A brand new financial year is upon us. This time of year is when you know your financial side of the business the best. You will talk to your accountant shortly, so now is the best time to consider the coming year.
Those last year's numbers are a treasure map. They can help guide you to the future and help you to steer clear of past pitfalls. Leverage this valuable data to make a winning strategy for the coming year.
I suggest you use the SMART goals (Specific, Measurable, Achievable, Relevant, and Time-bound). Method.
1. Reflect on Your Retail Journey (The Past Year in Review):
Take a moment to review your 2023/24 performance. What were your high points? Where did you face challenges? Our crystal-clear POS system reports will give you much to reflect on here.
These reports can help you identify what worked, what was okay, and what did not. Identify your wins.
One saying to remember is, "Reinforce victories, not defeat." If it does not work, move on; there is no point in being fooled.
2. Craft a Realistic Budget:
We all love dreaming big, but having a solid financial plan is like having a roadmap for your business. Create a preliminary budget for the coming year. Remember, keep it realistic and achievable. An unrealistic budget makes you frustrated, so be honest with yourself. If you cannot sell it to yourself, you will not sell it to anyone else, and it will fall by the wayside.
Consider factors like:
- Projected sales based on past performance and market trends
- Fixed costs (rent, utilities, salaries)
- Variable costs (inventory, marketing expenses)
- Planned investments in the shop, e.g. technology or store improvements
Our POS system can help you make and track these metrics in real time, allowing you to monitor your progress.
3. Know Your Strengths (and Weaknesses) – A Powerful SWOT Analysis:
Every business is unique, just like a fingerprint. Take some time to conduct a SWOT analysis. It might sound complicated, but it is not. It also serves a bonus that people outside your business can readily understand it. I have discussed SWOT here. If you want some help, give me a call.
Note: If there's enough interest, I'd be happy to host another webinar that explains how to conduct a SWOT analysis specifically for retail businesses.
4. Setting SMART Goals:
Now comes the crunch: setting goals! Combine your budget and SWOT analysis to establish realistic yet ambitious targets. Writing your goals down makes them more concrete and helps you stay focused. You will be more motivated when you tick those goals off your list!
Here are some examples of SMART goals for retailers:
- "Increase average transaction value by 10% by December 31st through staff training on upselling techniques."
- "Reduce inventory holding costs by 15% within six months by getting rid of dead stock."
- "Learn to use social media for free advertising."
- "Expand a top-selling line."
5. Embrace Digital Marketing:
In today's digital age, your online social media presence is crucial. Develop a comprehensive digital marketing strategy that includes:
- Social media marketing on platforms relevant to your target audience
- Email marketing campaigns to engage customers and drive repeat business
- Get yourself into Google
6. Master Inventory Management:
Effective inventory management is crucial for your financial success. Use your POS system's inventory management features to:
- Track stock levels in real-time
- Set up automatic reordering. It will save you a lot of time.
- Identify slow-moving items
- Your card department needs monitoring. It is the easiest and quickest department to improve.
- Optimise your product mix based on sales data.
7. Look for new markets:
What you have might be great now, but what about tomorrow?
- Look around at what others similar to you are selling
- I have noticed that clothing, even in shops that appear to have nothing to do with clothing, is doing well. Clothing makes up about 20% of Australian retail.
- You want at any time at least six new products in your shop.
- Look up best-selling lists to get more ideas.
- Ask your customers what they shop for now.
8. Invest in Your Team:
Your employees are the face of your business. Invest in their development through:
- An introductory training session on product knowledge and customer service will do wonders. Is it not better that they learn a few pointers from you, then they learn it making a fool of themselves in front of your customers?
- Creating a positive work environment will encourage them.
9. Adapt to Changing Consumer Behaviors:
Stay ahead of the curve by keeping an eye on emerging trends:
- Products dealing with health and wellness did well this year
- Romance, religion, and cookbooks have done well in books recently. Books overall have done well recently.
- As I said earlier, clothing
Our POS system can allow you to monitor what types of products are selling in your shop.
10. Sustainability:
Sustainability is a problem; you must consider it carefully for your customers. It is vital to many people, and in others, it's irrelevant.
- Consider sourcing eco-friendly products very carefully. Often, people report that they want something, but when offered it, they are not prepared to pay for it.
- Considering electricity prices now, implementing energy-saving measures in your store is worth considering. Even just enforcing rules like turning off machines that are not in use can do wonders.
- Offering recycling programs for your customers as a service tends to bring people into the shop.
It is good for the planet, attracts environmentally conscious consumers, and potentially reduces operating costs.
Remember, the more you plan, the smoother your journey will be. With a clear roadmap and the right tools in place – like our unique POS system – you're on your way. How you want to take it from there is up to you.
As I said at the start, in my experience, retailers now have the best financial information for their business.
