AbangAbu would like to share some of the tips that will be useful in making your business on track. This is even very important during this period of economy where the crisis is still hanging there.
Many retailers have to close down because of unsustainable. This is infact a very serious for the whole economy. Retail industry is one of the major contributors of countries economy growth.
So, In order to make your retail business on track you have to really follow the RETAIL method.
R – Regular Forecast
You have to produce forecast monthly on cash flow. Analysis cash position and bank facilities. Make sure capital expenditure are identified well in advance. You only will go bust when you run out of money. Remember it!!!!
E – Examine
Examine and set realistic banking borrowing. You must reflect the true risk of the business and should not intended to achieve the cheapest cost of borrowing. If that is what you do than you might lose the confidence of your bankers.
T – Throw an Offer
Don’t hold on to old stock. old stock ties up working capital, so if it isn’t selling, discount the price and get rid of it. Throw and offer that they will never want to miss. If stock doesn’t sell this year, it’s unlikely to sell next.
Stay alert , If you know there is a problem, act on it and work out a solution that can represent to creditors. Don’t just assume you can trade your way out of problems, more remedial action may be required. Recognize that banks, in particular , don’t like shocks.
I – Investigate
Investigate the competition. Keep a watchful eye on competitors and if you are doing something different (including buying), make sure that you are right and they are wrong. Adjust your business model when required. (The topical example is the drive of the food retailers into non-food. It is very unlikely that a small business can compete on price. It needs to differentiate on other aspects).
Any retailer must sell above cost and overheads to survive while maintaining sufficient liquidity. For sales, it boils down to making sure that the right quantities of stock are in store, at the right time and at the right price. For costs and liquidity, the management of cash collection and constant monitoring of cost of sales and overheads are vital. I consider these areas risk management and measurement. Get them right, and problems can be identified and rectified at an early stage. Get them wrong, and you suffer.
AbangAbu sure with this RETAIL way you will able to keep your business on the right track.
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