Downing, Childs & Musser

The short answer is, “Yes.”  The longer answer is, “Yes, if they do what big box stores can’t.”

The chief advantage that small operations have over their larger counterparts is that small operations can offer a full selection of high quality, specialty goods coupled with extraordinary product knowledge and outstanding service.  Customers will pay a small premium for the improved quality, knowledge and service, but it’s not enough just to stake out your niche.  To succeed, small retailers must have:

Focus

A small operation can’t be all things  to all people.  It can’t even be everything its current customers might want.  It can only profitably be that which it simply does better than anybody else.  Expanding into new lines, categories and services may seem to be a logical way to increase sales, but more often than not it only dilutes management’s focus and increases costs.

A Plan

Show me a retailer that plans well and I’ll show you a profitable retailer.  Without a plan, the future is something that happens to you.  In the short-term, a plan is a series of benchmarks that helps you know if you’re on the right track. 

Longer term, a plan reflects your strategy… it helps you prepare for where you want to be in the coming years by showing you the next step on your path.

Decisiveness

One of the chief advantages a small retailer has is the ability to move quickly.  It takes retail chains a while to move, giving smaller rivals an opportunity to exploit.  But too often, small retailers concede this advantage by indecision.  If there is anything that prevents you from moving quickly and with resolve, take it out of your process.

 Financial Acumen

Let’s face it, the days of simply keeping your eye on sales and figuring everything else will take care of itself.  Small business owners must acquire a basic understanding of financial fundamentals, which include balance sheets, profit and loss statements and cash flow.

 They must also track the three main retail benchmarks:  inventory turnover, return on investments and debt to equity.  If you are unfamiliar with these calculations, just call us at 740.992.3381 or 800.454.1096 and we’ll help you apply them to your business.

Systems Aptitiude

It’s not just that every retailer needs a computer system, but it also must use it to its full capabilities.  According to Hurlbut & Associates, a leading consulting firm with a specialty in retail, most retailers use much less than 50% of their system’s available functionality.  Whether the functionality is customer relationship, inventory or operations management, every small retailer must challenge itself to learn everything the system can do for them.  It’s a tool that’s just waiting to help you identify your best customers, your best and worst stocked items and areas which could be handled more efficiently.

Employee Empowerment

The most powerful asset any small retailer possesses is its employees, and their accumulated knowledge, expertise and experience.  Leverage that asset.  Give your employees the tools and authority to do their job, and let them do it.  Establish clear, challenging, yet attainable objectives, monitor their performance and coach them when they fall short.  Every employee wants to feel he or she is making an important and meaningful contribution to the success of the company.  Give them the freedom to make mistakes and learn from their mistakes, and the discretion to take risks, try new things and solve customers problems.  

Keep Moving Forward

This is a straightforward concept,  but a difficult one to practice.  Try to measure your business’ “fresh factor.”  Once  you measure it, you can manage it. And once you can manage it, you can manage it proactively.   Challenge yourself and your employees to constantly be improving on every metric you measure.  The objective is to set the pace in  your market, and to constantly get better.  In any market, the leader sets the pace and it’s always easier to set the pace than to be constantly struggling to keep up. 

Customers will always gravitate to the leader.  The future belongs to those small retailers who dedicate themselves to being  the leader in their chosen markets.  These ideas are taken from Hurlbut and Associates, a leading retail consulting firm committed to helping small retailers thrive.  They have other ideas available on their website www.hurlbutassociates.com.