By now, you have your year-end financials for 2021. Remember, it always comes with a Balance Sheet! Whether sales are up, down, or sideways, the financial strength – and staying power – of every business is shown on its Balance Sheet. And revealed by its Balance Sheet ratios.
Is there a more difficult everyday challenge? As owners of businesses, we've got all of the issues of the times right on our plates. Think about it:
Is there a more difficult every day challenge than maintaining perspective? We don't think so.
The definition of a good coach is “That person who makes you do the things you don’t want to do, to become the person you want to be.” Given that, we would suggest that the pandemic proved to be a great coach for many retailers. So much so, "Coach P" really deserves being recognized as the Coach of the Year! Think about it. The pandemic forced retailers to do things they had long evaded or delayed (remember “technology laggards?”)
The #1 responsibility of every retailer is to manage and control the inventory. By doing that, you are managing margin, profit, cash flow...also known as success! Managing inventory demands a merger of art – the selection of merchandise – and science – the quantity of merchandise at any given time. And here is a formula that makes the science part accessible for every retailer. All you need is a pencil to do this (remember those?) And it can and should be embraced by every retailer!
Maybe you are aware of this. We sure are! Way too many retailers are just fumbling along, paying everybody else but not themselves. Worse yet, way too many retailers are failing, going bankrupt, even in these "good" times for the economy.
And when a retail business fails, it affects a host of people and entities. Not only do employees lose their jobs, and landlords lose a tenant, and suppliers lose a customer, and a community loses a retailer...the owner(s) oftentimes lose their house, car, savings, everything.
Failure is sickening.
What a scenario. Shoppers buying vigorously, retailers joyously raising sales expectations, and many more anxious lenders offering "cash in 24 hours!" to business owners. Wow! Are these the good times, or what? Forgive us, but today we're focusing on the "or what?" aspect.
We know that retail startups are up, but alas, so too are retail failures; even higher than historical norms.
Yes, the headwinds for retailers right now are real, and plenty difficult. However, it turns out that the underlying causes of failures do not change; like cockroaches, they just endure!
For some time, conventional wisdom has characterized independent retailers as "technology laggards." Not that they are Luddites; it's just that they regarded retail technology as a major expense, especially in human capital. They often were cautious, even skeptical, about the promises of new technology being pitched to them. When the pandemics arrived, many retailers responded rapidly and smartly. In scramble mode, some crammed five years of technology adoption into five months! Now, as the lockdown restrictions recede, the conventional wisdom eagerly suggests that consumers of all ages will continue to rely on online shopping and other technology. Hmm. Let's consider that "conventional wisdom" a bit more closely.
Still less than $1 a day! 👀
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