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See benchmarks - and five year trend charts! - for the six key ratios every retailer must monitor. See how your store compares.
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Opening a store?
Adding stores?
RetailStartup.com
Opening a store?
Adding stores?
RetailStartup.com
Start now! Just $24.95/month
Total Access: Members-Only Collection
M2M |
On-demand, 24/7, whenever you need it.
All for just $24.95 per month.
GMROI & Turns Calculator
Key Ratios Calculator
Open-to-Buy (OTB) Calculator
Three major sections:
P&L and Balance Sheets; Inventory Buying Plans; Cash Flow
"Learn" in short, self-paced chapters
"Practice" (e.g., take a quiz!)
"Apply" to your own business
Case Study: The I. M. Surviving (?!) Co.
Plus much more!
Start Now!
Follow these 5 steps. Drive your inventory to a targeted, well-conceived ENDING INVENTORY level at the end of each month.
- Determine precisely what annual inventory turnover rate your store(s) should have to be profitable and provide an adequate cash flow. (For free guidance, find your segment under the "Retail Benchmarks" tab.)
- Next, convert that turnover rate into "days of supply"; i.e., 4.3 turns divided into 365 days in a year equals 85 selling days (of supply) or "one turn's worth of inventory".
- Now, simply guesstimate your reasonably expected sales volume for the 85-day period from April 1st forward, in this example, through June 24. Got it?
- That sales number now becomes your targeted inventory level (at retail, not cost) for the end of June. Now you've got a goal, a definitive number to shoot for which is based on going forward safely.
- But it's only as good as your ability to hit that target. Therefore, with just a limited number of selling days left before the end of June, you can, and must, reduce prices, cut orders, give spiffs to your staff...whatever it takes to drive down your inventory to hit that ending inventory goal. Now that you know what to do, we know you can do it.
And remember: Survival, without profit, through this recession is like halitosis; it's better than no breath at all!
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What Will It Take to Survive This Financial Crisis?
The Answer: C - A - $ - H!
Your #1 responsibility as a retail owner is the survival of your business. Here is a 4-Step Survival Plan that you, as Owner, can put into practice right now.
- CONSERVE Cash
- RAISE Cash
- FIND MORE Cash
- Start with Step #1 again!
Remember, especially in this economic environment, the "old rules" no longer apply. Lenders, vendors, landlords, and yes, even employees, are more open to negotiating. This is the time to find new win-win situations.
Where's Your CASH FLOW Plan?
To control cash in your retail business demands an up-to-date Cash Flow plan. And we mean a basic Cash Flow, that you always have with you. Here are some key reminders:
- Cash Flow plans have just three basic parts: (1) cash coming in; (2) cash going out: (3) the difference.
- Cash Flow plans are projections. You are looking ahead a few months, at expected sales (cash coming in) and purchases and expenses (cash going out).
- It's just arithmetic! Just find the difference each month between the cash in and the cash out. Now, you can start to plan, manage and control the cash!
- Update your Cash Flow plan! It is a living, breathing tool. Many retailers do a rolling three-month or four-month plan. Others actually do a weekly cash flow.
What Will It Take to Survive This Financial Crisis?
The Answer: C - A - $ - H!
Your #1 responsibility as a retail owner is the survival of your business. Here is a 4-Step Survival Plan that you, as Owner, can put into practice right now.
- CONSERVE Cash
- RAISE Cash
- FIND MORE Cash
- Start with Step #1 again!
Remember, especially in this economic environment, the "old rules" no longer apply. Lenders, vendors, landlords, and yes, even employees, are more open to negotiating. This is the time to find new win-win situations.
Where's Your CASH FLOW Plan?
To control cash in your retail business demands an up-to-date Cash Flow plan. And we mean a basic Cash Flow, that you always have with you. Here are some key reminders:
- Cash Flow plans have just three basic parts: (1) cash coming in; (2) cash going out: (3) the difference.
- Cash Flow plans are projections. You are looking ahead a few months, at expected sales (cash coming in) and purchases and expenses (cash going out).
- It's just arithmetic! Just find the difference each month between the cash in and the cash out. Now, you can start to plan, manage and control the cash!
- Update your Cash Flow plan! It is a living, breathing tool. Many retailers do a rolling three-month or four-month plan. Others actually do a weekly cash flow.
