Archive for December, 2008

So you are bucking the general trend and sales and profits are up?

Tuesday, December 2nd, 2008

Congratulations if that applies to your business.  It’s not easy in today’s conditions but there are companies benefiting from the ‘Credit Crunch’. By the way why don’t Cadbury produce a limited edition smaller version of The Crunchie’ to sell for 20p and call it the ‘Credit Crunchie’. Sorry, I digress. I promised in an earlier blog that I would give you some ideas of how to take advantage of the ‘recession’ so here are a few suggestions.

Stock and Suppliers

A fairly obvious one which I’m sure you’ve done. You must be inundated with offers of surplus stock, cancelled orders, orders which can’t be delivered due to removal of insurance cover.  Don’t feel bad about squeezing the price so it hurts. Cash is king and if you can pay promptly manufacturers are grateful just to reduce overdrafts and storage costs. Now you can sell stuff in the sale and at full margin. Don’t forget you may need to label it ‘special purchases’

Property

Now is the time to get your own back on the landlords. They will have lots of vacant properties and will be desperate for good tenants. Now you have the upper hand! Don’t waste your time negotiating rents as property values are usually a multiple of rental value so lowering the rent will reduce the property value which may cause them problems of reduced security with their own lenders. However, long rent free periods, monthly rentals, contributions towards shop fit, no personal guarantees etc are all fair game in negotiation. Go for it!

Staff

There will a lot of good sales staff and managers looking to work for successful retailers. They know if their Company if finding trading difficult and will look to move before the inevitable happens. It’s a great opportunity to improve the calibre of your staff.

IT and systems

At a time when many businesses are cutting back on capital expenditure it may be a good time to update and improve your systems. All companies are keen to get any work, even at cost price (or just below) if it means they can keep their trained technicians employed.

Staff and Management Training

Ditto with Training Companies. Anyone looking to spend money will be made to feel very welcome and amazing deals can be done during these interesting times.

Shop refits/designs

Once again, if you are thinking of shop refits or a whole new branding exercise (although if you are doing well the phrase ‘if it ain’t broke don’t fix it’ comes to mind) now could be the time to strike deals.

Allan Leighton chairman of The Royal Mail, formerly of Asda quoted recently “If you have £1m in cash today it will buy you what £5m would have done a year ago. I call it the power of five. If you have cash, its power has gone up fivefold.”

So there’s your target. If you’ve got cash you should buy stock/services for 20%

Good Luck

Tony Heywood – Gilcrest Services Ltd
Retail Troubleshooter
Rescue and Recovery Consultant
www.gilcrest.com
http://blog.esellit.com/
http://www.linkedin.com/in/tonyheywood2