January 2009

Preserving Your Cash

Retailers are likely the most optimistic group of business people I know.  They always seem to be able to find a way to deal with adversity.  In good times, the media dictates little time or space to retail; however, when the chips are down, the front page is never big enough.  Retailers are receiving lots of attention these days which means, in far too many cases, cash is becoming a larger problem. 

There are no magic formulas that can improve your cash flow; however, here is one way that could:

A procedure that is often forgotten or put off is the actual follow-up with old merchandise.  If you do not deal with old stock on a regular basis, you are hurting your cash flow.  Old merchandise must be dealt with and the longer you wait, the more this old stock depreciates.  Getting rid of old stock helps you pay for more stock which should in fact improve your profit margins and; therefore, your bottom line.

If you do not have a method of recognizing old slow-selling stock, I suggest you look into it immediately.  Most any method will work providing you follow up diligently and providing you have the fortitude to proceed with price cuts until the goods are gone.  Pick a spot in your store and promote these goods.  Who says you can't have price cuts also?

The Business Lifeline is produced by Pierre Cliche of Retail $uccess.  You may reproduce this information, providing you quote the source.