How to survive in retail during this current down turn, every magazine or paper you open is full of the state of the economy and how bad everything is. Likewise, there is almost a sense of glee when reporting on companies that are making drastic cuts in order to stay afloat. Some tips to reflect on - but first:
Imagine your favourite fruit tree, we will picture a plum tree (my favourite). Someone goes mad with the pruning cutter, what happens, do you get any fruit? No, and the result of these cuts, the plum tree will decline and fade away. Let's look at the issue of pruning and make some comparisons with the current economic climate. If you cut to deeply or in the wrong places the business will fail.
There are smart ways to make cost savings, but remember to make sure any cost cuts are a team effort. You are the leader of your business, keep your staff aware of what's going on and always maintain a postive front. Don't make cuts that put the quality and integrity or your organisation in jeopardy.
Perks for management should be the first to go, put salary increase's on hold, cancel all bonus payments. Lead by example and send out the message, we are all in this together.
Take a hard look at cost items. Examples are expenses (hotels etc), equipment purchase, rental cars. Travel for meetings. Stay put, cut out unnecessary travel where ever possible. Use e'mail, the telephone,conference calls as alternatives. If a meeting is vital make them smaller and plan for much shorter travelling time. Car share if at all possible.
Put a hold on staff recruitment, especially in administrative roles. If at all possible combine jobs, even if this is for a short time. Give staff incentives to double up on work as long as they can handle it. Often you will find that you really don't need that extra person, and you will save on overhead costs.
Communicate with your staff, seek solutions from them. Ask people to come up with their own cost-cutting ideas and reward them when they do - by giving a percentage to the one that came up with the idea, or a flat reward, I have done this many times, it is very powerful and works big time.
Review staff salaries and benefits. Tread carefully here and ensure that everyone is sharing the load and be open and fair handed with all. Do not mess around with the morale of your people. Never under any circumstances cancel a celebration, special event or rewards ceremony. It costs nothing to reward employees, lift their morale, pay attention to them and ensure they feel valued.
Insist that your managers/supervisors spend time on the 'shop floor' with employees. Buy them a coffee, send them a note of praise. These gestures of thanks and appreciation keep employees on side and loyal during difficult times.
Consolidate - if you have multiple retail outlets, reveiw them for their overall profit contributions. In some cases, terminating leases and closure of some locations stops the avalanche of expenses. Likewise, if you have planned retail openings, put this on hold and delay the opening this will conserve cash flow and save huge amounts.
Instead of advertising, look at public relations instead. In many businesses in can actually have a better result at a fraction of the cost.
Honestly reveiw and assess your staff, are they all in the correct role for their skill base and talents? Look at ways to re-position and re-train where necessary, they are your direct link to your customers and as such a huge asset.
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Article Added on Wednesday, August 19, 2009
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