Beatriz asked a question that so many store owners wrestle with: How do you pay yourself every month when there’s no money in the bank to cover regular expenses?
It’s a great question—because paying yourself should absolutely be a priority! If you’re not paying yourself, your business isn’t a business—it’s a hobby. And I know you didn’t start your store for it to be just a hobby, right?
So, how do we fix this? How do we take a retail business that’s struggling to cover expenses, including paying its owner, and turn it into a thriving, profitable venture?
It starts with plugging the cash leaks in your business.
Plug the Four Cash Leaks in Your Store
If your business can’t pay you consistently, chances are you’ve got leaks in one (or more) of these four key areas:
- Finances
Are your margins where they need to be? Are your expenses balanced, your cash flow steady, and are you actually making a profit? These are foundational pieces of a healthy business. - Inventory
Is too much of your cash tied up in slow-moving—or worse, non-selling—inventory? Dead stock is a profit killer and a major source of cash flow problems. - Team
Are you doing everything yourself, or is your team underperforming? A strong, capable team is essential for scaling your business and freeing up your time to focus on strategy. - Marketing
Is your marketing consistent and clear? Do you have a well-defined customer avatar that helps guide your messaging and reach the right audience?
At RETAILMavens, we address all of these issues in our coaching program. Through on-demand video lessons and personalized coaching, we help retailers plug these leaks, optimize their operations, and achieve consistent profitability.
One Immediate Action You Can Take to Pay Yourself
If you’re not paying yourself right now, the very first step you can take to create immediate cash flow is to raise your prices.
Yes, really!
You should aim for an initial markup of 60% as an average for your store. That means multiplying the cost of an item by 2.5.
Now, I know you can’t do this with every single item in your store—especially if you carry products with MAP (Minimum Advertised Price) restrictions. But that’s exactly why it’s so important to introduce products where you can take a higher markup. Aim for a 3x markup on those items to help balance out the margins on MAP-controlled products.
This one change will add cash to your margins immediately, giving you more room in your budget to cover expenses, pay yourself, and even take a profit.
My Challenge to You
Here’s my challenge to you:
Find a few products in your store that you’re currently marking up at keystone (2x) or even a 55% IMU (2.2x), and bump them up to a higher markup. Then, let me know how it goes!
And if you’re ready to dig deeper into plugging all the cash leaks in your business, I’ve recorded a free class that breaks it all down. Inside, I explain how we tackle these issues step by step in our RETAILMavens Coaching program.
Paying yourself shouldn’t feel impossible—it’s absolutely achievable when you have a clear plan and the right tools. Let’s get you there!