With the local economy still looking uncertain and as many as one in eight independent retailers going under, Business Link WM arranged for some sharing of advice on how to survive the next few months. Aimed at independent retailers the advice could apply to many more sectors.
Shop Survival Guide
Trading over the next few months will continue to be difficult, probably even harder than it is now.
You need to be proactive and start to plan and act NOW. Simply hoping things will be OK is not enough.
Here’s just 20 ideas/key points that you might want to think about for your own outlet.
1. Stock – especially old/excess stock
- Mark it down and aim to get your money back to either put in the bank/reduce overdraft or to reinvest in more stock of good sellers. Remember the 80/20 % ratio – concentrate on the key 20% of lines that provides 80% of the sales/profit
- Check to see what is/is not selling. You might be surprised how much is/isn’t working for you. Be ruthless and get rid of slow sellers/poor margin performers.
The big supermarkets are superb at this. They know exactly what is making them money – and what is not and then they act quickly. It releases cash and space to be put to better and more profitable use.
2. Staff – redundancies can be costly
If you need to act in this area think more about reducing hours – but without affecting customer services. It’s cheaper and offers you more flexibility. Look into the latest government initiative to help subsidise employing and training new staff.
3. Footfall – Don’t sit back. It won’t improve on its own
- Be proactive – send out promotional activity, for example that you are selling off old stock
- Use your customer database – promote incentives to tempt customers to shop with you
- Shop windows – use them to promote your good points/USP
- Give customers reasons to visit you – don’t just hope they will.
4. Suppliers –
- Renegotiate everything – products, services etc. Everyone is keen to keep you as a customer, so ask “What’s the price now”? Look round elsewhere
- What don’t you need – services/equipment etc? Get rid of what you don’t really need.
5. Review your bank/finances now –
There is money/loans available. If your bank won’t help then talk to Business Link to see if other financial support is available.
6. Premises –
- Spare space – can you sub let/rent it out. Can you close it and save on heating/lighting etc?
- Can you close parts down and save on electricity etc?
- Remember – it’s estimated that rents on retail premises are likely to go down about 10% over the next 12 months – if you need to re-negotiate, now might not be a bad idea.
7. Cash flow –
- Push your commercial customers (especially bigger organisations) to pay quickly Government depts. are aiming for 8 days. Offer others an incentive for quick payments
- Negotiate better payment dates with your suppliers
- Plan cash flow ahead – if there’s likely to be a problem, don’t wait for it to happen – talk to your bank in advance. Cash flow will be critical over the next year.
8. Buy more effectively –
- Prices, discounts, special offers – ask! You just might be surprised. You won’t usually get if you don’t ask
- Link with someone else to increase buying quantities and therefore better prices.
9. Customer base –
- Can you extend it? Age/geographic etc
- Ask for referrals/offer customers incentives to recommend you to others.
10. Prices and price points –
- Are they competitive? Check them out – don’t assume they are
- Shout about your good offers and prices – graphics inshore/shelf edge strip etc – don’t just sit back and assume customers will notice them – they don’t!
11. Customer service levels –
- Shout about the services you offer that your competitors don’t/can’t
- Be proactive – talk to your staff and get their ideas
- Look to see how it can be even better. Training is essential. NEVER assume you’re team is perfect – they’re not!
12. Talk to your customers –
- It’s good service
- Do a bit of research – their likes/dislikes, how they might shop more with you.
13. You’re local Chamber of Trade/Commerce – talk and work together to –
- Improve footfall into town – with events, activities etc
- Give reasons for customers to come to your town/shop
- Be proactive – people still have to shop somewhere
- Continue to promote the very successful website.
14. Think about a loyalty card (for a group of local shops) –
Push, promote and use the info you have. The potential is enormous!
15. Use targets for sales/invoice to costs/expenditure –
Watch it closely so overspending doesn’t sneak up and catch you out.
16. Don’t lose sight of your initial and long term business goals
17. Promote and push your key products –
Those with good back up stock, those that have good margins. Promote the product benefits NOT the product features. Use shop graphics to highlight the key selling points. Make sure the products are in key positions around the store – not at the front – but visible on entry. It also helps with a better customer flow around your shop.
18. Look hard at your shop presentation –
- Are key products in the right area and visible
- Is the shop CONSTANTLY clean and tidy (shoppers will simply shop elsewhere if it isn’t)
- Do you have graphics that spell out ALL the good customer services you offer
- Are all items priced – and are the prices easily visible – especially the good ones
- Your shop front – what are you doing to tempt more customers into your shop – graphics, catching eye displays, promotional offers …. There’s much more to consider
- Are there any areas of training that would help improve your/teams skills in this key area even more?
There is no such thing as a ‘perfect’ shop – it usually can be better, more commercial, more productive. Get the most from the space that you are paying for. Then look again next week.
19. Staff training – it’s NOT an expense, but an investment –
Whether it’s key product knowledge or better selling skills – ALL staff can improve. It’s one of the best investments you can make. You might be surprised. Look round there are lots of initiatives to consider. Talk to Business Link, LSC and colleges NOW. You’ll be surprised what help is available.
20. Sit back and look objectively at the business –
What’s working, what isn’t? Then plan to do something about it. Then DO IT – no-one else will, until that is, the bank manager asks you in for a chat!
Might be too late then.
Despite whatever difficult trading circumstances there are there is always a place for good independent retailers. Make sure you’re one of them.
These are just 20 points to think about – you’ll no doubt have your own. List them out, plan to carry them out and look back in a few months to see if you have!
DEVELOPING AND MANAGING YOUR SHOP WON’T HAPPEN ON IT’S OWN.
It’s down to you! And ONLY you.
Good luck.