If you’re already open and your business is not where you thought it would be, you might need an outside point of view to identify the trouble spots and possible solutions.
We start with a broad discussion of your business:
- product categories
- customer acquisition strategies
- market position
- general operations
and other generalities. We’ll check the common issues and then drill down the detail. We’ll need an overview of your financials. We’ll want to monitor operations for a shift–watch how the crew interacts with customers, monitor customer shopping patterns, and pick out the details that might conceal some tell-tale signs.
Preparing a few documents ahead of time can make that part easier. You’ll need a cash-flow statement, a balance sheet, and an income statement. Putting them together might offer you some insights into your business. If so, great! You might not need help after all. If not, let us get you back on track.
Some Basics, For Free
Some problems are more common than others.
The most common problem is starting without enough money.
It’s also pretty easy to identify. If you opened a store with $6,000 a month in fixed costs and only have $5,000 in the bank, you’ll know where the problem lies. You also can’t easily fix it. It’s major bad news.
Indiscriminate spending is another common issue.
I noticed one store that had extra people scheduled every hour the store was opened. The owner was there six days a week and he had other people scheduled because he was reluctant to cut the hours of his friends. His sales volume didn’t justify the labor expenditure. That’s an easier fix.
Across-the-board discounting is a cash killer.
I’ve mentioned it in my column, but the basics are this: a discount is a steep cash incentive to get sales. Unless you advertise the discount properly and use it to gain new customers, you’re simply giving away money to people who would have bought from you anyway. You can offer limited-time sales and use price to your advantage. You have to make money somewhere, though.
Retail Store Self-Appraisal
- 1. Do you have cash equal to 2 months fixed expenses in the bank at all times?
2. Can your business survive your absence for two weeks?
3. Do you know what’s selling for you (not guessing based on what you remember ringing up)?
4. Are your sales not only better than last year but better than last year plus inflation, plus your rent escalation?
5. Does your inventory level follow your commands? In other words, does it stay steady, or grow or shrink at your decision?
6. Is your cash flow positive?
7. Are you working a number of hours you’re comfortable with?
8. Are you gaining new customers through social media like Facebook, Twitter, and Meetup?
9. Are you taking a paycheck at least equal to what you could pay a manager?
10. Could you spot fraud or ongoing theft in your store?
How many did you say “Yes” to?
10 Great! You’re an example for all of us.
7-9 Good job.
3-6 You might want a review to brush up on some things. Your business could be at risk.
1-4 Call Lloydwrites today for troubleshooting!