After getting the licenses, finding a location, and buying the products you want to sell in your store, another big challenge lies ahead: how to successfully manage your store.
The latest statistics show that 33.2 million small businesses are in the United States, representing 99.9% of all American businesses. Unfortunately, nearly one-third (31%) of U.S. small businesses are currently not operational.
Part of the battle is knowing how to adapt to new challenges. For instance, over 70% of U.S. small businesses closed in March 2020, when the COVID-19 pandemic hit the U.S. The majority of small business owners have taken steps to adapt to this new reality. For many, this involved accelerating their online activities to reach new customers and maintain old customers by selling their products and services online.
In short, starting your own store is an exciting idea that holds ample promise for many entrepreneurs. But knowing how to run it successfully is no easy feat. Read the following blog to learn more about how to run a shop successfully, especially in this time of inflation, to avoid going out of business.
Put Your Customer First
The main objective of any manager attempting to run a shop successfully is growth, and customers, of course, are at the heart of it. Therefore, customer service should be at the heart of any organization. Many Americans use excellent customer service as a major factor in their decision to shop with a certain company. So the best strategy to retain customers is to ensure they have a pleasant shopping experience. Retaining existing shoppers is in the store’s best interest because investing in acquiring new customers is between 5 and 25 times more expensive than keeping current ones.
If you hope to give your customers a better shopping experience, you’ll have to put yourself in their shoes. How would you like to be treated? Would you want to be greeted when you walk in the door? If a problem arises with a recent purchase, how would you like the store to resolve it or compensate you for the inconvenience? How would you like the shop to deal with long lines? Good customer service can improve customers’ experiences by making them feel appreciated, valued, and essential. It might also facilitate the implementation of a subscription-based business, increased numbers of referrals, and a successful retail loyalty program.
Manage And Monitor Your Employees
Effective employee management is another crucial component of running a store. To ensure that your customers have a positive shopping experience, your store must be appropriately staffed and employees appropriately trained. For a customer, nothing is more frustrating than walking into a store and finding a limited or disinterested staff. Let’s say you run a coffee shop. You need to identify the roles you need in your coffee shop and the number of shifts you need to fill. Assuming that your coffee shop is open from 8 am to 8 pm and that the baristas arrive half an hour early and stay half an hour late each day, that’s 13 hours of work per day and, therefore, 91 hours of work per week. If you have two baristas per shift, which is highly recommended, that’s 182 hours per week. An employee time tracking for your coffee business will be a must.
The workload will be reasonably evenly divvied if you have three full-time and three part-time employees. One full-time employee will have to be the main barista/trainer, and you will have to do the back office/management yourself. If you can’t handle it yourself, you could hire a seventh employee to do it. As your coffee shop evolves, it would be best to hire one or two people to work perhaps 12 hours a week so that they can be used for flex shifts or to help cover a team in case an employee is not available to work one day.
In short, the objective is to ensure that you have enough employees to meet the needs of your clientele but without exceeding your payroll projections. Here are also some tips to help you ensure that your team is working efficiently and has the knowledge it needs to succeed:
Have a good point of sale software
The point of sale system will allow you to find your peak hours and monitor employee performance metrics. For example, it can tell you the time of day when customers most frequently visit and the days of the week when you have the most transactions and sales. Such data allows you to staff your store accordingly.
Plus, you can conduct payroll and scheduling from your POS with a well-integrated system. Allow team members to clock in and out at any workstation and managers to correct any mistakes or discrepancies in the backend. Staff reports give you the chance to more accurately measure employee performance so that you can offer data-driven feedback. Our retail POS system, KORONA POS, can help manage all of these tasks.
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Focus on employee training
Knowing how to run a successful shop is also about finding the right talent that can help you provide your customers with quality service. And once you’ve found the right talent, it’s important to foster a smooth transition. Staff training is critical to this transition, from sales tips to maintaining the brand image. Training new employees on how to use the tools and technology is also essential. The point of sale system is probably the most critical piece of technology you will want them to master.
To ensure consistency and thoroughness in the onboarding process, it can be helpful to document exactly what that process is. This document should include specific training sessions, milestones, performance objectives, and new employees’ deadlines. Not only are you and your employees on the same page, but it ensures that each staff member receives the same training, experience, and expectations.
Use Key Performance Indicators To Assess The Evolution Of Your Store
The most common gauge of retail performance is sales volume which you can access through POS reporting and analytics. More sales mean growth. However, growth is not just about the number of sales; it also involves improving your processes. Improved processes can mean becoming efficient at reaching more customers, improving employee retention, and increasing or cost-effectively decreasing your inventory. Ultimately, this will result in increased sales and better business growth. Below are some of the most common retail key performance indicators to measure the effectiveness of your store operations.
Gross profit margin: This is calculated by dividing gross profit by sales. It can tell you more about the actual profit you make on your sales.
Customer retention: How many customers come back? You can learn more about what people think about your products by tracking repeat sales. The data from your point of sale software effectively sheds more light on this point. The ability to turn one-time customers into repeat customers is a consistent profit generator for long-term growth, and a very beneficial strategy to get repeat customers is to set up a subscription-based business.
