Question: I am a startup retailer, what do I need to know to be a success, i.e., make a profit and stay in business.
Answer: Bob Nelson, President of Power Retailing, has 12 tips that should help you in managing and growing your retail business.
The purpose of your business is to bring in customers, and you accomplish this through marketing. If sales aren’t meeting your expectations, you need to quickly identify what’s wrong. Successful retailers aren’t any more talented or intelligent than you are, they’ve simply learned to do things in a different way and make money in the process. By using the following 12 steps to improve your retail sales, you’ll simplify your efforts, multiply profits, and increase the odds of success.
1. Know Yourself: Your basic business roles are in marketing, finance, and administration including personnel. For best results, it’s rare that one person can play all these roles equally well. It’s best to identify which parts you can handle and which parts you’re going to need help with.
2. Plan Ahead: To be successful, you need a clear idea of market segmentation, target markets, customer service, product selection, marketing mix, promotional activities and pricing tactics. A well thought out business plan will help you make the right decisions.
3. Know the Industry: You can gain the greatest competitive edge if you have an intimate knowledge of your business. To thrive and prosper you must be committed to learning and to have the desire and energy to accomplish your goals. Below are five main reasons why most business fail:
Lack of Industry
Knowledge Lack of Vision
Poor Market Strategy
Failure to Establish Goals
4. Understand Your Customer
The products and services you provide should reflect your customers’ needs and wants. Give them what they want, and they will buy from you. Think in your customers’ terms; buy, show, sell and say things that interest them, not just what interests you. Remember, it’s the customer that determines whether or not you succeed.
5. Keep Good Financial Records
Know where your money is going, or it may soon be gone. Good financial records are like plane instruments; they alert you to height, direction, and speed. Without them, you’re flying blind with no controls to guide you to your destination.
6. Manage Your Cash
No matter how unique and wonderful your store, your business can’t survive without cash flow. Money coming in is a vital component to staying financially healthy. If you budget wisely and know the interval of your monthly income and expenses, you won’t have to worry about running out of money.
7. Use Sound Management Practices
A store owner is also a manager whose duties include making decisions, offering customer service, managing time and resources, knowing how to merchandise and run the business profitably. Give your employees the opportunity for growth, treat them fairly, pay them what they’re worth and they’ll support you in making your business success.
8. Develop a Distinctive Image
Your image is an important function of your marketing efforts and materials. Customers create their perception of your business from your name, website appearance, store location, products, prices, visual merchandising, signs, displays, business cards, newsletters, advertising material, customer service, and anything else that relates to your business.
9. Control Your Inventory
Inventory management is crucial. Inventory is your money sitting on a shelf. Without adequate control, slow-moving inventory becomes dated and very costly.
10. Buy and Price for Profit
To understand retailing, start with the concept that price is nothing more than a temporary estimate of what the customer is willing to spend. To devise an overall pricing strategy, a practical approach can be based on the function of supply and demand. Join buying groups and seek out manufacturer discounts that allow you to purchase merchandise below wholesale prices. Offering better prices attracts more customers and offers more opportunities to shop at your store.
11. Learn from the Pros
Today’s fast moving markets require making the right moves as an absolute essential. Knowing how to navigate them is crucial since there is little room for error. Having fresh ideas with an impartial business position can help avoid making errors due to emotional or difficult decisions.
12. Ask for Help When You Need It
Results are what count – don’t be too proud to ask for help. Recognize what you don’t know, so it doesn’t wind up costing you money, hurting your odds of success, and greatly reducing the achievement of your business goals. Hiring an expert with specialized skills can be the most profitable decision you can make to protect both your business and financial future.
Sourced from an article by Bob Nelson, President, Power Retailing