As the owner of a retail business, you already know it’s tough out there, and it’s only going to get tougher. This economic slump is affecting your business. What can you do? I say-- let's make a deal.
In these times, you need to be especially focused on our bottom line in our negotiations with vendors, customers and everyone else. So how should we negotiate differently in this economic environment?
You're not the only one who's having trouble. Your suppliers are also trouble and they too are searching for ways to stop the bleeding they are experiencing. As a retailer consider how many suppliers you impact and how your existence ensures theirs in some way. Step out of your business for a moment and look at the world through their lens. By being objectively aware of their perspective and you’ll be able to successfully negotiate potential savings for your business.
RENEGOTIATE GOOD DEALS: Take advantage of the current buyer’s market to strike advantageous deals with landlords, suppliers, creditors and others. Just about everything is up for negotiation these days including existing agreements. Suppliers may be willing to exchange price reductions for longer term volume commitments, landlords may be willing to lower rents rather than face vacant store fronts, banks may lower credit card rates and vendor transaction fees, cell phone providers may lower rates rather than face high customer acquisition costs or loss to Voice over Internet Protocol services (such as Skype). It’s crucial to ask all your vendors and service providers what they can do for you and your business. If it’s not the right price, shop around. “People are cutting deals all over the place.”
BARTER: This time-tested mode of exchanging goods has a place in the modern market especially when cash flow becomes a problem. From Santa Barbara to Miami, barter is catching on. Does your web site hosting service require apparel for their staff? Did your graphic designer just have a baby and have a need for your products? Be creative and ask how you can work together and collaborate on ways to help each other. “It’s a ‘win-win’ with no cash either way”.
REVIEW YOUR ACCOUNTS RECEIVABLES: When things are starting to turn down, you want to keep a sharp eye out for someone who is in to you for quite a bit, because if they go under and cash is tight that could have a huge impact on your small business. Think about how you can help them get back on track. Be proactive but understanding – they will be more likely to take your call. Similarly, review your agreements with suppliers. Maybe you don’t have to pay in 30 days; maybe you can pay in 45…or 60. Negotiating your payables will help with any potential financing gap created by a delay in payments from your receivables.
This is just the beginning. Consider evaluating all aspects of your business for opportunities to negotiate better rates and terms that directly lead to bottom-line profit improvements. This diagnostic will help you develop an improved understanding of your suppliers’ capabilities to service your business needs and permit your business to be more competitive in your market every day. Come on - Let’s Make A Deal!