Launching my first business. I realize everything must be in order, but is there some area I need to pay a disproportionate amount on that will ensure a greater probability of success i.e. accounting, sales, inventory management? I know mistakes are a part of the success process but I'd rather learn from others mistakes and advice when necessary.
Here is my advice:
1. Cash flow is king. Have a system to manage cash flow early on because it can cripple your business if you don't fully understand it.
2. Have documented processes for how your team do everything otherwise you will work 24/7 and no one will ever do it like you.
3. Be clear on your customer service process, and policies. It's important that everyone know what is expected and allowed when it comes to treatment of customers.
4. Be a pro in how you merchandise, clean, organize and brand your store. Most small businesses look like they are held together with scotch tape. Don't be that business.
5. Hire someone who has retail expertise to help you when you need help. You don't know what you don't know and someone who has run their own retail business can help you.
6. Measure everything.
Many mistakes are related to the choice of brand name and the domain name(s) to back it up. Since that's my focus, I tend to notice those mistakes most often. But, of course, there's a lot more involved in running a business than just that -- and we can make mistakes in anything we do or don't do.
If you're uncertain about your own name or domain strategy, give me a call. Even though I make money from naming campaigns and domain procurement, I frequently tell people NOT to hire me because their name is just fine and they've already got the domain(s) they need. On the other hand, early detection is the key to long-term wellness ... with branding and online positioning quite as much as with physical health. The later a corrective action is undertaken, the more expensive it turns out to be.
Inventory - Manage it properly!
Watching the rate of sale of every category of inventory is critical for success. For example: Did you sell $2000 worth of category 'A' last week? Sounds great, but is it? If you only had $10K of that category in stock, then you have done a great job with your buy as you only have 4 weeks left of inventory in that category. If you currently have $50K of inventory in that category you may be in trouble as you have 24 weeks left to sell inventory that could get dated prior to that point, forcing you into a markdown situation. As Lisa said, cash is king and this will hurt your cash flow in two ways: initially, too much cash tied up in a bad buy, and less cash coming in down the road.
Another helpful tip: if you are going to monitor sales by category, then you must buy your inventory by category, and not by brand. It's much easier to create and maintain budgets this way.
Pay close attention to your P & L's. If you understand your numbers, you can drive and predict your cash flow, top line revenues & bottom line profits. Most entrepreneurs don't use a predictable cash flow system. They might look at their numbers, but they don't understand how to interpret them.
If you would like to discuss this further at no charge, use the link below. I offer a free 30 minute consult to first time callers.
Here are some other thoughts concerning your question.
I have 15+ years experience in the retail environment with everything from small mall kiosks to the biggest box retailers. In that time I have held just about every job from temporary stocker to various management positions.
Besides what others have mentioned I would have to add that product availability, customer service, and pricing are all very important to your success. Your place of business has to offer something more to get people in the door. Hopefully that something different will be having a consistent supply of your inventory, having superior customer service, and competitive pricing.
Not sure of your product mix, but you will be competing against some big chains in the health market. On the larger side you have to compete with every large retailer with a health and nutrition section in their store. These large retailers already have the foot traffic so your business has to give their shopper a reason to leave that store and come to yours.
Having worked in those large retailers I can tell you some of the pain points for consumers that I have had to deal with that your business can use to its advantage.
In-stock. You need to ensure that your inventory is on point so you have product on your shelves. You can walk into any large retailer and see big empty spaces on their shelves. I have seen nothing infuriate and alienate customers more than not having the product they want on the shelf when they want it. You don't want to give your customers a reason to leave and not having product always sends them out the door.
Customer service. Payroll is a huge expense and concern when operating a business. I have seen many occasions when payroll is cut so deep that customer service suffers. You don't want to run into a situation of where your inventory doesn't make it to the floor because you have no one to stock your shelves.
I have also found that in smaller stores your customer service has to be more proactive than reactive to succeed. Greeting customers as they come in, asking if they need assistance, and up-selling are all things that help provide greater service and make the customer feel appreciated. No big box retailer can compete with great customer service on a consistent basis.
Pricing. People are willing to pay more for a better shopping experience, but you will still need to remain competitive with pricing your products. I would watch how you clearance out merchandise as well. You don't want to train your customers to wait for your clearance sales to buy your product. I have seen too many times where customers simply wait for the prices to drop because they know the clearance schedule of the store they are in.
Of course there is the marketing as well, but I would need to know a little more about your unique situation.
I would love to talk to you more and get some greater details. If you're interested feel free to schedule a time to chat.
Good luck and I wish you great success.
Bring in nutritionists, health coaches and other practitioners to offer one-on-one consultations on a revenue share basis. Allow your experts to host evening talks on various health topics as a way to promote their services and offer a valuable educational tool for your customers. Think of your store more than just a retail outlet; rather make it a community and natural health and healing hub!