by Jim Martin
By Bob Nelson, President, Power Retailing, www.retailing.com
The purpose of any business is to win customers, which requires marketing. If your cash registers don’t ring, you had better find out what fast. In today’s competitive retail world getting results is what counts. Successful retailers aren’t more talented or intelligent than you are, they simply have learned to do things in a different way. Use the following steps to improve your retail sales, simplify your efforts, multiply profits and increase the odds of success.
Know Yourself. Having your own business is more than just creating a job for yourself. You have roles in marketing, finance and administration, including personnel. It is rare for one person to play all these roles equally well. You must know which parts you can handle yourself and which parts you’re going to need help with.
Plan Ahead. Many stores are run by well-intended people who simply lack the information they need to do their job, such as a clear idea of market segment, target markets, customer service, product selection, marketing mix, promotional activities and pricing tactics. To succeed you need a good business plan that helps you make the right decisions.
Know the Industry. You can gain great competitive edge if you have an intimate knowledge of your business. Most businesses fail because their owners lack industry knowledge, lack vision, use poor market strategies, fail to establish goals or have inadequate capitalization. Industry understanding can lead to strength in all these areas.
Understand Your Customer. If you give your customers what they want, they will want to buy from you. The products and services you provide should reflect your customers’ needs. Think in your customers’ terms: buy, show, sell and say things that interest them, not just what interests you. After all, it is the customer who determines whether or not you succeed.
Keep Good Financial Records. If you don’t know where your money is going, it will soon be gone. The “game of business” is played with computers; and, the score is evaluated in dollars and cents. Good financial records are like the instruments on an airplane, they alert you to your height, direction, and speed. Without them you’re flying blind with no controls to guide you to your destination.
Manage Your Cash. No matter how unique your store is, your business can’t survive without cash flow. Money coming into your store is what keeps you financially healthy. If you budget wisely and know the timing of your monthly income and expenses, you won’t have to worry about running out of money.
Use Sound Management Practices. As a store owner, you are also a manager. You have to make decisions, offer customer service, manage time and resources and know how to merchandise and run the business better than anyone working for you. Pass your knowledge down. Give your employees the opportunity for growth, treat them fairly, pay them what they’re worth and they will help make your business successful.
Develop a Distinctive Image. Your image is an important factor in your marketing efforts. Customers create their perceptions of your business from your name, web site appearance, store location, products, prices, visual merchandising, signs, displays, business cards, newsletters, advertising material, customer service and anything else that relates to your business. If these are vivid and business-like, you create a strong image among them.
Control Your Inventory. All retail stores need to manage inventory. Inventory represents a large part of your investment sitting on a shelf. The retailer who merely watches the store’s shelves can’t maintain a proper balance between the right amount of merchandise and probable customer demand. Slow-moving inventory is costly, but gaps in inventory send customers to your competitors. Turn-over analysis is critical.
Buy and Price For Profit. To understand retailing, one must start with the concept that the price of your merchandise is nothing more than an estimate of what the customer is willing to pay. A practical pricing strategy should be based on the law of supply and demand. To be more competitive join buying groups and seek out manufacturer discounts that allow you to purchase merchandise below wholesale prices. Offering better values will attract more customers to your store.
Learn From The Pros. In today’s explosive markets, making the right moves is absolutely essential. There is little room for error. Navigating through these fast-moving times can be a tricky and even a self-destructive experience. Because of the emotional and often difficult decisions that must be made, you need fresh ideas with an impartial business position. Watching what more experienced retailers do can provide that insight.
Ask For Help When You Need It. Getting results is what counts. Don’t be too proud to ask for help. Recognize that what you don’t know can cost you money, hurt your odds of success and greatly reduce your chance of achieving your business goals. Hiring an expert with specialized skills can be a profitable way to protect both your business and financial future. You should also consider the free mentoring service of SCORE. SCORE experts can bring years of experience to your business.