Monthly Archives: September 2010

As a retail business, are you fit to survive the recession

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As a retail business struggling to make a profit in these difficult economic times it can be difficult to see the wood from the trees. However, there are some things you can do to improve footfall and cashflow.

Stock

Firstly, a problem I see time and again is businesses with either too much stock and/or old stock, which is taking up room and is unlikely to be sold anytime soon. Stock is cash! It is vital that it works for you rather than becoming a chain strangling your business. Of course, any retailer needs stock to sell, but consumers are fickle and so stock must be current and at the right price for your target market.

If you have old stock have a sale and shift it quickly. You can then use the money made to buy the right stock. Similarly, if you have a lot of stock at non peak times (i.e. just after Christmas) make sure you have a great sale so you can free up cash.

Thinking  outside the box

Many retailers are passive in their attitudes to finding customers. They set up shop and then wait for customers to walk through the door. However, there are complementary activities you can instigate to encourage new customers and increase visits by existing ones.

Some businesses are very good at this already. For example, our local wine shop has wine tastings every Saturday. Funnily enough the shop is packed and, as the wines to taste are often the more expensive ones, the wine merchant is able to encourage people to try wines they might otherwise not consider. He also holds wine tastings at a well known historical venue in December. Customers can order wine at the event and pick it up from his shop at their own convenience. People buy more when they can do so in a relaxed atmosphere  and when they know exactly what they are getting.

Although, these ideas are specific to the wine trade other retailers can learn from this go-getting attitude. Food retailers can have demonstrations and tastings. They can print menu cards to help their customers understand what they can do with the great ingredients they sell. Craft shops can hold craft parties; Book sellers can have readings; clothes retailers can have new season launch events. The list is only as short as your imagination!

It’s all about making the buying experience as enjoyable as possible.

Learn from others

This might sound trite but there are lots of people out there doing it right and lots of people doing it wrong! When you are a customer yourself, take the time to examine what your experience has been. If you have had a really good experience have a think about what made it good and try to implement these good practices in your business. Similarly, if you have had a poor experience, avoid making the same mistakes yourself.

Also, listen to experts. They may come in the form of retail professionals in your local network, or from the TV! I think programmes such as those by Mary Portas are invaluable. Not just because she really knows her stuff but because the people she helps are blind to the mistakes they are making. Could you be too close to your business to see what it really is?

But the real experts are your customers. Do you ask them what they think? Do you ask them what you could do to make their buying experience better? To you encourage them to recommend you to their friends? It is easier to keep existing customers happy than to find new ones, so look after them!

Finally, retailing can be great if you know what you are doing. The problem is many new retailers think it is much easier than it is and don’t take the time to learn anything about it before they jump in with both feet. At the other end of the scale many long standing retailers close their minds to developments in their marketplace and fail to keep up with their customers’ tastes – Woolworths was a classic example.

Fiona 🙂

As a service business, are you fit to survive the recession?

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For many businesses the coming couple of years will be really tough. Although we are, in theory, out of recession the financial difficulties which come from an economic downturn will continue to be felt way into the future.

If you own a service business there are things you can do to make yourself as resilient as possible and I include my take on the most important ones below:

Credit control

In a service company the level of customer spend can be quite high. For this reason it is vital that you review the level of credit you are prepared to give clients and stick to it. My payment terms require that clients pay either by monthly standing order or on date of invoice. Even if they don’t pay immediately at least I can chase from the earliest possible point.

Ensure you invoice promptly after work is completed, and, if the job spans several months, agree stage payments with your client so they don’t owe you more than 1 months worth of work.

Bare in mind that none of us really knows what is going on in another company. A seemingly sound company can be on the verge of collapse due to cash flow problems. Credit checking services can help you assess the credit worthiness of a business, but remember their information is out of date to some degree and they don’t pick up the full picture. The only way to ensure you don’t get caught out is to collect the money owed to you as quickly as possible.

Remember, even the banks are reluctant to be banks at the moment – so don’t fall into the trap of acting like one!

The BEST

A key way to survive the recession is to provide the BEST service you can and be as close to your customers as possible. I see many service providers who think they can get away with average service and who assume clients will stick with them regardless. This is an arrogant assumption which will lead them, quite rightly, to lose good clients to much more customer orientated businesses.

For any business, but particularly for service companies, the relationship you have with your clients is king. A client who knows you well, and believes you are giving him the best, most focussed service available, is unlikely to shop elsewhere, even if he has the possibility of getting the service ‘cheaper’.

Build your referral network

We all know that people buy from people. You are much more likely to engage a supplier who has been recommended to you by a trusted advisor/contact than one you have met fleetingly at a networking event.

For this reason I think it is important to build up a network of people around you who:

– although they are not competitors to you, have the same types of customers as you do.

– understand exactly who an ideal client is for you so they can spot one when they meet them

– understand exactly what you do and the problems you solve for your clients

– are people you would be happy to refer to your contacts so the relationship is mutually rewarding

If you have a strong network you can be much more focussed in your marketing and will be much more likely to get the type of new clients you need.

At the end of the day those businesses which will remain standing will be stronger than they were before the recession, because they will have grasped exactly what makes a great business. The prize for getting it right is not only survival, but the opportunity to achieve great heights once business becomes easier again.

Fiona 🙂

It’s good to talk!

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Over the last couple of weeks I have been to two networking meetings which incorporated excellent presentations – one on presenting and one on getting your message right.

At NRG we incorporate a seminar as part of the meeting so business owners can learn as well as network. Nicky Wilkins did superb presentation for us on presentation skills. Given that most of the people in the room were hardened networkers, and so experienced in presenting themselves, you would have thought that there was not much Nicky could say that would be of interest. However, Nicky’s approach was to remind us of the things we so often forget when presenting information to a room of people. He did this in a way which was lively and engaging – just the way we should do it, infact!

I am also a member of the Mendip Business Women’s forum and the topic for this month’s meeting was ‘Getting your message right’. As with the NRG meeting, this was a subject we should all be working on, so that business owners we meet, are clear on what we can do for them. Jill Green from the Referal Institute’s presentation was both entertaining and informative. Again, much of what she said was obvious, but we often forget the obvious!

Most of us belong to networking groups to meet new people and re-engage with existing contacts. However, those groups which also offer the opportunity to develop your business skills, I believe, are the best value. Additionally, if the opportunity is open to you to present yourself, it can be a superb way of promoting your skills and your business.

Fiona 🙂