On The Shelf Or In The Bank?

Where would you rather have your inventory dollars situated? It sounds easy to answer, but those in the business know that it is a tough thing to execute for even the best retailers in the marketplace.

Think of it this way- every item you have sitting on your shelf should eventually be transformed into cash in your bank account, and the sooner the better. As long as it's inventory, it's basically dead weight. If it is not moving, you're not having cash flow. So, what is YOUR plan for turning inventory into cash for your business? Here are some of our favorite ways. Want to add your own? Drop us a line. dave@cbc-group.net.

Here are six recommendations to minimize the cost of your inventory:

· Attempt to forecast as accurately as you can the day, week and month what you expect to sell. We all know that inventory levels grow during the fall season as Christmas approaches-but do you plan to taper your stock levels as Christmas draws near so you don’t end up with overstocks in January and February?
· Determine which item accounts for 80% of your sales. Staying on top of the best sellers will allow you to focus your attention on items that are driving sales and profits for your store. Likewise, I also suggest focusing on the worst selling (I like to use 10%) items in your stock. This will allow you to cut your losses and stop funding items that bring no revenue back to the store. You’ll be amazed at what focusing on the top and bottom can do in a very short time.

· Determine how fast you can get inventory, once you order it. Push your suppliers to deliver as close to your time of need as you can. Better for your cash flow to have it sitting on their warehouse shelves than yours when you don’t need it. Example: Some firms can use "just-in-time" inventory which enables them to receive their order the day they need it.

· Determine your economic order quantity and don't order too much inventory just to save a few pennies. Remember—once you take delivery of the merchandise, you are expected to pay for it. If it sits on your shelves for 3 months and you save 10 cents—is it really good for your businesses cash flow? Could you have been using the money you paid the invoice with to do some marketing for the store during that same time period?

· Shop around and make sure you are getting competitive prices. The internet provides a great opportunity to see what selling prices are at retail these days. If you see a much lower retail price from one of your existing suppliers, you should ask for a discount on the same products. It’s not competitive of you to have higher priced merchandise than your fellow retailers!

· Develop a policy for determining what is obsolete inventory, and how you can get rid of it. One of my favorite sayings holds true for retailers across every product category. “Slow moving inventory is NOT like fine wine, it DOES NOT get better with age!” Come up with a plan to assess and then dispose of slow moving merchandise. This should take place all year long. Not just after Christmas!

So what are you waiting for? Go turn that inventory on the shelf to cash in the bank! And let us know how it goes!

Strategies: Set goals to make things happen in 2008

Your list of things to do is still 2 pages long and you still haven't gotten that well deserved vacation after the holidays, have you? Ah, the life of a retailer is never easy.
But no matter how busy you are, to be a truly successful retailers, you MUST take some time out to set some business goals for 2008- AND DO IT TODAY!

Now these goals aren't written as full fledged business plans (hopefully, you already have one that guides your business decisions on a daily basis, right?) but they are the steps that should help you achieve your business goals for 2008 and make the planning of your daily business a bit more strategic- even when it gets crazy in your store!

So where do you start? What should your goals look like? I propose this:

Ask yourself and answer the question "What do I most want to accomplish this year for my business?
Now-- write down the answers.

1. Make your goal specific. Be very clear, "I want to make more money this year" is nice, but how are you going to get there? Instead of "Send emails to customers" how about writing your goal like this? "Create an effective email marketing campaign each month that generates an additional $2,000 in retail sales for my store and gather 20 names each week to add to the email distribution that I am sending it to." This goal clearly defines the goals for distribution as well as sales that will come from this effort. It also clearly states the message so that all of your employees know that collecting email addresses will be a priority this year.
2. Make it positive. It's usually easier to add something good to your life than to remove something bad. State your goal in positive terms. "I am excited and looking forward to creating new and unique marketing messages for my customers via email this year."
3. Set a time frame. Even the smallest task has a deadline. Shouldn't your very important business goals have deadlines as well? Don't give yourself too much time to achieve the goals. Make it realistic, but push yourself and your employees to get it done as quickly and efficiently as possible. The sooner it gets done, the quicker you will see the measureable results you are looking for.
4. Make it achievable. Choose a goal that you have a realistic change of being able to reach. Don't set a goal that has continually not been achieved; start fresh and give yourself a chance to succeed.

Wha'ts next? After writing down your goals, choose three of the goals you have written down and COMMIT to achieving them in the first quarter of this year. Seeing yourself achieve these goals so early in the year (and reaping the business rewards because of it) will give you energy and momentum to set out achieving the others on your list just as quickly.

And what to do if you finish the list of goals mid way thru the year? Add new ones! Continually pushing yourself, and your business to new heights will bring financial and personal rewards for everyone involved!

