As we move into week 2 of our series on how you can ensure your Retail business succeeds post-pandemic, we want to explore the business’s internal situation having completed our external review of the retail landscape last week. In case you missed the first part of the I.M.P.A.C.T framework, you can find the link to the first part of the I.M.P.A.C.T Framework
Today, we will be looking at the 2nd point of our I.M.P.A.C.T framework journey, which stands for “Manage”.
Once you understand what the retail landscape looks like externally, it’s time to look inside the organisation to determine what is the state of the business. Most would start to look at the financial position of the company with the common emphasis being placed on the amount of money that they have to carry on with business operations. How much working and operating capital do we have in the company’s coffers to run the business if there is expected to be zero (0) sales for a prolonged period of time perhaps for the next 3, 6 or even 12 months. Do we have enough to pay for all the expenses of running our business for the next 12 months with zero sales? Some businesses would not find this a problem but I suspect most retail businesses would.
This is where you as the owner need to start scenario planning. Here are a list of questions you need to ask yourself:
1. How much does it cost me to operate my retail business in a month? This would include all your costs such as rent, salaries for your staff & yourself, the cost of goods, etc. Be as complete as possible as you do not want any unforeseen operational costs to sneak up on you later. Create a spreadsheet/chart and attributed the amount of cash each cost takes up to help you to visualise where your cash is going to, in the running of your business.
2. How can I now identify areas of my business to streamline or cut back? The number one area where most retail owners will look to cut back will be instituting pay cuts or even furloughing their staff. It is important to understand before instituting any cost-cutting measures especially in the area of staff would be that customer service will be impacted. As such, before making any cuts to your business it is important to understand how this cost-cutting measure will affect your ability to service your customer. If cutting back will result in a drop in customer service then you need to look for other areas to cut back on, be it streamlining your inventory or even reducing the amount of space your retail space needs. Also, now would be a good time to identify if there is any part of your retail business which you could automate such as investing in a chatbot to handle simple customers service requests or even introducing cashless payments or self-checkouts to reduce the amount of time each customer takes when dealing with your staff for payments. Although you may think these solutions could be costly in the short term, you need to understand staff costs are something that will never go down for the foreseeable future and will continue to represent a significant part of your cost of operations.
3. What are the current assets and resources which you have right now within the company to help you move forward from the current situation at hand? What are your strengths that you can leverage on to effectively get back in the game? Here is the time where you need to consider what it is that your customers love about your business. Is it your customer service or is it the range of products which you carry that they cannot get anywhere else or could it be the way your store is laid out which makes shopping with you easier. You need to ask yourself how can you use these strengths to get your customers back into the store. This is also the time to consider what steps do you need to put in place to ensure the safety of your customers who are coming back into the store to shop with you.
Taking a long hard look at the internals of the business will also present you with an opportunity. What is it you are wondering? Whether you are a glass half empty or glass half full kind of person you have to see it for what it is, this pandemic has exposed to you the weaknesses in your business which would not have otherwise shown itself if things were going great and this situation also allows you to look at your retail business and identify parts of it you do not like and make changes. Trust me, this process can be painful but necessary if you want to survive and thrive in this new post-pandemic retail landscape.
Tune in next week for part 3 of our I.M.P.A.C.T Framework analysis where we put these 2 weeks of information gathering (external & internal) together and develop a concrete “Plan” to move your retail business forward.