Ep. 70 Six Ways to Transition from Shop Owner to Retail CEO
Many of us open or start our businesses without a business plan, a formal education, or any guidance or mentorship regarding running a retail business.
And this isn’t a judgment of anyone—this was ME! I started my business without any plan, mentorship, or education, too.
When we open, we tend to think about the basics. We’re thinking about manually pricing our products, getting a cash register drawer, setting up our POS system, and maybe creating a spreadsheet to track finances. We sometimes blend personal finances with business finances.
We think so small when we start that we don’t even consider working with other experts.
“A company may need its founder to manage day-to-day tasks in the early phases of its development, but there comes a point when that founder needs to be more of a captain and less of a sailor,” says Krister Ungerböck, a communication consultant.
As the owner of your micro-independent retail business, you need to go from sailor to captain.
What’s Holding You Back from Becoming the CEO of Your Retail Business
Shopkeepers have many fears that hold them back, especially when we talk about claiming the CEO title. Here are some of the predominant ones that I hear in conversations again and again with shopkeepers:
I hear this often, particularly from business owners who are bootstrapping—that means paying cash for everything without the help of loans. This is how my sister and I started our business, and we still have NO debt. We want to keep it this way!
There is nothing wrong with starting and growing a business by bootstrapping. But if you want to grow, you’ll have to start treating your business and YOURSELF differently.
Lack of Knowledge
“I don’t know” can really keep a business owner stuck. When you tell yourself “I don’t know” how to do this or how to do that, you’re only keeping yourself stuck in procrastination.
Why do shopkeepers procrastinate? Because it feels good to the brain! We have to start practicing is making decisions from our prefrontal cortex, the small area of our brain that makes executive decisions.
Shame Around a Situation, Particularly Finances
This one comes up so often, and sometimes shopkeepers don’t even realize it.
Shame seems to come up most often when it comes to bookkeeping and finances. Many shopkeepers have been in business for years but haven’t set up a bookkeeping system or hired this out. They have years of messy numbers, intermingled personal finances, stacks and stacks of receipts, or they are dealing with mismanagement of finances by other family members.
Shame often leads to avoidance. But you can let go of the guilt and stop holding your business back!
Some shopkeepers are drowning in so many other tasks that they can’t fathom investing time in setting up a complete inventory management system.
Trying and Getting it Wrong
It is scary to change your business, especially when you can’t look into the future and know it will be alright. Pushing through the discomfort of your fears and moving forward is often just what we need to do to help our businesses grow.
How You Can Transform from Shop Owner to Retail CEO
There are six key things that I’ve seen shopkeepers do to make this transformation. And they all revolve around setting yourself up for success as the CEO, particularly by giving yourself access to the information and systems you need.
1. Set Up a Robust Inventory Management System
Yes, you need a legitimate system with SKUs, the cost of each item, the retail price, etc.
Knowing your inventory data will help you understand what categories or products are performing well. Trust me when I say this, you probably think you already know which products are doing well, but I’m always surprised by something when I run my reports!
Having this under control will help you make buying and planning decisions from a place of empowered knowledge rather than haphazard guesswork.
2. Find an Insurance Agent
Are you fully insured?
You invest a lot into your business, whether you have an in-home studio or a brick-and-mortar store. Your inventory, equipment, skill/services all have value and should be insured to protect yourself AND your customers.
3. Hire a Bookkeeper and a Tax Accountant
Hire a bookkeeper who is familiar with retail business models. They will ask you for the right pieces of information, including things you may have never considered or considered tracking, like…
- Value of your Inventory on-hand
- Accounts Receivable
- Assets (yes, you probably have some assets!)
- Gift Cards (outstanding vs. sold for the year)
- Donations (inventory or gifts)
All of this is really important come tax season! This information is used to create your P&L and balance sheet, two extremely valuable tools for retailers.
Recently, a Master Shopkeepers member said, “I have spent all weekend understanding and compiling my first REAL (like with real numbers) quarter P&L and Balance sheet! WOW! I always thought, ‘I know my numbers, we sold xxx in quarter one, and I have xxx in the bank. We must be doing great.’ Let’s just say that now that I have all accounting completely up to date, we are rethinking A LOT!”
As this member pointed out, it’s not enough to just know your monthly revenue.
4. Work With an Attorney
Attorneys can help with several legal aspects of running a business, including…
- Business Structure—does it need to change? Is it the right one for you?
- Partnership or operating agreements
- If you plan to sell your business, are things in place for an exit strategy?
And this may not be business-related, but it’s still worth mentioning—attorneys can also help you set up wills or trusts if those are important to you.
5. Add a Financial Advisor to Your Team of Experts
Yes, I want you to start considering your financial wealth.
You can work with a financial advisor to discuss….
- Personal investments
- Potential Real Estate investments
- Retirement planning—don’t underestimate the power of starting small or even starting when you’re 50! It’s not too late!
Sidenote: This topic has me inspired and motivated. I am so passionate about helping others build their businesses and wealth. Wealth is relative. It doesn’t have to mean millions. Wealth is different for all of us.
I’m far from a financial advisor, and I do have regular retirement investments in place from my former 20-year career. One small thing I did for myself a few years ago, though, was set up the Acorns app on my phone.
Acorns is an investment app that lets people automatically invest spare change from debit and credit card purchases. By “rounding up the spare change” and I think investing $5/week, I have almost $3k in this account.
Is $3k enough to retire on? Heck no. But this can be an excellent way for someone to start.
6. Create a System for Team Building
If you want your business to grow, it means letting go of control and hiring help. It’s time to start building your system for hiring, or if you’ve already hired, a system for managing your team. Here are some things to consider:
- Create an Employee handbook for team members
- Build out your documents for hiring, an application, and job descriptions
- Set up operation documents that explain your Standard Operating Procedures (SOPs) for you, your manager, other team members
I can’t stress enough the importance of systems. They are one of the most effective tools for time management, and they help your business run efficiently.
Where to Start: Go From “I Don’t Know” to Confident Retail CEO
If you’re telling yourself you don’t know how to start, who to turn to, or who to hire…I’m calling your bluff.
You have fellow business owners to ask. Maybe there’s a local chamber of commerce you can turn to for referrals.
And if you’re a member of the Shopkeepers Lab or Master Shopkeepers, you have access to tons of resources to work on these six essential CEO tasks! From our private group—where you can ask for recommendations from over 150 members—to the templates, guides, and videos available as part of your membership, you have everything you need to get started with being the actual CEO of your business.
I know firsthand how we can keep ourselves small because our brains want to be comfortable. But I bet your HEART is ready to play BIG.
Play big! I’ll be here cheering you on.
- How Entrepreneurs Can Stop Getting Wrapped Up in the Day-To-Day (article from business.com)
- Join the Shopkeepers Lab
- Get on the waitlist for Master Shopkeepers (reopening in June 2021!)
- Sign up for 1:1 coaching with Kathy
- [03:13] Shopkeeper Shoutout: Joe Consford of Hardware on the Square
- [06:56] What’s Holding You Back from Becoming the CEO of Your Retail Business
- [12:00] How You Can Transform from Shop Owner to Retail CEO
- [23:23] Where to Start: Go From “I Don’t Know” to Confident Retail CEO