Since March 2, 2020, The ROI's Co-Founders have been offering insights, strategic approaches, and online resources for independent retailers affected by the COVID-19 crisis.
These appeared first in The ROI NEWS.
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.
What you need is a Big Picture financial plan that you can share with your landlord who, likely, would like to be part of your solution, not just a problem.
Here are some steps to get you to that better solution.
Step 1: Look ahead to what "recovery" means
Use your 2019 results as your baseline for comparison. Then, compared to 2019:
Next, on to the 2021 plan!
Don't stop now (and don't look down.) The goal is to see how the "New Normal" could look.
Okay, now pause: take a careful look at this.
If yes, congratulations! Okay, armed with those plans, on to the next step.
Step 2: Set a meeting with your landlord.
Remember, your landlord has almost as much at stake in your survival as do you. Now is the time to team up!
Prepare these items for your show-n-tell.
Next, show what your vision of survival, the "New Normal" looks like...financially!
The Big Reveal
You reasonably expect your business to be thriving in the New Normal! And that means a thriving tenant for your landlord!
Yes, as a plan, it is only as good as the assumptions. But, you can explain and defend all of those assumptions.
And, you can expect your landlord to make some further suggestions, which can be very helpful. This is how you team up.
Step 3: And now, one more part of these discussions.
It's not just new lease terms you need to negotiate. You will be needing some additional leasehold improvements.
In order for your store to meet those sales assumptions for 2020 and 2021, there probably will be some changes that must happen BEFORE YOU CAN RE-OPEN.
For instance, changing the layout to allow more distance between shoppers; expanding aisle width; separating cash wraps; increases in lighting; enhanced cleaning, etc, etc.
Be sure that you address these leasehold improvements: Who will be responsible? Who will pay?
Daring to Look Ahead
You did the hard work. You made the assumptions. Drastic sales declines; wrenching expense cuts.
And then you dared to look at what that might mean in financial terms. True, a grim 2020. But a business on a path to a better 2021 and onward!
Most of all, you positioned yourself as the reasonable business person you are, not a victimized tenant.
Much better than begging, right??
Remember thinking that Amazon was the most disruptive force to happen to retailing? (Well, at least since Walmart was the most disruptive....)
However, the coronavirus pandemic eclipses them all. No matter where you live or do business, it is not whether, just when, COVID-19 will impact your life. Disruption with a capital D!
Alas, there is really no way to avoid discussing COVID-19, the coronavirus that began in China last month, and now continues to spread throughout the world.
No matter whether or when it is officially declared a "pandemic," the uncertainty and angst that it is generating have troubling implications for retailers.
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.
There’s an awareness, an “Oh wow!” sweeping around the commercial world. It’s stated in a variety of ways, but it’s the same surprise.
Indeed, some respected urban thinkers are suggesting that 50% of the traditional commuters may want to and will be encouraged to continue to work remotely. 50%?! Yikes. That’s quite a redirection of the parade!
Some thoughts from Nordstrom leadership that are spot on!
That's what Nordstrom President and Chief Brand Officer Pete Nordstrom told Puget Sound Business Journal columnist Patti Payne on April 23, 2020.
And what he succinctly stated is exactly the challenge – and opportunity – that is confronting all retail owners.
In order to answer whether you should re-open once you can, you first must be very confident in WHAT kind of retail operation you will be re-opening.
The only certainty of the aftermath of the pandemic is that everything will be different. Given that, what better time to re-imagine your business?
Since 1999, empowering retailers and store owners to "Turn on your financial headlights!"