We are talking about the four basic segments of your Roapmap to your Breakthrough.
4. Customer Service
Last week, I addressed customer service. CLICK HERE TO READ IT.
Let me start with the definition of breakthrough. It includes removing a barrier to success. In my experience, that barrier is often a lack of knowledge and fear. Retailers say that they want more profit but they don’t know how to get it. I can give you the education. When I tell them that it WILL involve numbers, they get scared.
That is stupid.
Listen, if you REALLY want to end up with more dollars in your pocket, you are going to have to not be afraid to look at your numbers! I have been working with retailers for over 14 years and I can tell you for sure that it is NEVER as hard as they think it will be.
The next segment of your roadmap is about your inventory. First, let’s see if you have too much inventory by comparing last year’s sales to your current stock level. If your 2012 sales were $400,000 and you have $500,000 at retail on hand right now, there is a problem! I see this all the time with new clients. You want to aim for a 60 to 90 day supply.
Now look at your inventory level by class to see if it is in line with your sales. I tell my clients that every customer walks into your store and used their dollars to VOTE for what they want you to carry. We keep track of those votes by tracking sales by class. Then I want you to make sure that you have enough for them! You are losing business if you don’t. But you don’t want to carry too much either. It is a fine line that you must walk. (NOTE: I use a fantastic OTB system with my private clients that increases their profits so much that it pays for their investment in me at least 2 times each month. Want to know more? Just ask – it is an easy way to succeed)
Next up is profitability. The key here is to make profit planning a priority. An amazingly underutilized strategy is to set a monthly sales goal and gross margin goal…and WRITE IT DOWN, share it with your staff and update your progress. Provide incentives to your staff for making the goal – store gift cards, getting to leave 30 minutes early, Starbucks gift cards. Be creative and it doesn’t have to cost very much.
Your initial mark up (IMU) plays a big part in your profitability. Aim for an AVERAGE of 55% IMU on everything you carry. Just to clarify – that means that on a $10 item, the mark up (AKA gross profit) is $5.50 and the cost is $4.50. Some items come with a MSRP, but others allow you to take up to 70%. Look for those items that are less price sensitive like jewelry and small gift items. My colleague, Debbie Scholl from Fundamentally Toys, loves RETIREMENT ITEMS. Those are ones that give you a high margin and a big volume. Be on the lookout for those and make them a key item for as long as you can! You’ll get your retirement!
Finally, let’s talk about marketing. Want to know the biggest mistake retailers make here? They don’t spend enough time doing it. The result is that their marketing is done poorly and at the last minute.
You should spend 20% of your time on marketing your store. Hear me clearly. That’s right – I mean a full 1 out of 5 days. Eight hours out of forty should be spent crafting marketing/advertising or doing it!
Start by creating a marketing plan. There is a concept not done much! Listen I understand. I know how busy you are. BUT if you aren’t driving customers into your store with good marketing – then you won’t have anything else to do. Be proactive. Rough out a marketing plan for the year. Plan your marketing around holiday – both national and off-beat. Celebrate Pink Day, Children’s Book Week, National Fly A Kite day. You get the idea. Have fun with it.
I am ending with a direct quote from Debbie – there is such wisdom in it!
If it’s not FUN, it’s not Feasible.
You can’t be truly successful and miserable at the same time.
It’s your experiences that matter in the end; so make sure to have the most enjoyable life and business imaginable.