Hardware Retailing

JAN 2018

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

Issue link: http://www.hardwareretailingarchive.com/i/918565

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Page 53 of 90

January 2018 | HARDWARE RETAILING 49 6 Signs Your Business Might Be Slipping How does a business fail? Economic forces beyond your control often instigate problems, but sometimes failure comes from neglect. More than likely, the downfall of a business doesn't happen overnight. There are typically warning signs that something is going wrong. These six indicators that something might be wrong will help you stay proactive and reverse trends before they become major obstacles, or worse. It's been awhile since you analyzed your financial statement. Your financial statements contain a few key numbers that will tell you exactly how well your business is doing at any given point in time. With the sophisticated POS systems available today, this information can be available on demand. "The key to success is having your finger on the pulse of those numbers and being able to react quickly when something goes wrong," says Ron Cicuttini, owner of Brantford Home Hardware in Brantford, Ontario. If necessary, look for the type of educational opportunities that will help you learn. A great way to get started is through NRHA's Basic Retail Accounting Course. Visit nrha.org to learn more. Employee morale is low. Motivated employees who are excited about their jobs will pump energy into your operation. The opposite is also true. If employees are not motivated to do their jobs, ask why. They might spot problems in your operation you haven't seen yet. Issues with employee motivation can be corrected by offering training or by simple acts of appreciation that show staff you value them. Other times, you may need to replace them. Lack of good staff is not a problem you can sustain for long before it affects your entire business. There's no clear marketing plan for the business. For both Coté and Cicuttini, marketing was one of the important steps of reviving a failing store. If you've stopped making the effort to bring in new customers, then you've limited your growth opportunities. Each market will be different when it comes to finding the most effective marketing platforms, but social media and a website are now the standard. One symptom Cicuttini spotted at the Brantford store was a lack of advertising investment. "We saw very little marketing going on there," he says. "The owners had been cutting expenses, and once you start cutting money from marketing, it's a downward spiral from there." Customer counts are dropping. Anytime you see a drop in customer counts, transaction size or sales is cause for concern. A slide in customer counts usually means customers are shopping elsewhere and that a competitor is doing a better job of attracting their business. It's also a sign you need to look at your store through a fresh set of eyes and ask the big questions, such as "Do I need to remodel?" or "Am I wasting my efforts on a category that isn't selling?" Consider asking another business owner or friend to give you honest feedback about your store. If it's time for a remodel, the money you invest in that project now will pay dividends in the long term. You're satisfied with the status quo. No matter how good you think business is, if you are not looking for new product lines or ways to change your store, you're likely to start slipping backward. "Every winter, we are redesigning pieces of the store or moving things around," says Coté. "We always want to stay fresh and keep customers looking. If we get complacent, we get in trouble." Use your wholesaler markets and other industry trade shows to find new niches and to make sure your current assortments reflect the latest trends and manufacturer product updates. You're overdue for a full-store inventory check. If you're not sure of what's on the shelves, you may be spending too much money and shelf space on items that don't sell and not enough on those that do. Lack of proper products on the shelf results in reduced customer counts because they can't find what they need. Also, if the numbers in your inventory are skewed, that will make it more difficult to use your financial statements to discern the health of your business. You might have a false sense of reality. Start by doing a full inventory of the store. Then, establish a schedule of regular cycle counts so you can be more effective at ordering and have a better sense of your cash flow. 1 4 2 5 3 6

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