Too often, small business retailers including newsagents think their payday will come when they sell the business. It won’t. Thinking it will stops too many retailers focussing on what matters most: daily profitability.
A valuable business tomorrow is built upon the profitable decisions you make today.
For this reason, I have long championed a simple, powerful mantra: Make every day your payday.
This principle sharpens your focus on the single goal of driving business value every day. It provides the lens through which you should evaluate every decision. I encourage you to ask yourself constantly: Does this action add to the profitability of my business today? If the answer is no, it’s worth asking why you are doing it.
The challenge, then, is how to put this into practice.
Here are the actionable strategies I recommend for building daily value in your retail business:
- Optimise Your Roster. Most businesses can find opportunities to lower labour costs without compromising the customer experience. A lean, effective roster is key. Use tech tools, like the recent AI innovation, to reduce hours you pay for.
- Quit Dead Stock. Look at dead stock weekly. Cut what’s not working. Too many retailers do not look at dead stock at all because it upsets them. This denial can cost a business thousands of dollars every few months. Dead stock is one of the biggest drains on profit I’ve ever seen.
- Trade outside what’s expected of you. Don’t stock only what’s expected for your type of business. Offer products people don’t expect to see. This speed bump approach to what you stock can slow people, have them notice, and buy.
- But The Best You Can. Negotiate the best possible terms and always pay suppliers on time to capture valuable settlement discounts.
- Price Strategically. Don’t hesitate to adjust your prices. Mark up as high as you reasonably can without harming unit sales.
- Increase Average Transaction Value. Help shoppers buy more each visit. Loyalty programs, product bundling, strategic product location and multi-buy offers are effective tools.
- Curate Your Counter. Reserve the point-of-sale area for high-margin, impulse-buy items that are easily understood and complement a customer’s primary purchase. Change the counter weekly.
- Deploy Your Best People. Your bets sellers should be always customer-facing.
- Analyse Category Performance. Measure every product category by its gross profit () contribution. Discontinue underperforming lines.
- Sell 24/7. Ensure your business can make sales even when the doors are closed. A functional and user-friendly online store is essential.
- Expand Your Customer Base. Actively promote your business beyond your usual foot traffic and brand recognition to attract new demographics.
- Create Compelling Displays. Use stunning window displays to attract passersby and design in-store layouts that encourage customers to browse beyond their intended purchase.
- Leverage Product Adjacency. Understand what products are frequently bought together. Position them strategically to encourage a deeper, more valuable shopping basket.
Take Ownership of Your Profitability
For me, this is the most critical step. Ultimately, the financial health of your business is your responsibility. It is easy to blame suppliers, landlords, or other external factors, but I’ve learned that profitability always comes down to the decisions you make and the actions you take.
- Pay down debt.
- Always have access to an up to date P&L.
- Keep a clean balance sheet.
A relentless and clear focus on daily profit is the most reliable path to growth. This is far more powerful than waiting for a potential payday from a future sale.
This entire approach relies on one crucial habit: measuring the performance of your business. Your POS software provides the data you need to make these informed, profitable decisions. Use it as the essential tool it is.
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I first shared make every day your payday 17 years ago when I saw that valuations of small retail businesses, like newsagencies, fall. This post today is refreshed and refocussed.
If you’d like to talk about this, I can be reached on 0418 321 338 or mark@newsxpress.com.au