CategorySmall retail business management advice

We get it. Sometimes, the road ahead can have so many obstacles and the air is so heavy with fog that a pathway can be hard to find.

In any indie local retail business you can collect a ton of obstacles and feel surrounded by fog if you are drawn to the end is near talk and have your business rooted deep in out of date practices.

If you feel like closing is your only option, we are writing this for you.

Stop. Take a month to first of all breathe. That;’s important, breathe, take in the outdoors. Find a calm. Then, collect data – your sales data, your financial situation information, local economic circumstances. Gather all the facts together, and go over them – not the emotion, the hearsay – stick to the evidence, the facts.

Usually, in the evidence, there is opportunity. The challenge is that often opportunities cannot be seen because of the noise of obstacles and fog. That’s why we say stop, get your evidence and sit with that.

Our hope is that in your evidence there is sufficient opportunity to find a path forward for the business, and for you.

Turning a situation away from closing is my only option can only come about by one or a mix of:

• attracting new shoppers
• getting existing shoppers purchasing more
• making more from some of what you sell
• reducing costs

It’s pretty simple when you read the list. The hard part is the action, that’s where retailers can get stuck. We mean, attracting new shoppers is difficult, especially in small business where the levers we can pull are limited.

The best way to attract new shoppers in any local retail business is to introduce a completely new product category, to represent it well in-store and to pitch it appropriately on social media.

Your existing suppliers won’t have helpful advice in this area because they are your existing suppliers. You have to look outside your current pool of advice and influencers and look outside what people know your shop for. Choose a category that is fun, appealing and for sure traffic-generating. Ideally, it will be something not easily found locally, something that interests you. That last bit is important because one way to drive traffic for a new category is to be a bit of a local expert.

We get that it may be challenging to find the energy and money to make things work with a new category. If the survival of your business matters you’ll find a way.

The best way to get existing shoppers spending more is through a smart loyalty mechanic and having a shop people enjoy.

The best way to make more from what you sell is by charging more or buying better, or both. Don’t go crazy. A modest increase in GP% could work wonders.

Key to the success of any turnaround is starting on the road early, before fog and debris block the past. It’s important to all of us who own businesses to be looking well ahead, over the horizon, cultivating assets we can deploy when we think change may be needed.

Before we leave the topic we want to touch on cutting costs. That’s a common approach to saving a business. While it could help, rarely in our experiences serving many local indie retailers have we seen cutting costs alone be enough to save a business. Sure, it can be in the mix, but it alone is not enough. And the truth is that a well run business has trimmed costs already.

If you think closing your shop is the only option, reach out. There are plenty of indie retailers who will listen, and offer advice if you’d like it.

You are not alone.

Oh, and this all matters to us because we only serve local indie retailers, and we own and run local indie retail businesses ourselves.

We are grateful to work with many people before they buy a retail business. Over the years, we have curated advice for buyers. Recently, we have seen an increase in acquisitions. here’s our fresh advice:

Local retail businesses  are appealing, and, looking out in the market, there are some excellent opportunities.

A common question we are asked by people who find me through this blog is what should I ask for when looking at buying a shop?

The question itself, when asked, indicates how green a prospective purchaser is when it comes to purchasing a business. Our first advice is that they better understand the retail business of today, to understand what they could be buying into.

Here is an updated list of data we suggest prospective local retail business purchasers access from the vendor or their representative:

1. P&L from the accountant for the last two years. i.e. not a spreadsheet created for the purpose.
2. A list of add-backs used to achieve a profit figure on which the asking price is based.
3. Tax returns for the same two years. While note always appropriate given business structures, they can provide a cross check with the accountant P&L.
4. Sales data reports, for the last two years, from the POS software in use – to verify the income claim. This source data is key.
5. Sales data reports from the other sources to verify the income claim.
6. BAS forms to confirm data in the P&L.
7. A list of all inventory in the business including the purchase price and date last sold for each item. And, copies of invoices from which you can randomly select to verify.
8. A copy of the shop lease.
9. A copy of any leases the vendor expects you to take on board.
10. A list of all forward orders placed on behalf of the business.
11. A list of all employees: name, hourly rate, nature of employment, start date, accrued leave and accrued long service leave.

