Keep Your Business On Track

With the economy tightening, retailers are starting to feel the heat. Barry Knight of Smith & Williamson highlights five golden rules for keeping a retail business on track.

1 - Manage stock. Don’t hold on to old products as it ties up working capital, so if it isn’t selling, discount the price and get rid of it. If stock doesn’t sell this year, it’s unlikely to sell next.

2 - Check out the competition. Keep a watchful eye on competitors and if you are doing something different (including buying), make sure that you are right and they are wrong. Adjust your business model when required. The topical example is the drive of the food retailers into non-food. It is very unlikely that a small business can compete on price. It needs to differentiate itself on other aspects as well.

3 - Be flexible and think ahead. Consider changing customer patterns and aim to adapt accordingly.

4 - Stay alert and be realistic. If you realise there is a problem, act on it and work out a solution that can be presented to creditors. Don’t just assume you can trade your way out of problems, more remedial action may be required. Recognise that banks, in particular, don’t like shocks.

5 - Ensure you are adopting best practice. How good is your website? (Ease of use, comprehensive information). Are store opening hours reflecting your customer base? For example, very few people shop on the way to work, so why open a city centre store at 9am in the morning and close at 5pm. Consider opening at 12pm and closing at 7pm.