Foot traffic and digital traffic: Measuring foot traffic and website visits is a helpful indicator of user awareness of your brand, the success of marketing campaigns, and the performance of your digital and physical storefronts. This key performance indicator can improve or create strategies to drive more visits to your physical locations and website. You can measure foot traffic and digital traffic by looking at the total number of store entries or the number of visitors to your website each month.
Sales by category: Not all products are bought at the same speed in a store. Some product categories may perform better than others. Sales by category allow you to evaluate which types of products are most successful in helping you prioritize your inventory. Again, you need point of sale software that will enable you to manage your inventory accurately to make better decisions.
Sales by square foot: Sales per square foot is an interesting metric if you have a physical retail space. Sales per square foot measure how efficiently you use the space you have, and sales per square inch are a good indicator of your store’s productivity, offering insight into the store’s layout and merchandise. This metric also allows you to prioritize your inventory.
Inventory turnover ratio: The inventory turnover ratio formula is calculated by dividing the total cost of inventory sold by the average inventory cost. This formula allows you to determine how fast stock sells. If you hold your inventory too long, you risk having excess inventory and losing money. If you deplete your inventory too quickly, you may not be taking advantage of market demand as effectively as possible. This is a great metric to monitor over time to help understand which inventory items are most affected by seasonality.
Average customer spends: Knowing how to run a successful store also means knowing how much the average customer needs to spend at your location for you to make more profit. If your average customer is only spending $20 at your store instead of $250, you should consider increasing your efforts to drive sales from current buyers. You can obtain average customer spending by dividing total sales over a given period by total transactions.
Year-over-year variances: Year-to-year variations are another significant measure to evaluate the effectiveness of your store management. Are your sales decreasing from one year to the next? How successful is your marketing strategy from year to year? Tracking yearly statistics allows you to follow growth rates and understand how your business evolves over time.
Track KPIs monthly or weekly to oversee trends and issues that might not otherwise be immediately apparent. It’s also helpful to share these numbers regularly with management and key employees at team meetings. The retail industry today faces unprecedented change. With large-scale retailers continuing to squeeze margins from smaller retailers, it’s crucial to adopt solid management practices for growing brick-and-mortar stores.
Streamline In-Store Operations
As a shop manager, chances are a large number of the day-to-day tasks that dominate your store’s operations are based on old-school styles and strategies, such as manually counting inventory, creating manual calendars, and entering sales transactions one-by-one into accounting software. While these methods can be useful, they waste time that could be invested elsewhere. To run a successful store, you need to find more efficient ways to streamline operations within your store: Here are some ways to simplify your store management:
Utilize automated tools
All aspects of the business can be streamlined with automated technology, including staff scheduling, sales tracking, and reporting. Automated inventory management is also critical to a successful store and retail operation. Without tracking what’s selling, what’s not selling, average sales, and profit margin, it’s difficult to know how well your store performs or make adjustments accurately. While inventory tracking can be managed manually, inventory management software can offer a real-time view of what you have on hand, streamlining your internal processes and practices. With the right POS system, it’s possible to optimize all of these tasks, putting a full suite of management tools at your disposal.
Use lean techniques
The term “lean” refers to strategies and processes that minimize waste and maximize efficiency to increase your bottom line. Let’s take store hours as an example. Like many shop owners, you probably have the same number of people working the same hours every day you are open. You may have a little more staff on weekends or holidays when there is a lot of shopping, but otherwise, the hours are relatively routine.
By using lean tactics to revamp schedules, store managers can use data trends provided by their retail management systems to determine when the store is busiest – and when fewer staff members are needed for successful operations. Removing a few team members when they are not needed can save thousands of dollars each week.
Try New Strategies And Stay Flexible
When things are working well enough, staying the course and avoiding taking risks is the easy route. But instead of sticking to the status quo, keep a close eye on your business, track analytics, and constantly evaluate opportunities and what they mean for your business’s short and long-term success. With strategic planning, a willingness to adapt, and time-saving tools at your side, you’ll be well-equipped to build a retail business. Don’t be afraid to try new marketing strategies until one hits the mark and improves your times.
How To Run a Shop Successfully: Wrapping Up
Management is not necessarily a natural skill. Instead, if you invest the time to optimize tasks, lead your team, implement the right tech, and handle conflicts quickly and appropriately, you will be able to run a successful store. Run your shop successfully with KORONA POS, the point of sale designed for retail stores, QSR, and ticketing businesses.
FAQs: How To Run a Shop Successfully
Try to get a perfect knowledge of your goods. Also, adequate capital and a suitable location are a must. Next, set up an appropriate buying and selling policy. Finally, focus on utilizing the best technology and catering to consumers satisfaction.
To start a successful store, you must first have a plan. Then look for financing to cover the start-up costs. Find a suitable space that can bring in foot traffic. Hire a strong team. Invest in a point of sale system, then organize your accounting and bookkeeping.
There are several ways to attract customers to your store. Considering the increase in online shopping, start by opening an online store first. Then offer customers the option of ordering your products online but picking them up in your store. Offer a quality sales service that will keep your customers coming back. Consider starting a referral program as well. This will encourage your loyal customers to tell their friends, relatives, and colleagues about your products. Finally, organize regular events in your store.
To run a small retail store, provide quality customer service. Recruit, train, and incentivize your employees. Make sure you don’t constantly run out of inventory or have excess stock. Use appropriate point of sale software to streamline in-store operations. And finally, try new sales and marketing strategies to attract more customers.
