This is advice we first shared many years ago. We have updated it, made it more 2022 and beyond relevant.
Not wanting to be too proud, we think this is the best advice we could give any local small business retailer as it focuses you on what matters most – nurturing daily value from your business for today, and for when you decide to sell the business.
Everyday in local retail it can feel challenging, busy, attention distracting and demanding. Local small business retail is tough, competitive and consuming.
Our advice for local small business retailers in this article is practice, everyday, straightforward. It is advice any local small business retailer could follow without needing a business degree, bags of spare capital or a huge team to manage execution in-store.
This is fundamental advice, code advice. It’s like getting out of bed in the morning, showering, brushing your teeth, getting dressed. this advice is as basic and fundamental as eating and treating. And, while that sounds dramatic, it is what it is, good advice that every local small business retailer could benefit from.
So, here it is:
Retail business advice: make every day your pay day.
There was a time when small business retailers could rely on selling their business for a handsome increase on the price they paid thereby providing a good pay day, when businesses sold for a good multiple of net earnings. This was a time when retailers would focus on the sale of their business being their payday.
No more. Today, the best way to extract value from local retail businesses is to make every day your pay day, to not rely on your pay day being the day you sell the business.
By this we mean make the most you can today, so that tomorrow is valuable. It’s a small target approach. A narrow approach. That’s at the heart of this … that today is what matters most to you today. In every decision, every action. It’s why this is about making every day you payday. because it is an every day thing. Like we said at the start, like eating and breathing.
The challenge is how do you do this?
It starts with the mindset of every day being your pay day. Every decision needs to be considered in this context.
Here are some suggestions for making every day your pay day:
- Find new customers. New customers are the future lifeblood of any retail business. if you are not attracting new shoppers, you are treading water. Every day there should be an action designed to reach people who do not currently shop with you. It could be a social media post, a stunning front window display or engagement with a local event. Do something, have it planned as part of a regular action. Always, every day, chase new customers.
- Charge more every time you can. Look at what you see and your approach to mark-up. Consider why people buy from you, and not somewhere else. If there is a factor, such as convenience, that enables you to charge a little more. Considering what you charge is not a blanket approach, not something you rush at. Take your time. Look at part of the business in fine detail and consider whether a small increase could help you achieve more. Also, loyalty programs such as discount vouchers, bundling into hampers, multi buys such as 2 for 3 and other opportunities enable you to do this by blocking price comparison. You can stop price being a consideration.
- Get people buying more each visit. What you place with what can encourage people to buy more than what they intended. Unpacking and pricing new goods on the shop floor can get people noticing and buying things they did not visit today to buy. Look in your data at what sells with what. Often that can reveal opportunities. Too often, retailers think placing things at the counter drives a deeper basket and while it does, there are other things you can do in-store to drive this.
- Run with the leanest roster possible. Just about every retail business we review has capacity to lower labour costs. Trimming the roster can come at a cost for the owners – putting in more hours. There are other ways to enable trimming the roster. Be smarter. If there are things you can cost-effectively automate, do that. If you can adjust opening hours to better fit when sales occur, and same some labour costs, do that. If you can save an hour a day with owner time on the shop floor, do that.
- Stock what sells. This may sound obvious, because it is. But, in many retail businesses we look at, they do not stock what sells. Analyse your business data. Know not only the products that sells, but the types of products. If you think something is a success, go to the evidence to see if it is. Too often we can’t find evidence supporting a feeling that something is successful. Your data can guide your buying so that you stock more of what sells.
- Bring people back sooner with a thoughtfully calibrated loyalty offer that funds itself, and drives value. Every retail business needs a core action designed to bring people back. A timed loyalty offer, which expires, is a good way to do this.
- Have your best people working the floor, helping customers spend more. Today, retail is not about may I help you. Rather, it is about engaging with the products and subtly showing them off, like theatre.
- Have stunning displays that attract people from outside the shop. Stunning displays are the unexpected, the must-see, the magnets that people notice and stop. Anyone can create these. It starts with thinking about what could be unexpected and then being bold with that seed of an idea.
- Have compelling displays in-store that encourage people to browse beyond their destination purchase. In-store displays need to be about showing people what they can engage with. these displays are for people to see themselves or those they are buying for.
- Always have impulse offers at high traffic locations.
- Buy as best you can. Take settlement discounts where possible. Pick up supplier offers. never pass on your better buying to customers, unless it suits for some event you are running. Oh, and with this advice about buying – only do it for items you know you will sell for buying product at a discount and having it on the shelves too long is too much of a cost for the business.
- De-clutter. Sometimes the best way to be able to see your business and what it can do is for you to have less to look at. This means getting rid of dead stock, dead fixtures, dead corners of the shop. Always be trimming, cleaning and looking.
- Change. Every day in your shop change something. Get known as the shop that is never the same. This can be a reason to visit for some shoppers. If you run a set-and-forget business that rarely changes, you give people a reason to walk on by. So, everyday, make a change or two. Encourage your team members to suggest changes. By moving a small stand from one part of the business to another could get it noticed and boost sales.
- Stop all busy work. It is easy in a local small business retail setting to get caught up in back office work and while some office work is vital, too often it can be work for the same of work. For example, one retailer used ton take their daily numbers and enter them in a spreadsheet for analysis when, in fact, their POS software provided even better reporting than the spreadsheet offered – they have never thought to use that. In another case, the business owner banked everyday as they liked the walk. but, it took an hour by they time they chatted to people and while sometimes it was good for them to do it, doing it every day, 5 hours a week, came at a cost to the business.
- Be cleverly frugal. When you are considering spending money, think on it, think about the value for the business from the spend. The money you spend has a cost. today and in the future. Think about the return you could get and the speed of the return. Have some checks and balances in spending decisions to slow them down.
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.
By making every day your payday you bring focus on what matters today and whatwnll matter when you’d decide to sell your business.
If you relentlessly pursue profit with a clear focus you are likely to see profit grow. That’s better than waiting to make money when you sell because that’s less likely to happen in this market.
Doing all this relies on your measuring the performance of your business. The Tower Systems POS software helps with this. It is easy.
My name is Mark Fletcher. I am the owner of Tower Systems. I also own 4 retail shops and several online businesses. Every day here at Tower Systems we live what we say, in our software company and in our shops. We make mistakes, and learn from them. It’s some of those mistakes that got us thinking about this, about the approach of making every day your payday.
While our core mission is to grow the customer base for Tower Systems, we know that key to achieving this helping retailers. Plenty of the help we provide is not software related. While, for sure, our software can play a role, the real focus is on how, when and where local retail; business decisions are made, and that is a reason we share this and other advice at this POS Software News Blog.
In sharing this advice we demonstrate a care for local small business retail and a transparency as to the advice and help we provide.
Today is August 1. It’s a new month. A good day to start on this mission of making every day your payday.