There are two schools of thought regarding the current economy and how it affects independent retail businesses.
Group number one says, “Don’t listen to all the hype and negativity in the media. Retailers are NOT struggling right now, and many are up!”
Group number two says, “Inflation is on the rise. We see it everywhere, and there’s no denying it. No one is shopping, my local economy and residents are hurting, and sales are way down.”
The truth is probably somewhere in the middle. The economy is affecting every retailer differently! In a recent poll I did with members of The Shopkeepers Lab, a majority reported that their sales are up or similar compared to last year.
But there are retailers who are struggling with this economy. If you’re one of them (or just want to improve or preserve your cash flow!), read on to learn what you can do.
To Do: Analyze, Decide, and Implement
Looking at your data is enlightening! Run an inventory, sales, and financial analysis using your point of sale system or other relevant software to get the complete picture.
If you don’t have data to work with, take some quiet time to clear your brain. Think about what your customers are saying to you, what they’re asking for, if they comment that they can never find X in your area or at other stores, or what others are doing in your industry.
Finally, relisten to Episode 123: This ONE thing Creates Value in Your Retail Business.
It’s time to get scrappy!
To Cut: Expenses, Hours, Debt Payments, and Your Take Home Pay
Although it isn’t fun to cut back, doing so will help you in the short term. The goal is to get through a recession without hurting yourself or your business. This can mean sacrifices and having tough conversations, but doing so can keep you from closing altogether.
The four things you can do are:
- Cut expenses
- Stop hiring or shorten hours (if necessary)
- Lower debt payments (temporarily)
- Pay yourself less (temporarily)
If you’re a member of Master Shopkeepers, be sure to watch the “Cut The Fat” masterclass. It has dozens of tips and suggestions for cutting expenses in retail businesses.
To Listen Or Relisten: The Boss Up Minisode Series
When the pandemic hit and many of us were mandated to close, I saw many of the same questions, conversations, and mindset issues I’m seeing now.
At that time (Q2 of 2020), I quickly pivoted from regular podcast episodes to super short mini bits of powerful information to help retailers boss up. I published these 5-minute episodes daily for almost 2 weeks.
Each of these minisodes could be helpful to you, especially if you’re worried about your sales, inflation, and the economy.
Click the links below to listen to the Boss Up minisode series.
To Remember: Mindset And Attitude Are Everything!
I’ll be the first to say that it’s easy to get caught up in news stories and the negativity in the media. It can be frustrating, particularly when it comes to mindset. So I do want you to keep this in mind. How much of this are you consuming? And do you need to take a break from the news and/or social media?
A Master Shopkeepers member recently shared an Entrepreneur.com article titled, I Refuse To Participate In The Recession. It talks about how mindset has a lot to do with how business owners can successfully navigate a tough economy.
The author writes about a business owner and says, “while other people were frozen in fear, he was focused on solutions.”
Two other quotes from the article that stood out to me were:
“During difficult times, there are almost always opportunities that exist, and if you want to succeed, you have to focus on those opportunities.”
“…if you focus on the problem, you will be an expert on the problem. However, if you focus on solutions, you can become an expert on the solutions that will get you through both struggles.”
Focusing on the down will keep you down!
The results we get from our business come from 80% mindset/brain work and 20% tasks and physical work (a perfect example of the Pareto principle!). Work on your mindset, and the economy will feel less scary and more manageable for your independent retail business.
- Episode 123: This ONE thing Creates Value in Your Retail Business
- I Refuse To Participate In The Recession article from Entrepreneur.com
- Episode 129: Ten Tasks Independent Retailers Can Automate
- Learn more about Savvy Shopkeeper’s group memberships
- [04:06] To Do: Analyze, Decide, and Implement
- [08:10] To Cut: Expenses, Hours, Debt Payments, and Your Take Home Pay
- [11:02] To Listen Or Relisten: The Boss Up Minisode Series
- [17:20] To Remember: Mindset And Attitude Are Everything!