How does your store make money?

One of the most common mistakes I see with small retailers is the failure to analyze sales revenue.  They may know top line sales and bottom line profits, but don’t take the time to understand the exact composition of sales.  Are you selling to new or existing customers?  Do you sell more of item A or Item Z or items A and Z together?  What is the average sale or sale per employee?

Ask the typical small store owner if they track Key Performance Indicators (KPI’s-see list below) and they answer, “It’s all in my head.”  With this tracking method, they’re probably missing out on some extremely important -and easy- ways to increase revenue.

KPI’s provide POWERFUL insight that can help determine targeted marketing solutions, pricing strategies, hiring needs, new revenue opportunities and a host of other strategies that can result in increased revenue and decreased expenses.

KPI’s are easy to track with point of sale software by simply inputting correct and detailed information for each customer and learning to pull the appropriate reports daily, weekly and monthly. I find many retailers don’t take the time to learn the capabilities of these systems. For those retailers that don’t have a POS system, I recommend tracking sales manually to get a grasp on the when/what of sales.  It takes some effort but can pay off big in the long run.

How can KPI’s help grow business? Here are just a few examples:

Average Sale/Sale by Category 
I worked with a coffee shop that needed to increase revenues by 10 percent which represented an increase in sales of about $2000 per month. She was going to invest $6000 in advertising to increase traffic to achieve her revenue goal. By knowing her average sale, which was $3.95, we were able to bundle two items as a special at $ 4.75. Just by upselling her regular customers, she was able to increase revenues without spending a dime or giving up any profitability.

Sales by Day of Week/Daypart
By knowing when you are selling (or not selling) you can create a strategy to improve business during peak and non-peak times.  For example, a pizza restaurant offered a daily lunch discount each weekday  Upon  analyzing his day/daypart numbers, we found that Thursday and Friday lunches were triple the volume of Monday through Wednesday. Since business was so good later inthe week, there was no need to continue offering a discount on those days. The owner was able to increase profits during the peak sales days and offer steeper discounts to lure customers during the off days.

New vs. existing clients
A beauty salon client did not track new vs. existing clients or client retention. Once they analyzed their numbers, it was clear they were getting plenty of new clients; they just weren’t retaining them. By understanding that, they were able to implement a two-fold strategy that included customer service training for the stylists to insure greater customer satisfaction- and ultimately their return -as well as a new customer welcome program that offered new clients discounts for pre-booking their next appointment.

Customer profile/demos
Take the simplest customer demo – the zip code. I recently worked with a franchisee for whom the franchisor did a quarterly mailing. In comparing the zip codes of the mailing to the actual client zip codes, we saw that the franchisor mailing list did not match the current client base. Armed with this information,  the client was able to inform the franchisor so they could create a more geographically accurate mailing list and thus, better results from the marketing dollars spent.

These are just a few examples of how understanding the nuances of revenue can help a small business owner create better – and sometimes very easy – strategies to grow business.

Key Performance Indicators
While not all are applicable to each business, here’s a list: 
                Sales per employee
                New clients per week vs. repeat clients
                Sales per square foot
                Average check
                Sales by category
                Merchandise vs. service
                Lead sources
                Sales by day of week/day part
                Sales conversion rates
                Customer profile

Which work for you? Start tracking them today. Learning how you make your money is the first step to making more!

Until next time remember,
You can do this!
Angel

How a field trip can improve your retail or restaurant business!

How does your store make money?

One of the most common mistakes I see with small retailers is the failure to analyze sales revenue.  They may know top line sales and bottom line profits, but don’t take the time to understand the exact composition of sales.  Are you selling to new or existing customers?  Do you sell more of item A or Item Z or items A and Z together?  What is the average sale or sale per employee?

Ask the typical small store owner if they track Key Performance Indicators (KPI’s-see list below) and they answer, “It’s all in my head.”  With this tracking method, they’re probably missing out on some extremely important -and easy- ways to increase revenue.

KPI’s provide POWERFUL insight that can help determine targeted marketing solutions, pricing strategies, hiring needs, new revenue opportunities and a host of other strategies that can result in increased revenue and decreased expenses.

KPI’s are easy to track with point of sale software by simply inputting correct and detailed information for each customer and learning to pull the appropriate reports daily, weekly and monthly. I find many retailers don’t take the time to learn the capabilities of these systems. For those retailers that don’t have a POS system, I recommend tracking sales manually to get a grasp on the when/what of sales.  It takes some effort but can pay off big in the long run.

How can KPI’s help grow business? Here are just a few examples:

Average Sale/Sale by Category 
I worked with a coffee shop that needed to increase revenues by 10 percent which represented an increase in sales of about $2000 per month. She was going to invest $6000 in advertising to increase traffic to achieve her revenue goal. By knowing her average sale, which was $3.95, we were able to bundle two items as a special at $ 4.75. Just by upselling her regular customers, she was able to increase revenues without spending a dime or giving up any profitability.

Sales by Day of Week/Daypart
By knowing when you are selling (or not selling) you can create a strategy to improve business during peak and non-peak times.  For example, a pizza restaurant offered a daily lunch discount each weekday  Upon  analyzing his day/daypart numbers, we found that Thursday and Friday lunches were triple the volume of Monday through Wednesday. Since business was so good later inthe week, there was no need to continue offering a discount on those days. The owner was able to increase profits during the peak sales days and offer steeper discounts to lure customers during the off days.

