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2021 has been some year for sure, packed with challenges, things that can make your retail business less enjoyable than you hoped.

Tower Systems serves thousands of local small business retailers with POS software. We see retail in many situations and, over time, have learnt from these businesses and the people in them.

There is no doubt for us about the value of being happy in retail. But, it’s not something you can decide to feel. It’s not a switch you can flick.

Finding happiness in retail takes planning and engagement throughout the business. While it does sound like work, it is also about respecting the business and that there will always be challenges, and knowing that being happy can help you get through them.

Here are our tips for finding, nurturing and managing happiness in a local retail shop:

Have good data. Yeah, we know this is a boring topic for many. But as a POS software company with decades of experience we know the value of good data. Good data is your rock. Build on a rock and life is, for sure, good. Good data will make you happier because your decisions will be better, and by better we mean you’ll make more money, and that will make you happier.

Be in control. Stop getting pushed around. If a supplier pushes something on your, use your data to deal in the facts. This, too, will make you happier. Facts matter. Any time someone says fro this or that ask for evidenced preferably in your business data. yes, we are still banking on about the value of good business data.

Price for margin. Maximise when you can.

Price for turn. You can’t bank a gross profit percentage until you sell something. So, price to turn, and bank dollars.

Lean on others. Spread the load, share the responsibility. Hire well. Train well. rely on the team to help you and this will make them happier, you happier and the business a happier place overall.

Set your narrative. In social media posts, stories you share in the business and in your marketing set the tone, set the narrative to be positive, happy and optimistic. This will encourage others to do this too. Own your narrative and own your happiness.

Of course, there is way more everyday practical stuff too: happy music paying, happy window displays, happy product displays, featuring happy products, samples, taste tests, games, fun events, giveaways, competitions … all these things and more can make the shop transactionally happy, which is good, too.

Happiness is good for business and all who interact with it.

Good luck. Now, get out there and smile. 😃

Analysing gross profit by floor space allocation should be done at least annually in every retail business in our view. This is based on decades of service by Tower Systems in our work with our POS software in thousands of local retail businesses.

With retail space usually costing between 11% and 15% of revenue in many retail settings, it is usually the next highest cost outside of the cost of stock itself.

Spend half an hour on what we suggest here and the result could provide clarity on immediate steps you can take in your business to improve what you make.

This is not advice you will get from your accountant or from reviewing your P&L or computer reports. It is designed to be practically helpful in managing your business.

Please follow these simple steps.

1. Take a blank sheet of paper, ideally A3, and roughly sketch out the layout of your shop, marking in display units, wall shelving, the counter – everywhere you have product.
2. The floor plan layout should also include your back room if you have stock there.
3. Colour-shade the layout by department. For example, shade all areas with magazines in yellow, all floor space for gifts in blue etc.
4. List the departments on the side of the floor plan.
5. Calculate the percentage of total space taken by each department. This does not need to be accurate to two decimal places. List this next to each department you have listed.
6. Use your POS software to report on gross profit dollars earned by each department over the last year.
7. Calculate the percentage of total gross profit contribution earned by each department as shown by the POS software and list this next to the floor space allocated to each department – on the floor plan map you have done.
8. Circle in green those performing the best and in red those performing the worst. A best performing department will typically be responsible for a significantly higher percentage of gross profit than percentage of space allocated whereas a worst performing department will be contributing a percentage of overall gross profit considerably lower than the percentage of floor space allocated.

Once you have the marked-up floor plan with the space percentage and percentage of total gross profit, think about your floor space allocation.

The above steps do not take into account product size and the average gross profit percentage from each dollar of revenue for a department. For example, ink is a lower margin product than stationery, gifts are a higher margin magazines. Typically, the analysis will highlight challenges with lower margin product.

Here are actions the work you do could lead to:

1. Changing the location of a department within the business.
2. Increasing floor space for a department.
3. Decreasing floor space for a department.
4. Working on improving the GP achieved for a department through better buying.
5. Working in increasing sales for a department to lift the overall GP dollar contribution achieved.

You can take the analysis a step further by looking only at one department and analysing performance by category, using the method outlined above.

For example, in one business we saw a category taking 7% of department space while they contributed more than 40% of gross profit earned from all in the department. It’s this data where good POS software can provide insights.

The type of analysis we are suggesting here is intended to give you a fresh view of your business as you engage in the process of constant change.

Tower Systems is grateful to serve local retailers with POS software, which is backed by everyday retail management advice.,

Labour cost in many retail situations is usually the highest or second highest cost of business after the cost of inventory is considered.

Here at Tower Systems we are grateful to serve a diverse community of retail businesses. It is our experience that labour cost sits somewhere between 9% and 11% of retail sales revenue in these business.

What this means is: if your revenue, where revenue is product revenue plus commission from agency lines, is $1 million, your total labour cost should be $110,000 based on the benchmark.

Labour cost needs to include fair market value for owner labour invested in the business.

Too often, we see business owners putting in anywhere between 60 and 80 hours a week with the majority of this time unproductive

A small business cannot afford unproductive management time. Your big business competitors do not have this overhead, nor should you.

This is why we suggest where possible and practical that you have no back office or, if absolutely necessary, a small back office that is not comfortable.

While many go into business to be the boss and not at the front line serving customers, the front line is where the business makes money. It is where you ought have your best people.

Allocate your boss time to fit with the size of the business. In a typical small retail business turning over $2M a year or less, we suggest boss time should be no more than five hours a week. This, of course, depends on what you do with the time. If you do bookkeeping, saving the cost of an external resource, it could be more.

Use your POS software to track and measure sales by time and sales by employee as these can factor into decision opportunities before you.

A more practical way to look at this is issue of labour cost: cutting three hours paid adult time a day, Monday to Friday, will add more than $20,000 a year directly to the bottom line profitability of the business.

If you think this is not possible, look at where you do your boss work. Some of this could be done at the counter or on the shop floor. You could multi-task and thereby cut paid hours. It all depends on whether you want the business to be more profitable.

One mid-size retail business following our advice based on data in our PO)S software cut their labour cost in the business by $50,000. In the same period, revenue was up 6%.

Getting your labour cost under control and within the benchmark starts with your roster.

Tower Systems is grateful to offer advice and suggestions to local small business retailers that goes beyond what is usual for a POS software company.