This is good basic information, a starting point, which will enable any purchaser to undertake reasonable assessment of a business.

Our advice to retailers looking to sell who may be concerned about this list is: think about it now and focus on your business so the data we have listed looks good. The time to prepare your shop for sale is every day you are in the business.

This is why we say every day is your pay day. Run a smart, lean and profit focused business and you will have a good pay day today and a good one when you come to sell.

The most appealing businesses are those that are easier to run and are making money.

Sure a purchaser can turn a business around. They should get the rewards if they are expected to do that for your business.

The price you can sell your business for will be based on what it is making now.

We are grateful here at Tower Systems to work with many different retailers in many different settings. Over the years, our experience has evolved. Add two this our own experience running our own shops for more than 26 years and we are resourced and able to offer insights and advice on local retail business management.

I hate going into work. As a friend of ours said these words we knew they had far more weight than if they had been said by an employee. Our friend owned the retail store to which they were referring. He hated going into his own retail business. They had fallen out of love with what they had created and the bitterness they felt towards their business had soured to hatred.

Why do some retailers hate going to work? It is an interesting question which needs exploration before we look at strategies for countering this.

There is usually a trigger – tough economic conditions, personal challenges away from the business, a partner dispute, tiredness… there could be any combination of reasons.  Sometimes, I have seen a reason quite a distance from the business itself.

If you own a retail store and you have reached the point where you hate going into work each day it is important to take time away from the business for an honest assessment as to why you hate the business. Until you can answer the question – why do you hate going into work? – you cannot begin to work on resolution.

Once you know the reasons you hate going to work, think about a series of small and achievable steps you could take to turn the situation around.

No matter how challenging the situation, there are always steps you could take. Focus on these, start work on them and in some instances that alone will be enough to move you through the fog of anger and ill-feeling toward the business.

Breaking a big problem down into small steps makes it feel manageable.

If finding small steps to take does not work, get together with a trusted friend and tell them how you feel toward the business. Ask them to talk with you about the business. Reminisce about why you started or purchased the business. Remember your dreams and hopes. Use the conversation to explore your emotion at the moment you decided to open or purchase the retail business.

If you have the funds, substitute your friend with a psychologist or professionally qualified counsellor to explore your feelings for the business.

We are not suggesting a business coach or mentor here because the ill-feeling toward the business is more often personal and is better dealt with by those with skills on working with feelings.

Understanding your hatred for your retail business is the first step. This will usually, of itself, reveal the first steps you can take to turn the hatred around. Be open to that. Take small steps and see where they lead. The change in feeling toward the business may not be immediate so do not expect too much too soon.

Some retailers we have worked with have felt ashamed of their hatred for their business. The best and toughest analogy we heard was that it was like hating your own child.

A retail store, especially one you created on your own, is like a child. There is no shame to be had in this feeling. So many factors can come into play to get one to this point.

By getting help to understand your feelings and using the understanding which flows from this to develop a strategy you can expect to start to feel better – even if the strategy involves you exiting that business.

If you do nothing, the hatred will be more and more reflected in the business and in your own person. Neither benefits from this.

Banks, and small business lenders, are vitally important for any retail business from day to day trading through to long term funding. A healthy relationship with your bank or lender will be vitally important to keeping the retail business healthy.

Maintaining a good banking relationship can be a challenge for retailers. It takes attention to detail and hard work. Retailers can be often sidetracked in their business days and not remember to take of the banking relationship.

Here are 7 tips which can lead to a better banking / lender relationship and thereby provide the business with protection against damage to the relationship.

1. Be on time, every time. With trading figures, annual accounts and any other regular reports that you bank requires you to provide. Being on time will win a tick from them and ensure that you are not on their businesses to watch and be concerned about radar.
2. Send them your newsletter. If you have a customer newsletter, put your bank manager on the list. Treat them like a customer and through this help drive a better connection between their business and yours. Newsletters go on your file and give local branch employees something to show off if they are talking to more senior people in the bank about businesses they like.
3. Ask for regular meetings. You set the agenda for briefing sessions where you let the bank know how business is going and how you are leveraging your relationship with them. Even informal meetings are reflected in internal banking reports and these can strengthen your position with the bank.
4. Recommend the bank. If the bank is serving you well and you are happy, recommend them to others. Be honest in your recommendation, let your friends know why you like this bank and what they have done for you. Let the bank know when you do this as it helps them see you and your business in a broader light.
5. Invite bank employees in. If you are holding a sales or some other event, invite bank employees to participate. They could be good customers. They will also appreciate seeing the business first hand.
6. Be regular. Banks appreciate regularity – with deposits and with payments.  Try and maintain a regular pattern in your business transactions.
7. Write, update and follow a business plan. This should be point #1.  A well thought out and up to date business plan demonstrates how serious you are about your business.  Having this for bank review meetings will encourage them to treat you more seriously than retail businesses without a plan.

