If 2020 was the year of pandemic disruption and scramble-to-survive mode for retailers, 2021 may be the year of relentless Retail Is Detail reminders.
Many of you may well have benefitted from one or more rounds of PPP loans and their potential "forgiveness." Now comes the reminders that you must seek forgiveness. In writing. From the bank that loaned you the funds. And there are some time deadlines involved. Yikes.
Oh, and total forgiveness may not be forthcoming. It depends. (See below for these guides* and disclaimers from the SBA.)
Then there are the so-called "bookkeeping details" surrounding all this.
Why does any of this matter? Isn't it really something just for my accountant to worry about?
This matters because it has much to do with your cash flow (and your accounting accuracy), which has everything to do with the survival of your business.
Too often, retailers have been focusing on top line sales or bottom line profits, only to discover they have run out of cash. Remember, unless you are on the Cash Method of Accounting, profits are not cash.
But, especially in today's environment, there seems to be a lot more money available for retailers. The bank may be willing to extend other credit to you (if personally guaranteed.) And your vendors, eager to get more product out the door, may be dangling ever-more-generous terms. Even landlords are extending credit of a sort.
Take a very cautious view of additional "easy money."
Instead, by looking ahead, knowing what your PPP repayment obligations (if any) will be, you are better able to know what your other choices are.
Time to "Turn on your financial headlights!"** Look ahead with confidence to see the cash flow implications of your choices. Then you can decide.
* PPP Loan Forgiveness, U.S. Small Business Administration, Paycheck Protection Program
"Only an overview of the PPP Loan Forgiveness process."
** Take advantage of The ROI's 3-in-1 INTEGRATED Cash Flow calculator, more info here.
Now that we've put a wrap on 2021, and before we really dive into 2022, it's time to catch your breath and reflect on where we are after 2021.
Perhaps like us you believe that fundamental and enduring changes have occurred; no one can operate on "auto-pilot" anymore. All of us have to learn new processes, and form new habits. What's it called? Oh yes; "embracing change." Lots of it.
That's why it is a very opportune time, particularly for owners, to have a very active Q&A session with themselves.
Here's a post-pandemic strategy that should not be missed: higher margins!
Not the entire store, of course; you must be a merchant here.
But think about it: many shoppers have increased savings, reduced debt, or gotten their job back. Maybe all three.
And after months of being at home, and spending on home improvement and groceries, many shoppers have pent-up demand to spend on items they have had to postpone, like for themselves. Whether that would be in a restaurant or in a specialty store, shoppers are more willing and able to spend. (And some even feel entitled to spend.)
Each of us, our households, businesses and communities are in different stages of shutdown due to the coronavirus.
While we cannot speak to when this will end, we do have some ideas for dealing with the "fog of uncertainty" that hangs over us all.
There's little that any of us can do to address the public health crisis of the pandemic. Its impact on people and businesses is a widespread and major jolt, akin to the shocks of 9/11 and the 2008-09 economic meltdown.
Even as painful and disruptive as the pandemic is at this moment, we must remind ourselves that it will subside. It's not whether it will subside, just when.
But all of us are going to have to deal with the ensuing economic situation, and its effects on our sales, our customers, our employees.
These are difficult times for us all. Retailing in particular is under enormous stress. Many feel like there are no good choices.
But, there are good decisions. And The ROI is dedicated to helping you be able to make those good decisions for yourself.
Let's assume your stores have been closed for weeks now.
We recognize how conscientious you are. So, after paying what you can to your employees (and yourself), the next most-worrisome dilemma is your rent.
As you likely have discovered, a common choice for many landlords is to offer to defer your payments. But that means taking on more debt, as those payments are only being postponed to a later point in time.
You need a better solution than that.
"Buy low. Sell high. Collect early. Pay late."
That's the essence of retailing, right? But now, in the early summer of 2021, retailing more than ever demands a strong dose of good judgment.
It's shouted everywhere: "Look out! The inflation tsunami is coming!"
Yikes! It's buying season for many retailers, and the pressures to buy more, now, at these-low-prices-that-won't-last are mounting. And this is only the beginning.
Still less than $1 a day! 👀