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| How-To Articles for Retailers from The ROI
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| The Top Five Killers of Retail BusinessesPeople who get their understanding about retailing from the popular press or from political rhetoric often believe that declining sales – "Comp store sales are down" – is the death knell of retailing. Surely you, as a retail owner, know differently! (You do, don't you?!) In reverse order, here are the Top Five principal killers of retail businesses. We will examine each of them. While they all need the respect of you, the owner or CEO, your highest priority always must be the #1 slayer. And it just might surprise you to learn what it is. read more ... |
| Retailers: Have Cash When You Need ItWhat is the secret to effective cash flow planning for retail businesses? Understanding the time lag between sales and cash. You may be fulfilling your sales plan, but still be getting caught in a cash flow crunch. The principal benefit of good cash flow planning is that it helps you run your business on your own money—and avoid using as much short-term borrowing, reducing the finance charges that can eat into your profits. read more ... |
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| The Top Five Killers of Retail BusinessesPeople who get their understanding about retailing from the popular press or from political rhetoric often believe that declining sales – "Comp store sales are down" – is the death knell of retailing. Surely you, as a retail owner, know differently! (You do, don't you?!) In reverse order, here are the Top Five principal killers of retail businesses. We will examine each of them. While they all need the respect of you, the owner or CEO, your highest priority always must be the #1 slayer. And it just might surprise you to learn what it is. read more ... |
| Retailers: Have Cash When You Need ItWhat is the secret to effective cash flow planning for retail businesses? Understanding the time lag between sales and cash. You may be fulfilling your sales plan, but still be getting caught in a cash flow crunch. The principal benefit of good cash flow planning is that it helps you run your business on your own money—and avoid using as much short-term borrowing, reducing the finance charges that can eat into your profits. read more ... |
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The Members-Only Collection
The Members-Only Collection
| Use the CASH FLOW CALCULATORNo retailer should ever be without an up-to-date CASH FLOW PLAN. Now, The ROI makes it easy for you. Use our CASH FLOW CALCULATOR whenever you want, 24/7. By retailers, for retailers. Nothing else like it anywhere. read more ... |
| Coping With a Cash Crunch In Your StoreCash is the lifeblood of every retail business. Without cash for inventory, payroll and other expenses, an emergency is imminent. Even a profitable business can experience not having enough cash at the wrong moment. One moment cash is flowing, the next moment it is dripping. Drip. Drip. It’s an emergency when the cash flow stops and paralyzes your store. But if you still believe in the long-term viability of your business and are willing to work toward its success, put these six steps into action immediately. They are the foundation for avoiding future cash crunches. read more ... |
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| Use the CASH FLOW CALCULATORNo retailer should ever be without an up-to-date CASH FLOW PLAN. Now, The ROI makes it easy for you. Use our CASH FLOW CALCULATOR whenever you want, 24/7. By retailers, for retailers. Nothing else like it anywhere. read more ... |
| Coping With a Cash Crunch In Your StoreCash is the lifeblood of every retail business. Without cash for inventory, payroll and other expenses, an emergency is imminent. Even a profitable business can experience not having enough cash at the wrong moment. One moment cash is flowing, the next moment it is dripping. Drip. Drip. It’s an emergency when the cash flow stops and paralyzes your store. But if you still believe in the long-term viability of your business and are willing to work toward its success, put these six steps into action immediately. They are the foundation for avoiding future cash crunches. read more ... |
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| MORE Tools & Resources in the Members-Only Collection
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Now. Learn Basic Retail Finance. At your own pace. 24/7.
Profits & Debt Management - Financial Statements - P&L's - Balance Sheets - Inventory Management (@Cost or @Retail) - Turnover - Buying Plan Budgets - GMROI - Cash Flow - pro formas - Ratio Analysis -
Integrated Retail Financial Plans
The ROI's Online Seminar on Retail Finance Basics is an interactive, self-paced course. By retailers, for retailers. "All it takes is a little desire."
- Learn how the income statement and balance sheet must work together.
- Learn how to do inventory buying plans (Open-to-Buys) at either cost or retail.
- Learn how to do a retail cash flow, one that reflects your buying plan.
Includes interactive content, self-quizzes, printable worksheets, extra how-to articles by retail experts, and a special case study featuring Helen and Irving Surviving of The I. M. Surviving(?!) Company.
Take a Feature Tour 
Feature Tour opens in a separate, pop-up window. Please disable pop-up blockers.
No retailer really wants to pay for bookkeeping or accounting. But it's necessary for two reasons: (1) to accurately satisfy the I.R.S.; (2) to accurately show where the business has been and where it is now.
This second reason is essential for what REALLY matters: doing better in the future!
The ROI has developed The Screening Test for Retail Bookkeepers. As an ROI Member you may download a free copy of that test to use as you interview prospective bookkeepers.
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Cash Discounts
The tenth of each month, for most retailers, is a critical "payables day". Do not miss taking cash discounts, i.e., 2/10/EOM. Consider this: when a payable due on the 10th of the month is not paid until the 30th, it loses the 2/10/EOM cash discount, and "costs" the equivalent of a 36% annual interest rate. (The 20 days taken is 1/18th of a 360 day year, times 2%, equals 36% equivalent interest.) That's why bank loans are relatively cheap.
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Retail Owners...
Need a New Strategy?
Customized • Timely • Objective
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Retail Owners...
Need a New Strategy?
Customized • Timely • Objective
(more info...)
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