Treat the banking relationship as personal and one which needs to be nurtured each week. The better your communication the better the relationship. Be sure to set time aside for this in your work schedule and to include the bank wherever possible and practical.

The business outcome is flexibility when you need it and access for free advice at times of important business decisions.

Good banks appreciate good relationships with their retailer customers. You will find that they invest more time in businesses which invest time in them.

Here at Tower Systems while we are a POS software company, our advice and help for local small business retailers often reaches beyond what is traditional.

The retiree (or seniors) marketplace can be lucrative for many different types of retail stores. They tend to be loyal and engaged in word of mouth marketing about good retail experiences. They can also be flexible about when they shop and this is where a retail business can really leverage the opportunity. They also network, leading to valuable word of mouth

Before you can market any retiree service or benefit you need to develop a plan for handling the opportunity. What products will be offered and at what special prices? The most common approach is to offer a flat discount to retirees, or seniors as they are called in some marketplaces. This discount is usually between 5% and 10%.

Price is important to the seniors marketplace since they either have a fixed income or are living off finite savings.  They like businesses which help them save money.

You will also need to decide when the discount or other offer is available. Some businesses make the offer available only on certain days, usually the quietest days of the week. Others offer access to the benefits all the time. Think carefully about the needs of the business before deciding when you will provide access to the benefits – focus on the business outcome you want to achieve.

In terms of accessing the benefit, it is common and fair to ask for some form of proof of eligibility. This could be in the form of a drivers license or a seniors card as is available in some locations.  This is a card usually issues by local government.  Sometimes, it is issued by residences.

An alternative is to create your own retiree / seniors card for use in promoting the business. These should be professionally designed and produced. Ensure that such a card is respectful and something these customers would proudly carry. Design the card so that it promotes the benefits you offer – so that it is an extension of your marketing program.

Whatever method you use to identify your retiree customers, it has to be simple to use at the counter for processing the appropriate discount.

To market a business to retirees consider these options:

1. Train employees to offer the discount or other benefits to someone who looks eligible. While this could cause embarrassment, it could also extend the word of mouth around the offer.
2. Promote to retirement villages in the local area.
3. Advise local government authorities that you offer a benefit to retirees.
4. Contact local clubs and organisations likely to connect with retirees.
5. Promote the benefits in-store and in your business newsletter. You want to spread your offer as far and wide as possible, so that retirees beat a path to your door.
6. Visit local retirement residences and offer assistance.
7. Advertise in trailer parks.
8. Look up clubs the Internet – there are plenty of groups, clubs and forums for older folks travelling around. They share tips about places they like.

The value of the retiree market to your retail store will depend on the value of the offer available to them and how widely you promote this. While some retailers see retirees as a chore others see a business opportunity.

Winners are grinners as they say. Shoppers who win from a retail store are happy and they tell their friends. Whether it is a large or small prize, the value to the business of making winners of customers can be considerable.

The best competitions are those where a customer of the retail store is guaranteed to win. That is, there the competition is store specific. While participating in larger national and state wide competitions around products brands and even franchise brands can be good for business, it is the local competitions which provide the best opportunity for local promotion.

Here are some tips on how to use competitions effectively to promote your retail store:

Every competition needs a focus. Promote a specific product or product category or a certain level of spending. Competitions open to anyone without a tactical focus are likely to be less successful.

Make entering easy for everyone. Ensure that the mechanics of the competition – how to enter – are easy and understood. You don’t want to slow down the sales counter or have customers reject entering the competition because of complexity.

Promote well. Promote the competition well in the business from the front window throughout the store.

