Tips for managing your cash flow

Bintesh Amin has learned a great deal about retailing in the almost two years that he has owned his 5,500 square feet Budgens store in Whitstable.

One of the biggest eye openers has been the large stock investment and the need to manage cash flow.

His first Christmas as a Budgens retailer made him very aware of the significant increase in stock cost, and he was determined to improve his cashflow last month. A key change was to look at every category and maximise the space for products his customers were most likely to buy.

The most obvious and successful merchandising adjustment was undertaken with his magazine range. Binny investigated the profit of every magazine title stocked in December 2012 and found that sales dipped in the final two weeks prior to Christmas. Taking a radical approach, he reduced his magazine range to just the very top sellers, and used the extra space created to display seasonal confectionery lines in bulk.

The magazines that were removed from sale were returned to the wholesaler for an instant cashflow benefit. The confectionery stock that was displayed had previously been help in the stockroom and sold through in a couple of days, also having a positive effect on cashflow. Focusing on these details helped Binny and his team deliver an awesome Christmas trading performance.


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