I’m pretty sure most of us can agree… Right now, the economy sucks. Interest rates are up, inflation feels like it’s out of control, banks are tightening down on loans and lines of credit, and a lot of our customers are pinching every penny they can. Yes, this hurts big business but the brunt of this stress trickles down to local small businesses. Many of us are experiencing cash flow shortages, reduced customer traffic, and uncertainty about our ability to survive 2023. It’s enough to give small business owners nightmares.
Even though it may feel like you’ve hit a wall, you still have options to keep your business growing. Now is a great time to update your business plan to adapt to our struggling economy. There are plenty of things we can do to give you a much-needed boost in sales, and thankfully most of these are cheap/free and fairly easy to accomplish. Here’s a few ideas to get you started.
Inventory Adjustments
Now’s a good time to pull out the spreadsheets and take a look at how well your products are selling. Focus on the last 3-6 months of sales. The numbers beyond that aren’t necessarily irrelevant, but we need to really zoom in on future sales more than what we’ve done in the past. Notice which products are increasing in sales and which ones are decreasing. For the inventory that isn’t selling as well as it used to, reduce your floor space for that item and cut back on inventory orders. Fill that newfound floor space with your best selling products. This can cut down on inventory expense, and give a little more visibility to the products that your customers are buying.
If you need to increase traffic in your store, take the next step and run a sale on your best products and some related products. For example, if one of your best selling products is Tide laundry detergent you can match it (and display it ????) with a fabric softener. With both items on sale and displayed together, customers will be more likely to pick up both instead of just one at a time. Pairing inventory like this, even when both products are on sale, can help you move more inventory and increase profits.
Sales and special events
Have some inventory that’s building up in the back room? Create a prominent display up front and put it on sale! You have valuable funds tied up in that inventory that’s just sitting there collecting dust. Even if you have to cut your profit margin on that item down to bare minimum, you’ll still be freeing up cash and cleaning out some of the clutter.
Another idea is to create a special event such as an after hours sale or an “early bird special.” For these, mark everything in the store at least 10% off or more (preferably more to give customers the extra incentive to come out beyond their normal shopping hours). You won’t need to add special signs or labels because the discount would be applied at the register. Plan a big promotion in the local social media groups, print out some flyers to go out with every purchase, make sure all of your employees are really talking about this to everyone that walks through the door. If you can, put a poster in the window or banner across the store front to advertise to local traffic. Go big with the promotion, and you can see a big payoff.
Give your floor plan a facelift
When was the last time you rearranged your floor plan? It’s important to do this from time to time because you want your customers to walk through the entire store, not just the one or two aisles they always go to. Quick psychology lesson: Humans are creatures of habit. We tend to fall into a routine and then let our brains zone out while our bodies are actively engaging in that routine. We find a product we like, and then we keep buying that same product over and over because it’s easier than risking a bad purchase. We learn the layout of a store and tend to walk through the aisles on a mission to check everything off of the shopping list, overlooking all of the other products that surround the one item we need.
A floor plan update disrupts your customers’ mindless shopping routines by forcing them to pay attention to what they’re buying. As they are on the hunt for their usual items, the new floor plan forces them to hunt through all of the products that they’ve never paid attention to before. You don’t need to make drastic changes to see results. Move an inventory group down to the next 4 foot section. If you’re in clothing retail, shuffle your racks around to change the normal walking path. Move some of your most popular products to the back of the store so customers are sure to walk through everything you have to offer. Move small, less expensive items up to the register. Give your customer every opportunity to make an impulse purchase.
One thing I am extremely passionate about, to the point of starting a religious movement, is POSITION YOUR REGISTER AT THE FRONT OF THE STORE. This serves several purposes including, but not limited to, customer acknowledgement and retention, shrink reduction, and added sales. Honestly, this is a trigger for me so I’ll write a separate post on this in the near future.
Couple this with the inventory adjustments and sales mentioned above, and you’ll see your average amount per sale increase.
Focus on customer communication
One of the easiest ways to grow your business is to maintain good communication with your customers. Talk to them, show interest in their lives and stories — even if you have to spend a few minutes looking at photos from vacation to see the grandkids. Most important, listen to your customers. They’ll tell you what needs to change in your store. They’ll tell you about their spending habits. And your customers will feel like they’re developing a friendship with you, which brings with it more loyalty to you and your business.
Get involved in your community
One of the biggest problems small business owners face is that they get so wrapped up in providing goods and services to their community that they actually forget to be a part of the community they’re serving. Do some volunteer work with a local organization, get to know your neighbors (both personal and business), find a way to take part in local festivities… whatever you can do to get out and meet the people in your neighborhood. This serves dual purposes: 1) you feel good because you’re now an active part of the community, and 2) you’re making a good impression on potential new customers. Remember, you are the face of your business so make sure your face is seen.
Also, spend a little time in the local social media groups. Facebook has a group for every town (usually multiple groups), so get in there and introduce your business. A word of caution, though: keep your interactions here positive. Snarky comments and a lot of complaining give off the wrong vibe for your business.
Above all, stay positive
Owning and operating a small business is an emotional rollercoaster. All day every day, you’re bouncing through ups and downs and twists and turns that make even the steadiest of hands a little shaky. Today’s strained economy may be creating a lot of stress and struggle, but it’s vital to keep a positive attitude. You’ve made it this far, and you have the tools you need to go even further. Small business owners tend to get very emotional when it comes to the ups and downs of business, but it’s vital to take the emotion out of it. Emotion can create fear, and fear create desperation. Desperation is a breeding ground for obvious mistakes and, ultimately, failure. Worry and fear serve no good purpose in your business, so do what you can to keep a positive attitude even when things don’t feel very positive.
One of the best quotes I’ve heard for business — and life in general — is from the Dalai Lama: “If a problem can be solved there is no use worrying about it. If it can’t be solved, worrying will do no good.”