Encourage participation. Get all employees actively promoting the competition. Offer a reward for the employee who achieves the most entries per hour worked.

Drive impulse purchases. A good competition is one used to drive impulse purchases at the counter. They key here is that the item being sold, the trigger for a competition entry, must be easily understood.

Show off the prize. If possible, show the prize of offer for the competition. This can drive people to engage in the behaviour you are promoting as they more easily understand the opportunity.

Show off entries. If entry in the competition requires shopper activity like drawing or coloring, show off the entries as this will drive more traffic to the store.

Promote winners. Take photos of competition winners, with their permission, and use these in newsletters and on a winners board in-store. This is how you can promote the store as a place where winners shop.

Host and event around the prize draw. Make the drawing of the winner a special event with its own retail hooks to drive sales.

Create a competition calendar. This can provide focus to the competition program throughout the year and ensure that they are a consistent part of the marketing mix.

Engage with suppliers. Call of key suppliers to support the business with prizes for your competitions. This is more easily achieved if the competition connects with specific brands.

Promote externally. Use the competition to promote the business externals in advertising and promotional flyers.

Competitions, regardless of size, can drive excellent results for a retail store. Professional execution is the key from the planning stand right through to the drawing of the winner. Ensure that everyone involved including customers have fun with each competition you run.

Shopping ought to be enjoyable and, preferably, fun. Often, it is the experience itself which separates one retail store from another. This is why every retail business needs to devote management and front line attention to delivering a memorable and enjoyable experience.

One way to provide a memorable shopping experience is to have authentic and in the moment fun – among the sales team and with customers. Here are seven tips for having fun in any retail store:

1. Theme days. Embrace an era which with interest your customers. For example, the 1970s. Dress the store and employees in keeping with the 1970s. Have a couple of items on sale at 1970s prices – to connect the theme with a commercial outcome. Get some stories from the 1970s related to products you sell and place these on display boards in the window. Consider a competition for the customer in the best 1970s costume.
2. Other theme days include: school days, foreign country days where you wear traditional dress from a foreign country, crazy hair day and, of course, more theme days around key decades.
3. Local sports competition. Fully embrace any major local sporting event, choose a team, dress in their colours and dress the store in their colours. Be unashamedly parochial and show your customers your local support.
4. In-store buskers. Find some local musicians you enjoy and who have a repertoire which would connect with your customers and invite them in to play live for your customers. This would bring a vibrancy to the store and provide welcome entertainment for your customers as they shop. The local performers get to reach a new audience and you get to change up the feel of your business.
5. Repurposing day. Host an event where customers compete for a prize for the most innovative repurposing of a product you sell. The idea would be that they take something you sell and demonstrate a use for it in a way which is completely different to what the manufacturer expected. There would need to be a rule that the new use is genuinely useful.
6. The cutest baby. Invite your customers to bring in a photo of whey they were a baby, the older the better. Stick the photos on a wall and take votes on the best. You could change this up with two photos: as a baby and today and get customers to connect the two. Family members will come in to look at the photos and vote. A local store could get a real buzz with a promotion like this. While there is no obvious direct sales imperative, the traffic and word of mouth should drive good business.
7. Stand up comedy in store. Invite local comedians to try out their stand up routines with your customers. While you would need to be careful about content, such an event would show the store supporting local artists and it could bring some fun to quiet retail times.
8. Crazy tie day. While this has been done before plenty of times, you could kick it up with an amazing tie display – collect these from local Goodwill stores, invite customers to donate. As with the theme days idea, interact with customers and offer a prize for the best / worst.

These seven ideas are the tip of the iceberg for in-store promotions. They are designed to kick start your own thinking, to pursue what its right for your specific type of retail business.

The key here is to give everyone who works in the shop permission to have fun, and nurture fun.

Retail is very much about the shopping experience. While good customer service and a friendly shopping experience are vital, sometimes it is the wonderful unexpected experience which can get people talking about a business.

Be bold and have fun.

Selling is the lifeblood of retail, especially local small business retail.

It takes skill, stamina and creativity yet it is often treated as one of the lowest roles in an organization. Smart retailers help their sales staff improve their skills to better serve the business and its customers.

