There was a time, when businesses sold for a good multiple of net earnings, that small store owners could rely on selling their business for a handsome increase on the price they paid – thereby providing themselves with a good pay day.
No more. Today, the best way to extract value from your businesses is to make every day your payday, not wait for it to arrive when you sell your business.
The challenge is how do you do this?
Retailers need to look at their businesses differently. This starts with the mind-set of every day being your payday. Each decision needs to be considered in this context.
Focusing on profit today will give you a better result and make your business more valuable tomorrow. Here are some suggestions for making every day your pay day:
- Run with the leanest roster possible. Just about every retail business I review has the capacity to lower labour costs.
- Have your best people working the floor, helping customers spend more.
- Have stunning displays that attract people from outside the shop.
- Have compelling displays in-store that encourage people to browse beyond their destination purchase.
- Always have impulse offers at high traffic locations.
- Charge more every time you can. Loyalty programs such as discount vouchers, bundling into hampers, multi-buys such as 3-for-2 and other opportunities enable you to do this by blocking price comparisons.
- Buy as best you can.
- Grab settlement discounts every time you are able.
- Promote outside your store using online and social media opportunities.
- Leverage adjacency information. Chase a deeper basket – people purchasing more each visit.
Be responsible for the profitability of your business. Don’t blame your suppliers, your landlord, your employees or some other external factor. It all comes down to you – the decisions you make and the actions you take.
Doing all this relies on you measuring the performance of your business. Your store EPoS software should help with this. It is important to learn how to make the most of what your data can tell you.
If you relentlessly pursue to increase your profit with a clear focus you are likely to see profits grow. That’s better than waiting to make money when you sell because that’s less likely to happen in this market.