Retail is an industry that runs on razor-thin margins where, in essence, every second counts.
Especially now, in light of the coronavirus pandemic, keeping your costs as low as possible is vital to ensuring your business keeps its head above water as the pandemic runs its course.
So, how can you help your business do exactly that – keep its costs down while safeguarding itself from the pandemic?
Well, that’s where we can help. While some financial outlays are simply unavoidable, the good news is that there are several areas where you can make cutbacks and save money without it affecting your business too drastically.
In this article, we point out these key areas for you, highlighting some of the best ways to keep your company’s cash flow management as healthy as possible.
1. Refinance Your Existing Debt
When you were first setting yourself up as a business, chances are you probably took out a loan of some kind to get yourself up and running. This, in turn, meant you were already in debt before you’d even had the chance to open up your shop doors.
So, rather than paying off this debt at the high-interest rate you initially took it out with, why not have a look at refinancing or consolidating any existing money you still owe?
By choosing to refinance, this will enable you to pay off your debt using a new loan with better terms, based on your now-improved credit history. Consolidating your debt, on the other hand, will allow you to turn multiple streams of debt into one more affordable monthly payment.
2. Invest In Technology
While it may sound a little strange from a money-saving point of view to invest in something new, hear me out.
As I mentioned earlier, time is money in the world of retail. Therefore, the more you can cut down on time, the more you will save in terms of money.
Now, with that in mind, technology has come on leaps and bounds in the past few decades.
Gone are the days of needing to rely on spreadsheets or old-fashioned content management systems (CMS) to keep on top of processes. In today’s world, automated AI-based systems have revolutionized the world of retail, helping businesses across the globe save an abundance of time.
According to IBM Institute recent Business Value study, over 80 percent of executives in both the retail and consumer products industries expect their companies to be using intelligent automation by 2021.
By taking the time now to hone the internal processes your company uses, while you may need to pay more for it upfront, you could end up saving a lot of money in the long run.
3. Don’t Rush Scaling Up
In wake of the coronavirus pandemic, you will have probably been left feeling incredibly frustrated at the impact it has had on your business’ scaling up process; years of hard work suddenly gone in a matter of weeks.
Now, while it may be tempting to rush back into getting everything back to where it was pre-pandemic, it’s important to take your time and think sensibly.
The world has changed drastically over the past year, after all, so any potential plans you had in place before the pandemic may now have become redundant and – put simply – a waste of money.
If you are only handling enough business right now to warrant one delivery van, for example, don’t buy another one on the assumption that you’ll need to eventually.
Similarly, don’t rent out a huge warehouse you won’t be able to fill. Consider using smaller units instead and, as with any business decision you make, weigh up the cost-benefit beforehand. You may save yourself a huge amount of overhead costs in doing so.
4. Rethink Your Advertising
While it may fill you with immense pride seeing your business advertised on TV or a giant roadside billboard, both of these forms of advertising can be incredibly expensive and, when compared against more modern channels, a lot less value for money.
“Since early 2015 there has been a visible advantage in the focus on digital marketing and advertising over traditional channels. In general, marketers have been reducing their budgets for traditional advertising, while growth in expenses on digital marketing remained positive.” (Statista)
As such, why not consider utilizing some of these more modern low-cost advertising channel alternatives instead?
Whether it be SEO, social media advertising, a paid search campaign, email marketing, pay-per-click advertising or influencer marketing, there are several highly effective methods now available for you to not only improve your online presence but also increase the number of conversions your business receives.
This is especially important in light of the pandemic as well, since experts are currently predicting a huge increase in online shoppers over the Q4 shopping period.
Therefore, by utilizing these advertising methods cost-effectively now, you could actually end up reaching more customers than you would have done via more traditional methods.
5. Optimize Your Inventory
One of the more obvious areas to cut back on in retail specifically is your inventory.
However, getting the balance right can be much easier said than done; too much inventory and you could waste money on storage and depreciation. Too little, and you could miss out on being able to hold sales and attract new customers.
To help combat this, inventory management software – like our very own Rain Retail POS System – can help you recognize trends and plan your upcoming inventory management needs.
This system, coupled with the AI-based software mentioned earlier, could provide you with an accurate account of consumer spending habits while setting up automatic reminders to notify you about how much inventory you’ll need to satisfy demand.
Saving money as a retail business owner is important at any time but, in wake of the coronavirus pandemic, it’s perhaps more imperative now than ever before.
While you may have already had no choice but to make cutbacks in other areas, such as staff or office-based costs, there are still several ways to keep costs down while improving the way your business is run.
By investing in relevant software and technology, and looking at ways to make your debt repayments more manageable, you will not only save yourself a lot of money but you’ll also put your business in the best possible post-pandemic position at the same time.
Now, what’s not to like about that?