Start today, set goals for your business, and go out and make it a great 2008!

9 really GREAT reasons to do Strategic Planning for your business

It's December and while most retailers are focused solely on the day to day operations of their business, there are some others who are already focused on planning for next year. These exceptional retailers aren't panicked this month because they have been planning for it all year long. They understand the value that comes from proactive planning instead of reactive decision making for their businesses. These retailers are executing a strategic plan that is playing out in their stores today and every day of the year. And you can too! It just takes a commitment to planning for your store. Why not make 2008 that year? Need more reasons?

Ok, here are my top 9 reasons to do Strategic Planning

1) Strategic planning allows you to sharply focus your efforts on what is most important to the success of your company
2) You can improve tomorrow’s results thru effective and efficient strategic management every day with every employee playing a role in the success of the plan.
3) Your store can achieve it's highest potential-- and you can actually plan what that is!
4) Strategic planning allows you to take control of your company’s destiny by establishing a lean, effective process that fits your business needs and goals
5) Thru the Strategic planning process, you can learn ways to stretch yourself and your company to achieve higher levels of success
6) Deal with rapidly changing developments that will confront your business for years to come
7) Walk away with a comprehensive plan for translating that new strategic direction into personal alignment and involvement for your employees
8) Generate motivation, enthusiasm and commitment for the plan
9) Accomplish all of this without interfering with the conduct of your business

• If you plan for your success , some key results of a successful Strategic Plan will be
• Creating a strategic team
• Find your unique Strategic competencies
• How to select and exploit the best opportunities
• Dominate your market
• Protect your company from potential threats
• Allocate resources to meet objectives
• Ability to measure key success factors
• Learn how to make good assumptions
• Get from where you are to where you want to be- road map to success and timeline

Start planning today for your businesses success next year -- and beyond!

Strategic Planning- Necessity or Nicety for Your Retail Business?

No matter what type of retail business you own, it is important to do a little business soul searching (we call this strategic planning) to make your business as successful as it can be.
Every business – no matter what- should do some sort of planning for the future. Besides making your day to day job easier—it’s just good business!

If you don’t create a plan, how can you tell your business is on track? How will you tell others where you business is headed if you don’t even know? Or better yet, how will you measure success if you don’t know what the plan is?
Let’s start with some definitions. What is Strategic Planning? Strategic planning is a process whereby you dissect your business to determine its strengths and weaknesses. During this process you set your company's goals, objectives and mission statement. In other words, it's a soul-searching exercise for your business. Strategic planning will help you answer the following questions that are key to your businesses’ success.

1) Why does my company exist?
Why are you in business? Are you in business because there is a need and you're filling the void? Are you in business because your hobby has grown to a whole new level and its time to make it a legitimate business? Look honestly at this question and answer it truthfully. It will save you much heartache- and profit- in the long term.

2) What does my business do?
Key here: Outline your core business. Writing down your core business will keep you and your employees from getting sidetracked. If your business strays from the core and starts to falter always go back to your strategic planning to see how far you've veered from 'what your business does'.
If it’s deemed that changing direction is what you do, then you need to re address our strategic plan to redefine and realign your business goals.

3) How does my business do what it does?
This is your small business philosophy. This is an important question to answer. Once you've come up with your company's philosophy or mission statement, make it well known to all who works for you. If you're true to your mission statement, your clients will see the fruits of your effort in all that you do. In the product that you bring in, with the employees you hire as well as how you merchandise your store.

4) How do I measure my business' success?
How do you know if you're on target? You must establish a quantification of your success. Define goals that are easily measured; increase customers by 15% each year, grow sales by 6% annually, improve profits by 10% annually. These are all goals you can measure. Once you've come up with your unit of measure, review your progress regularly.

5) Why come up with a strategic plan?
Your business' strategic plan will become your company's blueprint. Think of it as your road map and instruction manual. As your business grows and you are faced with difficult decisions, take a look at what you developed and written down during your strategic planning stage. It will serve to remind you and your employees of the company's core values and mission. It will help to redirect your energy and the energy of your employees when faced with tough decisions.

6) When should you to create a strategic plan?
It's easy to get bogged down in the day-to-day operations of your business. Once you're up and running and meeting your customer’s demands, it gets more and more difficult to take the time to go through the business soul searching. You MUST find time even during the busy Holiday season to sit back, review your company mission and to create a plan that will guide you thru the upcoming seasons and year.

With time at a premium, it is better to work smarter than harder. A well thought out strategic plan will help you to work more efficiently rather than harder. Additionally, a strategic plan is a philosophy to share with your employees. Making sure that everyone on the team is marching to the same drummer will help you find success all year long.

Need help with a strategic plan for your retail business? Contact CBCG today. lynn@cbc-group.net.