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Those who have spent years working in retail know how hard it can be to make into a lucrative or enjoyable career. The high rates of employee turnaround make it hard to forge meaningful relationships with your colleagues, the relatively low pay means that while your executive friends may often invite you out to join them for dinner in fancy restaurants your lack of funds causes you to make lame apologies about “not feeling too great” to excuse yourself from the possibility of financial ruin. The lack of job security, zero hours contracts, lack of employee benefits, erratic shift patterns and hectic pace make your friends wonder why you’ve stuck it out for so long…
But you can’t imagine a working environment where you’d be happier.
You love the products you work with as much as you love working with people. You love helping people make the right choices and the little ways in which you can enrich their lives every single day. You get to help people every day, you get to extol the virtues of products you’re passionate about and you can’t imagine anything more stifling than giving it all up for the office life. Plus, it’s your hope that the time you’re putting in now and the skills you’re learning will one day empower you to go into business for yourself. No longer would your hard work and endeavor go to furthering the profits of a big corporation, you’d rise or fall on your own terms.
The humble art of shopkeeping is one of the most time-honored professions there is. If you’re looking to set up your own business and take your career and your financial future into your own hands, there’s no purer form of enterprise. Although e-commerce may play an increasingly large role in the way in which we buy and sell a product the high street is far from dead. But if you’re looking to start up your own retail business, you know that it’s a game that requires considerable overheads. When putting together your business plan you will likely need to do a thorough cost analysis. After doing the math you may well look at the numbers and wonder if it’s even worth bothering. Even if you’re able to secure funding from a bank or alternative lender you may balk at the inherent costs of starting up and maintaining a retail business. But don’t let those scary numbers put you off. With your experience, imagination, and ingenuity, there’s no reason whatsoever why your retail business can’t be a success. It’s simply a matter of finding ways to reduce your startup and operating costs without compromising on the quality of the customer experience.
Don’t be afraid to invest in areas that will generate more money in the long term
Like most nascent entrepreneurs you’ll likely start out wanting to keep your overhead costs to a bare minimum. The less you have to borrow, after all, the less you’ll have to pay back and the better protected your profit margins will be. But this mentality borders on a false economy. You shouldn’t be afraid to invest in areas that will either save money or generate more economic activity than they cost. It’s simply a matter of knowing the fiscal multiplier of every spend. But the return on investment ratios is easier to quantify in some cases than others.
Let’s say, for example, that you’re torn between two POS systems. One is cheap but prone to errors and freezing. The other is state of the art but inexpensive. Investing in the latter will cost you more, sure, but it will benefit your business in ways that will pay off later. It will, first of all, make you and your employees more productive and reduce wait times in busy periods. It will also enrich the customer experience resulting in greater retention (more on that later). When starting out it’s important not to fall into the trap of treating all costs as equal and instead of taking a long, hard look at the ways in which the investment will better your business.
Cut down the costs of shopfitting
One hurdle that retailers face more than any other business (except perhaps for restaurateurs) is the cost of shopfitting. In a digitally driven era, retail is all about the customer experience and you’ll need to put a lot of attention into the design aesthetic and layout of your store if you’re to keep customers coming back time after time in an age where they know they can afford to be fickle. But the good news is that creating a beautiful aesthetic for your store needn’t cost the world.
If professional shopfitters are beyond your budget, you’d be amazed at what you can accomplish with the right rented tools, a few handymen and a whole lot of creative vision. Indeed, using discounted gift cards so that you can save at Menards, loading up on tools and supplies and treating the project as if it were a household renovation might make it both more affordable and less stressful.
One of the most important things to remember in a fit out is to keep it simple and focus on quality rather than ostentatious flourishes. The more you keep it simple, the easier it will be to budget and keep costs manageable. Avoid making structural changes to your store as this can get very expensive and can take a long time, and the longer your doors are shut the more of a loss your store is making.
Focus your efforts on customer retention rather than acquisition
In the age where digital marketing is one of the key considerations for businesses of all types, shapes and sizes, it’s worth remembering that it costs up to five times more to attract a new customer as it does to retain the loyalty of a customer you already have. Thus, all that money you were thinking of spending on a Pay Per Click ad blitzkrieg on social media may actually be better spent on customer retention and loyalty strategies. Not only are repeat customers cheaper to retain, they tend to be a higher value than new customers since brand loyal repeat customers tend to spend more money than first-timers.
In this instance, you may benefit from taking a page from the Uber playbook. The taxi giant not only has its own rewards scheme, it also incentivizes users to share the service with friends, colleagues and family with promotional codes which earn free rides both for the new customer and the existing customer who referred them.
Rent out excess space
Contemporary retail is all about the in-store experience, giving customers a beautiful and well-appointed space in which they can shop comfortably and in style. Increasingly, retailers have begun to incorporate coffee shops, galleries and other communal spaces into their premises. If you have a space like this in mind it can likely generate a great deal of revenue for your business (since food and drink tend to have much higher profit margins than the other products you sell). But if there are times within, or after, the working day in which this space is not used, you may wish to rent it out to local community groups, book clubs, charity coffee mornings, prayer groups and the like. Not only will this help you to generate even more revenue to offset the high running costs of keeping a retail premises alive, it will strengthen your community links, invite co-branding opportunities and at the very least introduce your premises to a wave of prospective new business.
Just because you’re a physical presence doesn’t mean that you should eschew e-commerce
If you’ve made your living from brick and mortar retail it’s understandable that you might see the adoption of e-commerce as something of a conflict of interests. A little too close to fraternizing with the enemy. But even brick and mortar stores can benefit from a “bricks ‘n’ clicks” approach to retail. “Blended” retail is an approach that will allow you to make money from the improved reach and lower overhead costs of the e-commerce experience but not at the expense of your in-store emphasis. A blended approach can offset the seasonal slump many exclusively physical retailers experience while also creating greater brand awareness and expanding your reach exponentially.
Look for Automation Opportunities
One of the most important skills of business management is proper resource allocation. As necessary to your employees are and as much as they may contribute to the ongoing success of your business they are another overhead that needs to be managed. In order to generate more revenue for your business than they represent in overhead costs they need to be as productive as possible, driving sales and enriching the experience of your customers. This means that you should create opportunities for automation that will free them up to do what they do best and reduce their time spent on administrative tasks like answering the phone or handling rudimentary customer queries. An automated message redirecting customers to your website, making sure said website has all the pertinent information customers will need and using chatbots on your site to field rudimentary customer questions can reduce the pressure on your sales professionals and allow them to focus on shifting your products and making you money.
When you can drive down costs while creating opportunities for growth, your retail business is onto a winner!
I’ve done all the things! Girl, I’ve washed my face. I’ve trashed everything that doesn’t spark joy. I’ve walked the baby steps. I’ve cried. I’ve prayed, but my perfectionism has really held me back.
Perfection Hangover can be crippling. Stop comparing yourself to others and start living your best life! That’s why PH exists! I want to encourage you to take control of your money, your blog, and your business.