|Growing your business: an internal look|
|Written by Scott Etheridge|
|Friday, 13 March 2015 10:23 AM America/New_York|
Analyze 5 key areas to maximize revenues for your store
Growing your business takes strategy. How often does that strategy turn to looking inside your store’s four walls? Are you first analyzing what could be improved internally?
As with any difficult business decision, strategic management requires manageable action. To start your internal analysis, there are five main areas to consider:
• Investing in a Point of Sale system
With the number of new and popular backlist titles available each year, it seems impossible to effectively manage your business without a POS system. Implementing the system that best fits the needs of your business is the first step in growing your business through internal improvements.
Martha Brangenberg at Charis Christian Bookstore in Largo, Florida, believes strongly in the value of the POS.
“Using a POS system helps me keep my sanity! Having the Christian books database at my fingertips allows my staff to speak knowledgeably to our customers.”
Steve Pickering of Lemstone Christian, a Parable Store in Marion, Iowa, also sees the value of the POS.
“At any one time, you can value your inventory by vendor, category, department number and more,” Pickering said. “Managing an open-to-buy would not be possible without a POS system that can calculate on hard quantities and cost.”
Understanding your store’s inventory levels can free up open-to-buy dollars, ensure you do not run out of stock on top-selling titles and help you better balance your title category/publisher inventory.
In addition to POS systems and inventory management, revitalizing your publisher-to-overall-wholesale-dollar ratio is imperative. Let me help break it down:
1. Write down your total business revenue for last year.
2. Divide that in half (average margin). This will act as your baseline.
3. Factor in the number of turns you want for your inventory per year (A healthy number is three turns per year).
4. Next, break out the revenue your store makes by each publisher, in dollars. Then convert these figures into percentages.
5. Now, look at the dollars made in each category (Bibles, Children’s, Fiction, Gift, etc.) by each publisher and again convert these figures into percentages.
6. Finally, compare inventory dollars in each category to the publisher’s share.
After appropriately calculating your publisher-to-wholesale dollar share for each category, implement cycle counting on your inventory. Cycle counts can be done monthly, quarterly or seasonally and will help maintain your stock levels, showing areas that are in need of inventory reduction. Remember, each publisher handles returns differently, so work with each company separately to understand their process.
Here is a suggested monthly cycle rotation for your store:
Week 1: Bibles, Reference, Curriculum
Week 2: Trade books
Week 3: Children’s
Week 4: Gift
These internal preparatory actions will now allow you to grow your business’ revenue. Your final action is to ensure that your store’s shelves are stocked with new titles upon their release date. Anytime a customer visits your store and does not find the title they are looking for, the likelihood of that customer returning on a later date to buy the book is slim. Many times, customers will not even give you the opportunity to order them a copy, because they can simply do that themselves. Having the newest releases available keeps your store relevant in the eyes of a consumer, in addition to stocking the appropriate mix of best-selling backlist titles.
Growing through increasing revenue is the goal of most for-profit organizations. Though building revenue can be challenging and may mean implementing a change in your store, consistent internal evaluation is a must and will benefit you in the long run.
Benjamin Franklin had it right. “Without continual growth and progress, such words as improvement, achievement and success have no meaning,” he said. Taking action and committing your store to an internal review will make your business more profitable, helping you become a destination point for your community.
With more than 30 years of experience and numerous awards, Scott Etheridge is an expert in sales and development. A 16-year veteran of the Christian retail industry, Etheridge has produced top sales accolades, including 14.8K Twitter followers and a Klout score of 61. He serves as manager of sales development at HarperCollins Christian Publishing, and is responsible for promotions and sales analysis. Connect with him on Twitter at @scottetheridge.