Some salespeople are naturals while others work hard to learn the skills. Everyone, no matter how experienced can improve. Take a moment to consider these five steps to better selling.

1. Be in the moment. Focus on the customer in front of you, listen and respond to their needs. Genuinely care, don’t just act like you care. The personal connection they feel from and with you is more likely to bring them back into the store than almost anything else including product and price. If you are not comfortable with developing such a personal connection then maybe retail is not for you.
2. Understand what you sell. Knowledge is king, even more so in retail. By knowing everything there is to know about the products you sell you make yourself more valuable to the business and to its customers. Good employees spend personal time learning about the products and how they are of value to their customers.
3. Enjoy yourself. Smiles and laughter are infectious. If you are happy your customers are more likely to be happy. Happy customers are more relaxed about spending money. But don’t fake it as fakes can be spotted. Know what makes you happy about your job and embrace this. Never be afraid to bring i bit of your personal self to the shop floor or the sales counter.
4. Know when to be quiet. Some shoppers like to be told what to buy but most prefer to make their own choices. It is important to spot the difference and know when to leave a shopper to make their own decision. Provide the information important to the decision but leave them space to make the decision for themselves.
5. Selling is a service. Too often, especially in busy retail environments, selling is seen as production line work. If this is how it is treated then the experience will be less personal and memorable for the shopper. If you treat it as a service and understand that service does matter, you focus on the service as the point of difference. This change in mindset alone can lead to considerable change in a retail business.

So how to these steps increase retail sales? It all comes down to the service delivered being better than elsewhere: more personal, friendlier, more knowledgeable and genuine. Combined, these attributes make for a unique shopping experience in today’s cookie-cutter obsessed retail world.

Retail employees who see retail as a career will do well for their businesses and for their careers by embracing these steps.

Here at Tower Systems we are grateful to our thousands of local specialty retail business owners for their insights, advice and support. This community will our well of knowledge, they enable us to share this with others, like we do here in this place.

Today, let’s talk about the shop window. It’s a vital business asset as it works 24/7. It pitches your business to people often who have never shopped your shop.

Get it right, and your shop window can provide an excellent financial return for a modest investment.

The window of any retail business can tell how serious the business is about business. If it does not regularly (at least weekly) change, has old stock, is dusty or dirty, is covered in signs or presents mixed messages then the business most likely is not doing do hot.

Look at the most successful retail businesses, they have a window strategy. From national groups to independents, successful retailers understand the importance of the window in the overall marketing plan.

As prime retail real estate, the window is a place to be respected, obsessed about and wholeheartedly embraced. Consider these ideas for developing a window strategy:

See your window how others see it. Step outside your business and cross the mall or the street and look at the front of your shop. Spend a while doing this. Go back again if you are not sure what you see.

Look at other windows. If you have competitors nearby, check out their windows. If you have retail businesses you admire, look at their windows too.

Develop a window calendar. Decide on themes for window displays, set dates when new displays are to be installed. Engage all team members in deciding on the display calendar. Be sure to cover off the major seasons for the business. Be sure to balance window time to all product categories in the business. Be sure to build opportunities into the calendar for community engagement – the window is a terrific place for community groups to show off and bring their contacts to your business.

Be single minded. Each window display should have a single message. This ensures greater impact and provides a better opportunity for success.

Strip it back. Retail business windows often have unnecessary items which have been added over time. Strip as many of these back as possible. Leave the maximum space for your themed displays.

Learn how to create stunning displays. Consider sending employees to a visual merchandising course to learn how to create displays. Alternatively, bring in a visual merchandiser to create the displays for you.

Be prepared to do it over. If a window display does not present the business well or reflect your point of difference – from across the street or across the mall – do it over.

Remember what window displays are for. Then window display is for your customers and would-be customers, to get them to visit and buy from you. If a display does not do this then it has failed.

A good window display will drive traffic and sales. The impact will be felt almost immediately. Be brutal in your assessment of success. It is business after all. The business needs a return on investment from this most valuable retail real estate.

A great window display can reinvigorate a retail business and help everyone involved love the business a little bit more.

Now, if you are motivated to change your window – do it yourself, from scratch. Anyone can. No experience necessary!

