them, and your business, successful. Employees who are well trained and confident in their responsibilities – who also feel appreciated – tend to stay in their jobs and become loyal to the company they work for.
Establish Outstanding Customer Service
Providing your customers with stellar customer service can set you apart from your competition. Having great customer service doesn’t cost you any more than having average customer service, but it will earn you stronger customer loyalty by training your staff to offer an outstanding customer experience in your store.
In addition to increasing the sales of the products themselves, great customer service can earn you the loyalty of your customers for the long term. There are many ways to provide this type of service that sets you apart from the competition. In addition to their online or in person interaction, other tools also help provide opportunities to entice your customers to return to your business. Creating specials on social media, providing customer loyalty programmes, email marketing campaigns, and point of sale prompts can also offer additional traffic towards your products and store and encourage repeat business.
Your retail business needs to be properly insured to protect all that you have built. Business insurance is a policy that covers your business assets, that is tailored to your business. Business insurance coverage protects the equipment and things that keep the business running.
As part of business insurance policies there is retail insurance to cover your leases for each location, as well as proper coverage for glass insurance for your store front locations.
It’s critical to identify and maintain suitable business insurance for your company. Quotes for insurance can be obtained from a range of sources. You can contact the insurance companies directly, however this generally involves a lot of running around if you want to compare quotes from a variety of insurers.
Use of Technology
Mindful use of the technology you have available can help increase your business and drive traffic to your store. Used thoughtfully, technology allows you to reach additional customers that may be familiar with your store but have not yet step foot into it or visited your website.
Technology can also be a huge asset that will help you run and maintain essential functions behind the scenes. Accounting software will be key in helping you to manage payroll, taxes, inventory, and point of sale information. As you do implement key software programs, ensure that your relevant staff is well trained and comfortable using it. Also make it a point to take advantage of the in-app training and tutorials that will make it easier to understand and hit the ground running to understand the full capabilities of these programs.
Which apps make the most sense for your retail business?
- Cloud based apps provide you and your team with access to your account from any device, making it easy to login.
- Boundaries and permissions can be set within different apps that control the level of information that can be viewed by different levels of employees – authorisations can be set specifically for the owner, manager, and designated sales staff – enabling only pertinent information to be viewed appropriate for the different team members.
- Scalable apps allow you to use the basic functions in the beginning and allow you to add different tools as your business grows and your needs increase – adding new users or accessing the information from different locations as they are established.
- Extending the functionality of the apps, as needed. As your business needs expand, you can add more extensive functionality by adding features and tools to the programs. Some apps may also add the ability to integrate their programs with other existing programs currently being used by your company.
If you are unsure what your initial business technology needs are, seek out an expert for advice. It’s critical to get this technology in place in the beginning so that you’re not playing catch up later on, making it more challenging (and expensive) to get the right tools in place to help you run your business effectively.
As with any business, finding the right location makes all the difference in the world for your success. If you are able to have multiple locations, not only are the physical locations a key in your success, but having a solid and logical inventory location, central to your locations, is critical to your business. Handling multiple retail locations requires a lot of concentrated focus and establishing a stock location that supports each of your retail establishments is critical. All locations need to be able to support one another. It’s also very important that if one location is not successful it won’t negatively affect the other locations.
Multiple locations can be set up in a few different methods – establishing individual stores as a franchise, coordinating the location with a business partner, or by having a general manager. Consider contacting an expert to gain their advice on the best way to run multiple locations, someone who has specific experience in retail businesses.
There are multiple areas of risk involved including legal and tax implications. Analysing what is working and what may not be working at different locations may force you to make some serious decisions – do you need to change up your marketing, move the business, or possibly close a location? These are big decisions that will need to be monitored and having and advisor to contact as these situations arise can be a huge asset to managing your company successfully.