In today's fast-moving and ever-changing business environment, mistakes can be fatal. Even at best, statistics show that about half of small businesses last less than two years. Even though the list of potential mistakes that retailers can make is long, with the help of our friends at http://www.entrepreneur.com/ we offer five of the key areas to watch for where a mistake can be costly- and devastating for your business.
- Failure to plan effectively and objectively: Many new retailers plunge into business with little more than a prayer and a lot of optimism. In today’s challenging economy, prayers won’t even be enough! It takes time and discipline to prepare a business plan and estimate your financial needs. Nothing kills a retail business quicker than being underfunded to whether slow times, or to cover unexpected start up costs. Planning should also include location research, target market definition and appropriate product selection to meet your target markets needs.
- Focusing on products and not the market: Too many small businesses hang on to products well beyond their optimum selling lifetime. True, key items provide sales and profits that are hard to give up however the law of diminishing returns says too much of a good thing can be a bad thing for your business. Don't become married to your products. Look for signs that the selling is slowing down, and plan for the end of one good item by constantly testing new items and finding new products that can fill the sales revenue you once had!
- Failure to change with the market environment: Where customer’s shop, how much time they spend shopping and what they will pay for products has dramatically changed since the advent of the internet as a viable shopping destination. Don’t let your store get caught in a sales slowdown by not anticipating the changes you need to make to keep current- and relevant- for ALL your customers. For some of you, this will mean an inevitable crash course in marketing online and using technology as a business tool, but trust me, if you don’t study, you will eventually lose out to more updated and sophisticated competition!.
- Underestimating the demands of retailing: Those of us in the retail industry are some of the most passionate people in the world, however, passion doesn’t always translate to profits. The constant demands of operating a successful retail store are all consuming and many times, retailers mistakenly underestimate their abilities to service all the needs of their business. For instance, many retailers don’t carve out enough time for marketing their businesses. They assume that because they have a good eye for choosing product, customers will come. Trust me, if you can’t create effective marketing campaigns to tell your potential customers that you carry those products, your store is a candidate for failure. If you're not prepared to commit a large portion of your life, at least in the beginning, perhaps owning your own store should wait a while longer.
- Neglecting customer service: This may be the single biggest cause of failure for retailers today because so many of them take it for granted. Customers are not there for retailer convenience, in fact, it's quite the opposite. Retail businesses can succeed or fail because of their locations, but wherever you are located, not having business hours to accomodate your customers needs will hasten the process of failure for sure. The other major sin in this category is failing to treat all customers with courtesy and respect. I'm constantly amazed at the treatment customers receive from retail employees. Things as basic as not greeting customers when they enter the store, offering help in merchandise selection, and ignorance about the store policies and stock are commonplace occurrences. Key lesson: Train your employees--and yourself--on the basics of customer courtesy and service.
Although avoiding these five fatal mistakes won't ensure retailing success, committing them will surely bring you closer to the brink of failure. There are so many risks and pitfalls in today's rapidly changing marketplace, it makes sense to increase your odds of success by avoiding them.
For other great tips on small business, CBCG recommends visiting http://www.entrepreneur.com/.