Across a range of specialty retail channels, Tower Systems is grateful to serve thousands of retailers. Years of doing this, collaborating with them, has helped us developed a deep well of experience and knowledge, which we happily share.

The retail sales counter is premium space in a retail business. Too often, however, the counter is cluttered with products placed there in pursuit of impulse purchases or because there is nowhere else in the store for them.

In some retail settings, the counter itself is redundant. Think about that, because if a counter in your business is redundant, having one makes no sense.

but, back to the topic at hand – making the counter more successful for you.

A cluttered counter mentality often starts with one item which works so retailers add more and more until the counter is a mess of colour and small displays.

Representatives of suppliers pressure retailers to take offers, structuring deals to make counter placement compelling.

The result is a mess of color which rarely changes and is poorly managed in terms of return on space.

A good retail counter is a profitable retail counter in terms of the value of impulse purchases achieved.

At a good retail counter, less is more. By creating better displays without products competing for attention, the featured products have a better opportunity of performing.

Here are some tips to un-cluttering a retail sales counter which have worked in many different businesses.

1. After the business is closed on a day, take all products off and clean the counter – completely off so that the counter is bare. Yes, this is hard work.  But you get to rebuild the counter you want.
2. Rebuild the counter story one product at a time. Consider the product from the customer’s perspective – is it something they are likely to purchase on impulse? Is the product understood? Is the price point attractive? Can they easily access the product?
3. Create zones for promotional purposes. Having zones and clear space around them sets rules which are easier for all team members to follow. Depending on the store, you may have items which children will like more at their level and products aimed at adults at a higher level.
4. In choosing counter products, consider what will be on the minds of customers as they transact their sale. Are there products which add-on nicely to popular products you sell? Are their guilty-pleasure products which they can enjoy while shopping – like premium candy? Do you have small gift items which work in a variety of situations? Do you have gift items which people would be happy to pick up as a gift for a friend?
5. Once the counter is rebuilt, step back and look at this from the perspective of a customer. Are the offers compelling, understood and valuable? Look at the counter from multiple points in the shop from the perspective of the counter being a marketing opportunity and not just a work desk. Are there items which could be removed?  Sometimes, less is more.
6. Change key counter offers at least weekly – more often if your customers visit multiple times in a week. This helps fight against customer and employee store blindness.

By having fewer products at the counter and being more strategic in product placement and display, the products have a better opportunity of being noticed and purchased.

Where many retailers rely on an over the counter sales pitch to achieve the impulse purchase, smart retailers configure their counters to do the up-selling for them. This gives customers ownership of the purchase.

By tracking the success of counter offers you are able to build a good database of what works and what does not work. This can guide future counter placement decisions.

The sales counter is too valuable in any retail business to allow it to grow organically. Take time to manage it and expect good results.

We are grateful to serve thousands off local small business retailers across a diverse group of specialty retail settings. Our work over many years has helped us develop insights that we willing share with local small business retailers. beyond our POS software, we actively support local retailers in myriad ways.

Today, let’s reflect on the bonus, the unexpected.

It is a good rule in business to always give your customers more than they expect.  It shows you value them, go the extra mile and delight in surprising them with good news and good opportunities.

The best way to demonstrate delivering unexpected value is to provide it here in the form of three special reports beyond the scope of what was planned and offered or RETAIL RESCUE.

Before we get to the bonus reports, consider these ideas for adding expected value to customer transactions your retail business:

• Give the customer a small gift, something completely unexpected. Even something as simple as a chocolate can be the perfect thank you.
• Package the purchase in a premium reusable shopping bag. This promotes the business and shows that you do value them.
• Provide a voucher offering a discount if the customer returns in a specified period of time.
• Depending on the nature of your store, give free gift which relates to items you sell. For example, if they buy a men’s suit, offer a free tie or if they buy six cup cakes, give them the seventh for free.
• Connect with another business and offer a gift which is a free item or a discount from their store – they could do the same for your store.

The key to giving bonus rewards like these is to not promote it.  As Nike says, JUST DO IT!

By offering added value at the counter at the end of a sale it comes across as if you are doing something special for this customer.  This will make the gift more valuable than if it is widely promoted.

Giving your customers better value or a better experience than expected will be remembered and talked about.  It will build your business.