During harsh economic times it is the savvy businessman that not only survives but flourishes. Be smart in your purchases, keep your eyes on your money and market directly to your customer base to grow your business.
Buying Smart makes you Money
There are 2 ways to make money when you sell something. You obviously make money if you sell the product above your landed cost. However, what so many people do not realize is that you made money much earlier in the process when you bought the product for less than you bought it before.
Lowering your cost is a subtle but effective way to increase your bottom line. While it may not be apparent in the near-term the effects of buying smart will produce results as you sell the product.
I am not talking about lowering your cost and keeping the same margin %. People do this a lot when they make a quantity purchase to build an end cap display. While this is great for an ad or short-term promotions think about the extra profit that will be made when you put this discounted product back on the shelf at regular price.
I am talking about lowering your cost and selling the product at your normal sale price. When you do this you dramatically increase your bottom line.
Keep an Eye on your Money
During harsh economic times employee theft goes up. Already, the main source for inventory shrinkage is employee theft. When economic times get tough employee theft rises dramatically. Employees are being squeezed like everyone else. This forces people who normally would not steal to do things totally out of their normal character.
If you do not already have a computerized point of sale system installed in your business you should consider investing in one. Yes, I know money is tight but if you don't put security measures in place what money you have will disappear.
In the POS business it is a common occurrence to see business owners with more partners than they realize. It is these additional partners who take their cut before expenses that drive businesses into bankruptcy. The partners that I refer to are your employees who help themselves to your cash and do not share in the expenses of the business.
Market Directly to you Customer Base
This is as old as selling itself. Market to your existing customers to build repeat customers and a solid business.
One of the things wrong with too many companies is that they work so very hard to get someone to buy but don't spend any money keeping the customer. Studies have been done on the investment to obtain a customer and it is staggering. It is also staggering to see how little attention is giving to the retention of these same customers.
Know your customers and you will grow you business. Know their buying habits, their likes and dislikes. Pop quiz what are the top 5 selling products in your business? You may actually know these. If so, congratulations but don't rest because here comes the 2 nd question. What are the 5 worst selling products you have in your business?
If your customers don't like a particular product then why do you have money invested in stocking it? Knowing what your customers don't like is just as important as knowing what they do like.
Direct mail works. Mass E-mail works and does not cost you a dime. Be creative in how you obtain E-mail addresses of your customers but build your list and then market to it. Offer them monthly specials, coupons or even things as special menu items if you are a restaurant or Internet only discounts for retail shoppers.
Disclaimer: All information on this site is provided for informational purposes only! By no means is any
information presented herein intended to substitute for the advice provided to you by any health care or other professional
or organization.
