Retail Survival Post COVID-19 (Part 2)
Written by CMG News Contributor, Doug Carleton
As the economy creeps into reopening, planning must become like breathing. You have to continually do it to survive. As of mid-June 2020, as this is being written, some states are reporting dramatically increasing numbers of cases of the virus. We are being “carpet bombed” every day with virus news – more and more of it becoming worrisome – and your customers are seeing this information. As desperate as people are to get out, it could add a slight increase in caution to the desire to go out and shop. As a retailer, planning is going to be even more critical if the virus begins to increase dramatically because the economic recovery is going to keep being pushed farther and farther away.
1. PLANNING SALES
a. Plan your sales for at least three months.
b. Sales should be planned by dollars, units, and classifications.
c. The plan should be by week in order to make changes quickly to increase or decrease to improve your business.
d. Your initial plan should be very conservative.
2. PLANNING INVENTORY
a. Inventory should be planned by month.
b. Based upon your sales plan, how many weeks of sales do you need on hand?
c. Based upon your inventory, how many weeks of sales should you have on order?
d. Will vendors expand their methods of payment? Only use credit cards? Prepay? Are they worried about their future?
3. PLANNING EXPENSES
If your business is growing, expenses beyond things like inventory, etc. become even more critical. Every expense should be analyzed in as much detail as possible.
New customer service ideas
Communications with your customers
Your number one expenditure should be your online presence. YOU MUST BE ONLINE.
a. Facebook and Instagram are critical. If it takes someone to manage it, it is that important.
b. Your website must always be updated and fresh. This is something that is easy to lose sight of but can go stale fast.
c. Direct mail is powerful. It may seem a little prosaic in the world of Facebook, Instagram, and the like, but done right, it can be tremendously effective. It is the most effective medium for things like special offers or announcements.
The above, done well, should be 80% of your marketing.
Reducing your number of employees
Converting employees from full-time to part-time
Speaking to your landlord about a decrease in rent for the next three months
Reducing wages and/or benefits for the next three months
Can some of work be done at home?
Can you get better terms on your purchases?
Can you reduce your square footage?
Can you combine positions?
Slightly edited excerpt from the "Survival Guide for the Retailer in a Post COVID-19 Economy" by Doug Carleton and Steve Spiro. If you would like a full copy of this guide, send Doug a message with your email address. There is no cost.
This blog entry is a slightly edited excerpt from Doug Carleton's 'The Daily Life Of A Small Business Owner' series. Doug is a mentor with SCORE, Startup Virginia, and Lighthouse Labs, and has 25+ years of experience in small business finance including 12 years in SBA lending. To contact Doug directly, please email him at email@example.com.