As it has been said many times, it takes money to make money. Running a retail business comes with a host of costs. Whether you are experiencing a financial crunch or are just interested in taking a good hard look at your expenses to see where you can cut the fat, there are probably many areas where you are spending more than you need to. It may take a bit of work, but you will likely be very happy with the results of money saved that can be used to help grow your business. Here are some tips for retail store owners to keep expenses in check.
Do a Thorough Inventory of Expenses
Just like you may take inventory of your goods to what you need more of, you must do the same with all of your expenses. You need to get the full financial picture before you can go about making any effective change to the situation. Write down each and every business expense, no matter how small. From there, you can start going through the list to see what you can do without or what you may be able to cut back on.
Do a Thorough Inventory of Inventory
If you are not carefully tracking how quickly your inventory is moving, you may be needlessly spending money on products that are just sitting there. If you offer seven different brands of a particular product but only three happen to be selling quickly, just stock those three. Research by firms that study shopping behaviors has found that too much selection may actually lead to customers buying nothing at all.
First Areas to Focus On
If you are not sure where to start, you might consider tweaking expenses that have nothing to do with the customers. After all, you need to find that delicate balance between keeping expenses in check while still providing quality goods and a retail experience that keeps customers coming back for more. For example, you might consider getting an energy audit to see how you could cut back on utility costs. If you are paying a lot for various types of software, you might consider moving to a cloud-based service which allows you to access these same programs for a fraction of the price, plus technical support. Switch to internet-based phone and fax services.
Evaluate Store Hours
Longer hours do not necessarily translate to more customers and more money. Carefully evaluate your point-of-sale purchase figures to see if being open certain times of the day is just not profitable for your business. You may find you can save a great deal by opening later in the day or closing earlier in the evening; if your biggest chunk of downtime is smack in the middle of the day, you may need to re-evaluate your staffing during those times to reap cost-saving benefits.
It never hurts to try and get better pricing from vendors; the worst they will say is no, so it is certainly worth a shot. If you are interested in cutting inventory for example, you may have some leverage in getting better pricing if a vendor is concerned he might lose your business altogether. They may also be able to suggest cost-saving measures that you have not considered, such as purchasing a similar, but lower-priced item that meets your needs just as well. So, no matter what the product, whether you want to get cheap plastic bags or a high-end beauty product for a better price, reach out to suppliers and see if you can make it happen. You might also consider looking around at other vendors to see if you can create some leverage through offers of better pricing.
Kelli Cooper is a freelance writer who enjoys discussing all things business.