Ten ways you can save money in your retail businesses that too many retailers ignore

Saving money is something all small business owners want to achieve, when it suits them, to make the business more profitable.

When it suits them is the key phrase. I don’t want to sound bratty but I often see situations where the retailer, maybe a newsagent, maybe not, chooses to ignore a money saving opportunity because it does not suit them.

The thing is, money saving opportunities need to be embraced without the qualification of it suiting. I get that some money saving opportunities have personal implications. However, if saving money matters, these personal implications will be parked.

Here are ten money saving ideas for any retail business:

1. Buy better. One of the biggest overheads for a retail business after rent and labour is underperforming and dead stock. Buy better. It is easy yet often ignored because it is seen to be hard work. It’s not.
2. Stop buying what you like.
3. ‘Do not buy just because you like the rep. The numbers must work.
4. Stop sponsorships of local groups that do not benefit the business.
5. Stop advertising in the local paper unless you have measured success as a direct result from the advertising.
6. Cut the roster based on the commercial needs of the business rather than keeping people on to maintain friendships.
7. Don’t use a shopfitter. Next time you refit or even partially refit, use off the shelf materials and save money.
8. Look at your hours. If you are not making money early or late in the day why be open.
9. Cut with tradition. Traditional decisions often see a specialty retail business, like a newsagency, hang on to products and services to be true to the shingle, long after they made money. Break with tradition and cut these loss making activities.
10. Stop suppliers ordering for you. Their need may not match your need. Use your technology to order and you should see a reduction in inventory investment by 10% or more. That is cash freed up for you.

If you are in a business where every cent counts, look carefully at this and go further, make your own. The best opportunity to cut costs is when the business is open. Once you have gone under or walked away it is too late.

Management decisions in retail need to be data driven. 100%. Take away the emotion, friendships and other non data related factors. Savings should follow.