New vs. existing clients
A beauty salon client did not track new vs. existing clients or client retention. Once they analyzed their numbers, it was clear they were getting plenty of new clients; they just weren’t retaining them. By understanding that, they were able to implement a two-fold strategy that included customer service training for the stylists to insure greater customer satisfaction- and ultimately their return -as well as a new customer welcome program that offered new clients discounts for pre-booking their next appointment.

Customer profile/demos
Take the simplest customer demo – the zip code. I recently worked with a franchisee for whom the franchisor did a quarterly mailing. In comparing the zip codes of the mailing to the actual client zip codes, we saw that the franchisor mailing list did not match the current client base. Armed with this information,  the client was able to inform the franchisor so they could create a more geographically accurate mailing list and thus, better results from the marketing dollars spent.

These are just a few examples of how understanding the nuances of revenue can help a small business owner create better – and sometimes very easy – strategies to grow business.

Key Performance Indicators
While not all are applicable to each business, here’s a list: 
                Sales per employee
                New clients per week vs. repeat clients
                Sales per square foot
                Average check
                Sales by category
                Merchandise vs. service
                Lead sources
                Sales by day of week/day part
                Sales conversion rates
                Customer profile

Which work for you? Start tracking them today. Learning how you make your money is the first step to making more!

Until next time remember,
You can do this!
Angel

How a field trip can improve your retail or restaurant business!

Angel's 90 Day Challenge - and it's not what you think!

It's May 1 and the start of my personal 90-day challenge to bring local retail and restaurant owners an insane amount of free content to help you launch, grow or save your local retail or restaurant business! Follow me for all the great info: facebook.com/angelciceroneretail instagram.com/angelcicerone linkedin.com/angelcicerone

4 Questions for Business Clarity

What's a sticky pad moment? It's when you have ideas, thoughts, questions or answers important enough to  jot down and keep in front of you at all times.

As business owners, we can get sooooooooo caught up in the day- to- day we forget the original vision and goals we had for our businesses and ourselves.   Dealing with employees, inventory, customer service, scheduling, finances, marketing …it’s a lot. And these daily details are not just an inspiration suck, they can easily lead us into a maze of confusion!

That’s why it’s always a good idea, no matter where you are in your business life cycle, to take a minute and revisit these four important questions; questions which, by the way, have nothing to do with money. They are about understanding the essence of your business and your relationship with it.

While I won’t call them magic questions, their answers will certainly bring clarity to your business and life and that’s an amazing gift!

Question 1
What makes your business unique, different or special?

Do you have an unusual or proprietary product? Perhaps you’ve put your own twist on something like the mini-cupcakes that make people line up at Melissa’s bakery.

Maybe it’s your store design.  Or pricing. Or the way you wrap things in eco-friendly knapsacks. Maybe your business is family-owned.

Or your signature product is apple cake baked using a 5 generation-old family recipe.Or your staff is so knowledgeable people wouldn’t consider going anywhere else.

You get where I’m going.

But if you can’t come up with a differentiator, a meaningful one, I’m going to suggest you stop right here. Take a breath and put some serious thought into answering this question. If, after careful thought, you find your business is too general and unfocused, you’d be best served by doing some serious brainstorming to fine tune your concept.

Question 2
Who is your target audience? Be VERY specific`

Who you sell to (and their reasons for buying) are the pulse of any retail or restaurant business. “Everyone” isn’t a demographic and casting a broad net is dangerous in this day of market segmentation and personalized communication.

A boutique for women 25-49 probably won’t be met with much enthusiasm. A boutique for women 25 -49 that specializes in conservative clothes for work and offers a personal stylist will probably do a whole lot better.

Get in touch with that target niche. Find your tribe. Then do everything you can to get to know them and show them your love.

Question 3
What is the life you’d like to lead as a business owner?

Success in business isn’t just about making money (although profitability sure does make life a whole lot better!)  What do you want your life to look like? Do you want to work less? Or expand to 1, 5 or 100 locations? Is your end goal to sell? Or leave it to your kids?

Each one of these options requires a slightly different route and it would be a shame to work so hard and end up having detoured from your original goal. Defining your life goals help to define your business path.

Question 4
What do you need to know more about to make that happen?

I’m not exactly sure why but so many independent retail and restaurant owners fail to hop on the lifelong learning express. It might be fear, lack of time or even shame that they don’t know it all. Frankly, I don’t really care about the reason. I just care about the results.

In another day and time, learning the things you needed to know to succeed in business was important. Today, thanks to the lightning fast pace of change in our world, it’s critical. So what do you need? A crash course in accounting? Inspiration for marketing.

A solid social media primer? A better understanding of omnichannel sales? Training in sales, customer service, negotiating a lease?

Whatever it is, go out and get it. Thanks to our friend, the internet, there is so much available at little or no cost, available 24/7 so you can squeeze it in whenever you have the time.  

Do me a favor. Shoot me an email with the answer to this one. – success@angelcicerone.com. I am always looking for great free resources on the topics of interest to you and this will help me identify the types of training you’re looking for.

Final step

Now, take your answers to these 4 questions and jot them on a sticky pad. Place that note somewhere where you can see if every day.  And as you make decisions about your business, you can make them within the framework of your answers to these questions. If it doesn’t help your business become more special, appeal to your target customer, get you closer to leading the life you want or give you a better understanding of how to achieve success– there’s no need to move forward or waste time. Clarity is one of the keys to achieving goals and these four simple questions will help you stay on track!

Until next time, remember
You can do this!
Angel

Would you like a free 4 Questions Worksheet to answer these questions? Just click here.

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