When the going gets tough

I have earned my living in retail fashion and related products for over 25 years and I can honestly say that it has been an exhilarating ride. I have met some wonderful people and made lots of friends.

One can experience all the joys of life's experiences in the microcosm of a retail shop over time.

I have had good times and I have survived the bad times. Such is life and how you manage through the bad times makes you appreciate the good days all the more.

It is important to recognise the cause of a downturn. Is it the industry as a whole that is suffering? The economy as a whole may be depressed or maybe your personality type is just not suited to retail.

If the problem is you, the first step to recovery is to identify what you are doing wrong. Step two would be to work out a strategy to counter this problem. Step three should see you implement the remedy. Easier said than done? You betcha, it will always be a challenge.

Start with your stock and see whether it is still saleable. Is your presentation up to scratch? The best stock can look tacky when you have too much. This can happen when the new season ranges come in at once and you have not sold last season's offerings.

A positive move would be to sort through the stock and remove some from the floor. By remerchandising the remainder in the space now available, the shop will look more attractive and interesting. Be disciplined to sell the stock that is already paid for. Identify really slow moving stock and turn it into cash as soon as possible. Be ruthless in your markdowns and turn the stock into cash. Remember the first loss is usually the cheapest. Hanging onto bad stock will add to your liquidity problems over time.

So, now the stock is looking good. You need to promote. A wise man once said "failing to advertise is like winking at a pretty girl in the dark. She has no idea you're doing it". Advertising can sometimes be expensive and you may not have the spare cash.

How about instore promotion? Ask your suppliers for some attractive posters. or buy some seasonal posters "new for spring" or "hot summer arrivals" or whatever suits you. Some fresh flowers will improve the ambience. Taking these steps will encourage your customers to frequent the shop more often.

Promote a popular product and encourage your customer to buy more than one. Two at a discount, requires no extra effort and puts more money through your register. Keep your suppliers informed of the steps you are taking to increase business and ask them to participate with you. This will help you maintain your margins.

Take steps to manage your cash flow in troubled times. Ask your bank to supply you with a standard cash flow form that projects your income and expenditure. Make sure that you keep to your forecast.

Now you know what you expect to sell and what you can afford to pay. You still have an ace up our sleeve. Contact your suppliers and your landlord and explain that business is tough and you will be a little slower making your payments. To show your goodwill call their accounts receivable regularly and keep them informed.

Make a point of establishing a cordial relationship with the accounts department. Send postdated payments if required and try to gain an extra 30 days credit. Ask your landlord if he will accept rental in arrears for a period to help you over this difficult time.

See if you can save something on your wage expenditure. Cut back on non-productive hours and reward the very busy hours with incentive bonuses. Consider opening later, closing earlier on quieter days and staying open when you feel there is a greater chance to make extra sales.

So to recap: