Data is where to start. A clear understanding of your business’s current health is essential for successful transformation. This requires a comprehensive look at your business from all angles. Here’s a helpful checklist:
- Up-to-date profit and loss statement
- Current debtors and creditors reports
- Complete list of all business debts (formal and informal)
- Stock listing showing total stock value
- Dead stock listing (items with zero sales in six months or more) and their total value
- Floor map showing the gross profit percentage contribution by product department/category and floorspace allocation
- Total rostered hours per week (including owners, paid or unpaid) and a revenue per hour calculation
- Revenue comparison down to the category level, comparing the most recent six months with the same period a year earlier
Simply wanting to transform isn’t enough. You need to understand your current position and capacity for change. This data will reveal immediate opportunities and the resources available to fund your transformation. This list forms the foundation of any business transformation journey undertaken with clients.
Analyse and act. With this data in hand, it’s recommended to identify some “easy wins” to build momentum and focus. For example, if you have $10,000 or more in paid-for dead stock, get rid of it! The freed-up cash and space will provide a significant boost. To clear this dead stock, create a dedicated clearance area (a table or two will do) and offer a flat 50% discount.
While clearing out dead stock, analyse the remaining data to understand your business’s current performance. Review the comparison report for promising opportunities within your existing product categories. This can be a simple but effective first step.
As you analyse your data, create a list of ideas and action items. You might uncover some overlooked or neglected easy wins.
Choose advisors carefully. Some retailers consider using their accountants or business consultants for business transformation. While they can be valuable, experience suggests that unless they have current, hands-on experience in the retail industry, their advice may not be as effective.
Ultimately, this is your business and your transformation. Taking ownership of the next steps is crucial for ensuring your full investment in the changes you implement.
Now, to get match-fit. This initial phase involves data gathering, streamlining operations, and preparing your business for more significant changes. It’s all about getting your business in peak condition for what lies ahead.
But what if your current data isn’t in good shape, and you’re eager to start making changes immediately?
What is data is limited? If you’re determined to transform your business but your data is lacking, there are steps you can take on the shop floor to initiate change. Often, businesses in this situation have a traditional shop floor layout.
The following advice focuses on disrupting your current setup to encourage a fresh perspective. It’s a radical approach designed to shake things up. Remember, retail is constantly evolving, so continuous adaptation is key.
- Disrupt your layout: If you have a traditional fixture running down the centre of your shop, remove all the stock and the fixture itself. Don’t overthink it – just rip it out! Consider moving key product categories to less expected locations.
- Create a warmer atmosphere: Remove as many traditional retail fixtures as possible and replace them with everyday items like tables, perhaps sourced from secondhand marketplaces. Use a rug or other soft furnishings to add warmth and create a more inviting space.
- Stock unexpected items: Introduce one or two product categories you would never have traditionally stocked. Thinking outside the box can open your eyes to new possibilities and spark ideas for transformation.
This list is just a starting point, designed to get you thinking and acting.
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