smallbusiness.co.uk: Helping your business think big

Independent retailers are going through a bumpy time at the moment. Fortunately there are proven ways to increase profits which can be implemented quickly and easily. Using these tips from SmallBusiness.co.uk and Simply Business can help.

Stock fluidity

It is easy to fall into the trap of buying the same brands all the time and offering customers the same choices, but regular performance reviews of your stock can make a big difference to your sales. For example, if you know a certain product is selling well, you could introduce a wider choice of brand or type within that category to see how customers respond.

Monitoring performance of stock also enables you to identify when to discontinue a line, and in doing so you can trial other items. You could also find out from your customers whether there is anything they would like to buy from you that you don’t currently stock. The ability to offer more choice is what may ultimately differentiate you from the competition and keep your customers coming back.

Non-food seasonal lines

These days there are many opportunities to sell non-food seasonal lines, and the number seems to be growing each year. Events such as Valentines Day, Mother’s Day, Easter, Father’s Day, back-to-school, Halloween, Bonfire Night, and Christmas all offer chance to sell themed merchandise.

Because margins are greater on non-food lines than other products, these opportunities are too good to be passed over. Items such as cards, teddy bears, picnic sets and Halloween accessories are all good sellers and any excess can be used again the following year.

Community participation

Increasing your customer base can be a challenge, which is why it is important independent shops to get involved with the local community in order to be recognised and to stand out from the competition.

Sponsoring a local event, a kids' sports team or helping out your local school are all ways to promote your business positively within the community. If you own a convenience store you could try to promote healthy eating in the schools or perhaps hold a BBQ with your local pub.

These sorts of activities are also good PR and local papers are usually happy to cover stories about businesspeople who are actively contributing to the community.

Planograms

Many manufacturers, suppliers and brands offer detailed marketing documents called planograms to help retailers maximise sales. These are designed to encourage you to buy and help you sell on their products, so they can be quite biased. However, if used in conjunction with your own experiences and customer knowledge, they can be valuable tools for improving the way you order and for presenting your products in-store.

Planograms generally contain useful information such as the most popular variations of a certain product and the best selling brands within that product group. For example, they might give you the market share figures of a manufacturer's instant sauces by type (Chinese, Indian, Italian) and by brand (Sharwoods, Chicken Tonight, Lloyd Grossman).

The planogram will tell you what you should stock and which sizes/weights work best for your shop size; recommend merchandising tactics like how much space you should allocate to each product; offer insights into the type of customers that buy the products and their motivation for buying; and offer ideal store layouts based on this information.

Increasing basket spend

The simplest way you can increase your overall profit is to aim for a higher basket spend – encouraging your customers to buy more items or more expensive items than they would do normally. An effective way to do this is to train your staff to actively sell rather than waiting behind the counter. Even if you just ask staff to point out price promotions or new products to customers, you’ll see a difference.

Another way to get customers to buy more is to place related stock items together. For example, alongside instant sauces you should display pasta, rice and any other relevant accompaniments. This sounds obvious, but so many shops don’t do it because it would involve a re-arrangement of the store layout.

Shop around for your business rates and insurance

Business rates are continually rising and eating away at the profits of independent shops, but just by shopping around you’ll see that there are cheaper rates available. The same goes for shop insurance – as well as trusted providers there are also a number of other insurance companies who can offer savings on comprehensive policies. The key is to find a good way to compare actual quotes from all providers.

Simply Business can often better online quotes after a customer reveals some extra piece of information about their business that was not given on the form.

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