Financial

Tips for Cutting Retail Business Expenses

Are you familiar with the Retail Profit Pie? As a small business owner, it is extremely important to track how your money is being distributed.  It’s even more important in retail because most likely 40-50% of the money you generate is being spent on goods, your cost of goods also known as COGS.  That’s a substantial part of the pie! So I want to share some tips for cutting retail business expenses.

You work HARD for your business and I’m a firm believer that retailers should get a piece of their own pie, whether it’s the form of profit or pay or both. 

Below is an image of how your retail pie should look like.  Yes, this is my fancy artwork. I literally drew this out when I taught a Financial Foundations masterclass with Sarah Nemecek of WE Profit Foundry.  It was this simple hand-drawn visual that seemed to make the most impact and struck a chord with retailers.

This retail profit pie example is extremely relevant if you own a brick and mortar business and pay rent – and if your retail profit pie doesn’t look like this then read on to get my tips for cutting retail business expenses. 

Cutting expenses in ONE of several ways that you can improve your retail profit pie. 


Here are just a few ideas to help retail business owners cut expenses:

Negotiate

This is a powerful skill to have in your shopkeeper’s toolbelt and it takes some confidence to ask for what you want. Some things you can negotiate are:

  • Fees: rent, POS, etc.
    • What can you negotiate for your brick and mortar store’s rent?
    • How can you reduce your POS costs?
  • Interest Rates: credit cards
    • Is it time to call your credit card company and negotiate lower interest rates?
  • Price matching
    • Shop around! Every bit of money saved stacks up!

Budget

Take a really good look at where and how you’re spending.  Most often I find that retailers don’t want to have the tough conversations or make the calls necessary to get better rates or pricing.  If it makes you uncomfortable,  most likely it means it’s something you NEED to do for your business.  I tell my 1:1 clients to step into the discomfort and make the necessary calls, your business is too important not to.

  • Bulk buying
    • Take fewer trips to the store and buy at a discount.
  • Go Paperless!
    • Is this a viable option for you? Save money on paper and ink.
  • Vehicle insurance rates:
    • If you are not driving to your shop as often due to reduced hours and availability can you get these rates reduced? Can you apply additional discounts on top? (Good driver discount, military discount, etc.)

Are you looking for even more tips to reduce your business expenses? Sign up to receive my 20 Tips for Cutting Retail Business Expenses below and get the downloadable tip sheet.

Once you download the tip sheet, grab your detailed Profit and Loss statement and do a deep dive analysis into your expenses.  Trust me, every bit helps so start with this list now!

Want more helpful information?  Listen to the Savvy Shopkeeper Retail Podcast where I publish an episode every week to help you work less and profit more.

Sign up below to receive the downloadable sheet with 20 Tips for Cutting Retail Business Expenses!

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