Friday, November 30, 2012

Running Retail Businesses in a Bad Economy - Four Steps to Success

If you’ve always dreamed of owning a boutique or retail shop, or you already have one and need to revive business, we have some valuable information for you.

According to the U.S. Bureau of Labor Statistics, nearly six out of every ten businesses close their doors after just four years of operation. There's no denying that operating any type of business today is difficult and sometimes risky and retail businesses come with their own unique list of difficulties and risks.

The current down economy only serves to amplify these risks. However, some experts agree, there are four separate and distinct issues new businesses should properly address. Ignoring these issues can potentially result in poor sales, profit loss and even bankruptcy.

1. Playing the Price Game

Research shows approximately 66 percent of all purchase decisions are made in the store and
fifty-three percent of those in-store sales are generated through impulse purchases.

When closely examined, this is extremely valuable information. If you can get customers in your store then you have a fifty-three percent chance of making a sale from everyone walks in the door. The way to measure this is to divide the number of days the store is open by the number of sales for the month. Then take that number and if the number is below 10 then you need to move to a busier location. That's correct, it may be necessary to consider changing locations.

A much more acceptable sales formula would be: 24 days / 300 customer (including the ones that didn’t buy anything) equals 12 people per day. Most stores don’t have a clue how many visitors they receive a day. They often only keep track of sales, but you can't make sales unless people walk in your door.

There are some excellent low-cost techniques that can help you gain 30% more foot traffic. These include partnering with affiliates. There are often other local businesses in your area that you can trade customers with you, i.e. joint mailer databases. If you’re a clothing retailer, you can collaborate with a high-end exclusive footwear company and vice versa.

2. Finding Unique Items that are Exclusive to the Store

Offering exclusive items, only available in your store, ensures customers will buy from you. Conducting research to gauge what specific items customers are searching for and finding out if these items are available in nearby stores is crucial to business success. Finding unique items to carry in your store is an excellent way to get customers in the door.

3. Be Aware of the Changing Demand

Similar to the above step, offering items that customers actively seek is critical to maintaining steady customers. Keeping current with styles, product updates, technological advances, etc. is important for businesses. Customers demand updated, modern and fashionable products and it's the company's responsibility to provide them. Customers will go elsewhere if their demands aren't met.

Ask yourself if you're still doing the same things you did even just a couple of years ago. Find out what your competition is offering customers. It can be financially devastating to businesses not to progress and grow. Keep it fresh and your customer will love you for it.

4. Proper Sales Team Training

This is one of the most important points to make. Entrepreneurs begin their business because they had vision and a dream. They're passionate about their business and know everything about their company, products and services. When owners decide to hire a sales team to assist with the daily operations they often assume the team will be just as passionate and knowledgeable. Unfortunately that's often not the case.

Proper initial orientation and ongoing professional staff training is critical for success. Ensuring that your sales staff is adequately trained in the most effective methods of assisting customers and closing sales by utilizing reliable sales techniques can mean the difference between success and failure in business. Sales staff must be fully knowledgeable about your business products and services in order to cater effectively to your clients.

Owning and operating a retail store or boutique is a dream for many entrepreneurs. Implementing the above steps will greatly reduce the risk of failure.

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