If your customers see the perfect holiday gift this season and you are stocked correctly, they will need to purchase it and not procrastinate. That is the scenario that should happen if you have lowered your inventory and purchased only hot selling items. Most retailers are trying to keep inventories lean to handle the projected lower consumer spending. To be able to accomplish this, the most important tool you need is a comprehensive POS Software System that gives you quick and concise information to base informed purchasing decisions.
Last year most retailers had to deeply discount excess merchandise, leading to disappointing results. The opinion this year is less is better and you might miss some sales opportunities, but you want get burdened with inventory that has to be marked down. If a customer can’t find what they are looking for in the store, give them a coupon for a future purchase or let them make a special order with incentives.
Most software companies try to sell what they want to offer the customer, rather than what the customer wants to buy. The customer must feel comfortable with the people that will be supporting them, the software has the functionality that they are looking for and the price is in their budget range. We must build software that the customer wants to buy rather than having a sales staff that pushes software they must sell. Small software companies understand this philosophy and always keep the customers wishes in mind. Understanding the customerâ€™s needs, why these needs are essential and how can we best address them is our primary function.
To best serve the customer, we must offer good value, affordable costs and limited risks. You as the buyer must avoid the mistake of buying software from Microsoft, QuickBooks and other large companies, just because they are big. If you are try to have an â€œI care about youâ€ relationship with the big boys. I donâ€™t believe itâ€™s going to happen!
Michael Moore is a polarizing figure and says things that most of America does not agree with. One thing he did say I agree with was that we need to stop looking at the Dow Jones Index and focus on the â€œDoug Jones Indexâ€, a measure of how ordinary hard working folks are doing. With small business supplying a majority of the GDP and supporting most of the employment figures, why canâ€™t the powers in control of our economy come up with a better barometer to judge Main Street? Everything is judged on Fortune 500 companies, mergers, acquisitions, big banking and all their out of reason bonus payments.
The new Index should take figures from before the recession and run them through current. Those figures would include number of small businesses, number of employees, availability of credit, unemployment figures and productivity to name a few. Everyone has a different definition of small business, but it should be below 50 employees and each employee should be accountable for â€œXâ€ amount of dollars in revenue. Maybe then, we can get an accurate view of how the average American is really doing.
Here are a couple of quotes from Commerce Secretary, Gary Locke. If only they would do what they say and let small business people know how to get the help they say is available.
The focus of the Department of Commerce and what I want to do as secretary is really help businesses grow and expand. I want to help them sell their goods, be more competitive and, ultimately, create new jobs at good family wages.â€
We have a lot of incredible programs to help businesses, but not enough businesses know about them. So we’re on a mission to help the president create more jobs by improving our services for small-business owners and entrepreneurs. We also have to make it easier for businesses to access these services and communicate what new things we are doing for small-business owners.
Small business needs more that just lip service.
How many times have you started something that failed and wonder why? It’s called being in the right place, at the right time, with the right idea. Timing is everything in starting a business and thinking you have a brilliant idea does not cut it. If you have your choice between brilliance, luck and timing: take timing first, luck second, brilliance third and don’t confuse them. In these difficult times, if your timing is not perfect, even the best idea can fail. You are going to need to wear many hats; construction manager, stocker, salesperson and bookkeeper among a few. You will need to do a self-evaluation of your capabilities and find the areas that you will need help and rely on those people you select in your weak areas. If you’re not willing to put in the hours, don’t take on the task of being a retailer.
The rewards are many and the experience fulfilling. You are the one that decides the success or failure of your business. You can use your creative ability to design, stock, create the atmosphere and most importantly pick a good location with good timing. Oh, by the way, good POS software helps too.
Many Attacks Being Waged by Organized Cyber Groups Based Overseas, Feds Say–An Associated Press Article. This is more than a problem of the big retailers that you read about, but all the small retailers that have data of any type stored in their POS Software. Make sure you are using a software company that has gone the extra step to be totally security compliant.
AP) Cyber criminals are increasingly targeting small and medium-sized businesses that don’t have the resources to keep updating their computer security, according to federal authorities. Many of the attacks are being waged by organized cyber groups that are based abroad, and they are able to steal not only credit card numbers, but personal information including Social Security numbers â€” of the card holders, said Michael Merritt, assistant director of the U.S. Secret Service’s office of investigations.
Merritt, in testimony prepared for the Senate Homeland Security and Governmental Affairs, said that as larger companies have taken on more sophisticated computer network protections, cyber criminals have adapted and gone after the smaller businesses who do not have such high-level security.
Phil Reitinger, the deputy under secretary at the Department of Homeland Security said there are many simple steps that businesses can take to protect themselves. “Securing the entrances of one’s factory or store is second nature to any business owner and so cyber security protections must become,” he said in his testimony to the panel. He added that a recent study suggested that as many as 87 percent of data breaches could be avoided by installing simple to intermediate preventative measures.
Reitinger and Merritt said government agencies are working to coordinate more both with each other and with the private sector to improve cyber security. But lawmakers working on cyber security legislation in several committees across Capitol Hill are pressing for the administration to do more.
“Security cannot be achieved by the government alone,” said Sen. Joseph I. Lieberman, I-Conn. and chairman of the homeland security panel. “Public-private partnership is essential. Together, business, government, law enforcement, and our foreign allies must partner to mitigate these attacks and bring these criminals to justice.”
With a tough economy, we have to do everything possible to manage our cash flow to the greatest possible extent. It means finding that perfect balance of inventory that meets customer demand without having an amount that will force a retailer to have excessive markdowns. However, it does not mean that you crawl into your shell and neglect your product mix. You still must look at your items and move out the old and bring in the new. Know what you need to replace and know how much you have to spend and stick to your OTB plan.
Use your retail stock ledger to back up your buying. Departments and classes need balance and the best way to accomplish this is doing vendor comparatives. If vendor A performs better than vendor B, demand that vendor B give you better pricing and better terms. Extended dating extends your open-to-buy plan and decreases some of the risks for carrying new product lines. You need to think like your customers and look for innovative and exciting items that you can’t find at every big box retailer. Open-to-buy plans are exactly that, a plan, and with your instinct as a retailer, you can purchase those items with good margins and good terms.
Controlling the inventory investment is the single most important aspect of running a retail business. Planning merchandise buying in direct relation to sales and stock turn rates is the key to ensuring the right investment at the right time. The best way to monitor this is through a well-conceived Open-to-Buy (OTB) plan.
Simply stated, OTB involves developing monthly inventory plans by department. If a retailer needs $5,000 of inventory (at retail) on January 1 and needs $6,000 on February 1, then the retailer obviously will need to receive an additional $1,000 of merchandise before February 1 arrives. If the store plans to sell $500 during January, the store will need a total of $1,500 to be sure that $6,000 is available for sale on February 1. That is the easy part of an OTB plan.
The hard part is knowing if $5,000 or $6,000 is the right amount. That’s where ProphetLine can assist. We offer formulas that calculate the optimum inventory level based on the merchandise classification. We will help you develop sales, markdown and stock turn rate plans for your classifications. Then we will provide you with the recommended monthly inventories that you should maintain in order to stay on track.
Developing a plan is half the battle. The next step is executing the plan. That means monitoring your ability to meet the sales projections and stay within the inventory budget. Mathematical analysis can spot trends more efficiently than intuition. That’s the secret to staying with your plan and managing your inventory for the greatest financial gain.