How to Turn Your New Store into a Profit Powerhouse – Fast!
By Richard Parker: President of The Resource Center for A Retail Business™ and author of How To Buy A Good Retail Business At A Great Price© .
The days after you buy a store are critical. So don’t just sit back and wait for customers to beat a path to your door. Apply these strategies instead to boost profits fast:
Strategy One: Turn unwanted inventory into cash. It’s your business now! That means you are free to stock the items that you want to sell. In many cases, you will want to liquidate some of the Seller’s inventory. Of course, you could have a big sale and dispose of it quickly at low prices. But before you do, evaluate any damage that approach might cause to the new image you want to establish for your store. Another approach? Sell unwanted goods on eBay. Just be sure to sell them as a lot, if you can. Handling individual orders and shipping individual items is not the way to start off your new business enterprise on a high note!
Strategy Two: Negotiate aggressively to get better deals and terms from vendors. As the new owner, it is your right to reopen price discussions with the distributors and suppliers for everything you sell in your store. Also, negotiate with vendors for longer repayment periods for the first few new orders you place and if applicable, on any monies owing for items that are already in stock in your store. This allows you to direct money from your sales into inventory, store renovations and other improvements that will provide a platform for greater profits in the future.
Strategy Three: Apply pressure-point marketing to snag new customers. The “under new management” period is a great time to get your store into customers’ routines and buying patterns. Get aggressive! Put up huge signs announcing reduced prices on some hot-selling items. Or give away free coffee or other items. The week after you apply these strategies, your business will be making more money than the previous owner thought possible. Obviously, if announcing new ownership could hurt sales, then you do not want to be overly aggressive about it.
Strategy Four: Co-promote with other merchants in the area. Don’t wait for customers to come to you. Instead, find them where they are already shopping! If there’s a supermarket across the street from your station, make a deal with its manager to distribute their coupons at your store if they’ll distribute yours at their store. Forge similar deals with other area merchants. Cast your net wide and pull those dollars in!
Strategy Five: Make it a family affair. Even if you don’t plan to have your family members work for your business indefinitely, get them to volunteer during your first few months of operation. It’s a great way to reduce payroll costs during the first critical months of ownership.
Strategy Six: Immediately cut underperforming products. If you analyze past records, you will discover that certain items outsell others by a margin of at least 2:1. As a new owner, consider cutting slow-selling items for your first few months of operation. You can always reintroduce them after you are generating steady cash flow from hotter-selling items.
Strategy Seven: Apply some basic retail strategies to boost retail sales. Put your hottest-selling products on end-of-aisle displays, or right inside your entrance. Think seasonally too. In winter, put seasonal items (warm clothes, fireplace logs, or snow-melting pellets) where people can’t miss them. Apply similar strategies in summer. If you can apply similar strategies to only four or five of your top-selling products as soon as you take ownership of your store, you will see a marked upturn in your bottom line.
This article represents a fraction of what you’ll learn in How To Buy A Good Retail Business At A Great Price© - the most widely used reference resource and strategy guide for anyone thinking about buying a retail store. Read a detailed listing of what you'll learn.