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I was talking with a retailer the other day and was surprised to discover that they are advised of the profitability of their business twice a year, when their accountant meets with them, and even then, the information relates to a trading period from two or three months prior.

They have no processes in place to track and report profitability more frequently. They are not looking at GP% mix, say, weekly, looking for trends.

Their reasoning is that the accountant is the expert and that as the retailer they do not have the skills to understand the business performance at that level.

Not knowing business profitability at more frequent intervals and close to the actual performance is a problem for any business.

Gross profit is the pot from which the business pays rent, employees, loans and the owners. Not managing that in a timely manner can see a business slip away.

Too often I see local independent retailers get caught in a narrative no one has any money or the economy is really tough or we’re busier than ever or no that doesn’t sell. More than half the time the statements are checked with business data, which is rare in itself, the statements are not supported by the business data.

My point here is that what matters more than anything else about retail business performance is what business data report, your P&L, profitability reports from your POS software, your evidence. Your business data will guide better business decisions. Waiting a month or two for an accountant to provide their take on what they see is too long.

If you own a local retail business you need to be serious about your business data as it sets you up for trading profitably and selling more easily when that time comes.

So, are you making money in your shop?

Seek out that information and establish processes for you to have easy access to the information regularly. If you are not making money, your only option is to make changes in the business. There is never a real barrier to making such changes.

Fixing profitability starts with knowing where you are at.

Footnote: too many local retailers are drawn to gurus and smooth speaking experts when they ought be more locally and practically focussed on their business. Data is a boring topic, but it is the solid foundation on which valuable local small business retail success is built.

Every retail business can sell more to every customer. This is easy when you have good business data curated by your POS software and use this to make good business decisions.

Making more money from every sale starts with good POS software for this will show basket depth, allied product opportunities and things to avoid. It’s smart to start with what is real in your business and to leverage this to greater success.

In a many retail businesses, the top ten or so selling items will account for between 30% and 50% of revenue of the business.

Look at the top sellers report in your POS software and concentrate on the top selling items. Answer these questions about the top ten selling items from the last three months:

1. Do you have appropriate impulse purchase products located on either side of each top item?
2. Are the top items spread through the store, to maximize customer throughput?
3. How often do you move the top items?
4. Do you have the top ten items in multiple locations?
5. What impulse purchase items do you have at the counter which will appeal to customers who purchase any of the top ten items?
6. Has the list of top ten sellers changed in the last year? If so, how have they changed and what can you learn from this.
7. Are there products which you do not currently carry which you could add to the store to sell with the top ten sellers?
8. Do customers who purchase the top ten sellers ask for any other items?

The idea embedded in these questions is that you use the top ten sellers, or top twenty or top thirty, to focus your attention on items with which you can work to achieve more sales in your business.

By focusing on the top sellers and what you can sell with them you can increase the size of the average shopping basket.

If you can’t see opportunities for achieving more sales by placing products next to or with the top sellers then speak with your team and speak with trusted customers. Don’t rest until you unlock suggestions to try.

If what you try does not work, try more products. I know of retail businesses which have spent months finding add on items to work with their top sellers.

The key to this project is proper use of your Point of Sale software.  You need this to identify the top selling items and to track the success or otherwise of your project to sell more with your top performing stock lines.

There is plenty of additional money to be made from your top sellers. Invest time and attention on this project and get ready to bank the results.

If this all seems simple, it is. We have used this approach successfully in our own shops over many years. We run the shops to give us practical retail experience, so we can better serve our POS software customers.

Tower Systems is not your average POS software company.

In his 1960 book, Reality in Advertising, Rosser Reeves, a respected US advertising executive, introduced the world to the concept of the Unique Selling Proposition, USP for short.

Reeves defined USP in an advertising context:

1. Each advertisement must make a proposition to the consumer: buy this product and you will get this benefit.
2. The proposition must be one that the competition either cannot or does not
3. The proposition must be so strong that it changes consumer behaviour.

In the 1960s and 1970s, the concept of a unique selling proposition evolved from being essential to advertising to being essential in business. Finding your business USP was considered mission critical to businesses, retailers especially. Businesses drifted however and forgot about the importance of a USP.

Jack Trout told us just a few years ago that it was as relevant today. In 2000, he said that a Unique Selling Proposition was mission critical in business in his aptly titled book Differentiate or Die.

Differentiate of Die. There is no doubt about the call to action in the title, no doubt about the consequences of inaction.

Yet many retailers, for the most part, have remained still in the face of an onslaught of competition.

Retail is complex, challenging and changing rapidly today. The differences between competitors fewer. Retailers are surrounded by competition and it grows by the day. Yet many have remained still and done nothing.

Smart retailers are re-acquainting themselves with the writings of Reeves and Trout and leaning about the mission critical imperative of having a Unique Selling Proposition.

Differentiation could be service, products or location or a combination of these. Differentiation will most likely not be price as anyone can match this easily. Price is, after all, the last line of defense in any business battle. That said, there are some major price-focused success stories – Wal-Mart for example. It is rare in an independent retail situation.

To develop your USP, engage with your employees and other stakeholders. Take your time. Determine what you and your business stand for. Following open and honest discussion and debate, the USP around which everyone in the business can willingly congregate will emerge.

A good USP will not require an advertising campaign to communicate. It will become obvious through actions and decisions. By living the USP in every facet of the business you soon become seen as unique by shoppers and this can drive excellent word of mouth and success for the business.

While differentiation in retail is more important today than ever thanks to today’s economic conditions, the approach to the challenge is the same as in the 1960s.

if you are not sure where to start when considering your USB, look at your POS software and the data it curates about your business for in that data will be insights into your points of differences things you can cultivate to have a stronger USP.

Your POS software is a good place to start as your shoppers show you through their behaviour what they like and don’t like about your business.

Tower Systems offers this small business retail management advice because we are retailers too. we use our POS software every day and have done so for many years.

We serve local specialty retailers with locally made and supported POS software created in service of a defined range of retail channels.

Tower Systems is not your average POS software company.