As you worry about your retail shop’s survival in this pandemic it’s important to remember that you’ve been through tough times before. Nothing like this, for sure, but you’ve faced challenges in building your store. You rose to those challenges and used your creativity and drive to find solutions. You did it then and you’ll do it now.
In my case, in my over thirty years as a retailer I’ve been to hell and back. I’ve seen blistering growth, stagnation, crisis. I’ve been on the edge of bankruptcy, with half a million dollars in payables over 120 days, maxed out credit cards, my back to the wall.
It took me ten years to get out of that hole but the skills and tools I learned during that difficult time have kept my stores out of trouble through various economic shocks including the great market crash.
I want to share these tools and approaches with other independent retailers in the hope that they can help your retail shop’s pandemic survival.
In addition to this post, I have created a free COVID-19 Retail Survival Toolkit full of videos, spreadsheets, templates and images. You can access the toolkit here.
Key #1 for your store’s survival – managing yourself
Want to do a great job managing your business during this difficult time? Then manage yourself.
It’s hard to imagine a more stressful time. The uncertainty alone is enough to make your head explode. If we are going to get through this we are going to work extra hard to manage that stress. The scientific research is clear: stress narrows our thinking and shuts down our creativity. Under stress the big ideas that will get your store out of this mess won’t come to you. You won’t see all your options, you won’t see the way out.
So manage your stress, for your sake and the sake of your business
Practical tips for lowering stress
1- Limit your news consumption to once a day. Yes, you need to know how the situation is changing, but a daily recap is all you need – any more will make you crazy.
2- Try meditation. Scientific research has proven that meditation lowers stress. Now is the perfect time to try it especially since apps make it easier. I’ve been a student of meditation for decades and I’m really impressed by Ten Percent Happier Meditation. The app offers a number of sessions from a range of instructors so you’re sure to find one that works for you. Another option would be Headspace. Both apps a free with in-app purchases. The full versions are worth every penny.
Ten Percent Happier https://www.tenpercent.com
3- Exercise. As independent retailers we are constantly on our feet and getting way more exercise that we think. And now we’re sedentary. So let’s get moving. Exercise will help us shake off the stress that’s building in our body, it will make us happier. And hey, with all this time on our hands, maybe we can start working on that six pack…
The Peloton app doesn’t require a bicycle or treadmill to use. There are plenty of workouts you can do at home with few props, including HIIT, strength training, cardio etc. The best part? there’s a free 90 day trial!
Key #2 for your store’s survival – managing your expenses
In these tough times cash is king – we need to do everything we can to keep lower our expenses and not just for this month but potentially for many months to come.
1- Keep only key staff (if you can). Don’t worry about not having enough people when you re-open. Re-opening will happen slowly and you won’t need a full team right away.
It’s better for your staff to rely on improved support from the government than to have no job to come back to when this is over.
2- Cancel orders. You won’t be alone, retailers across North America are cancelling their Q2 orders. Do this cooperatively with your suppliers. Work it out together. You both want to be around when this is over.
3- Ask your landlord for a rent abatement. Rent is the biggest cheque you write every month, you need to see if you can lower that expense. A rent abatement for the time you are closed is better than deferring the rent to later. Things are going to take a while to get back to normal, you don’t want to have an unmanageable payment waiting for you in the fall.
If you can’t get a full abatement see what the landlord will take as a partial payment. They have their expenses they need to cover but they too can take advantage of government programs. Time to share the pain.
Ask to pay a percentage rent when you reopen. Sales will take a while to return to normal levels, paying your rent as a percentage of sales will keep your rent expense manageable. Aim for 5% of sales as your target.
Re-read your lease and have all your facts ready before you meet. Don’t be confrontational but negotiate in a spirit of cooperation. Understand that you are negotiating from a position of strength. Your landlord knows that at the end of this crisis it will be hard to find tenants. It will be cheaper to give you an abatement than incur the expenses of finding a new tenant.
You can access a draft letter to send to your landlord in my COVID-19 Retail Survival Toolkit. Please re-work it to meet your needs. (I am indebted to the team at Management 1 for providing the initial framework for this letter)
Take advantage of every government support program possible.
Keep in mind that this pandemic could drag on for a while. You are better to have too much if it ends quickly to ensure your retail shop’s pandemic survival than have not done enough if it drags on.
Key #3 for your store’s survival – plan your cash crunch
If you have cash flow projections stress test them and revise them weekly. If you don’t have one, or have a back of the napkin version, it’s time to set one up. In these times, thorough cash flow projections are critical to your store’s survival.
There will be a cash crunch and you need to see it coming. Once you’ve set up your projections, run different scenarios through your projections. What if your store is closed for a few months? What if fall sales are only 80% of normal. What if they are 60% of normal?
It’s stressful work, but you need to know at what point things are going to get rough and when they’re going to become untenable. The time to deal with a cash crisis is before it happens, it’s essential to your store’s survival.
Tom Shay’s Profits Plus website is a great resource. I strongly recommend you check it out. He’s been kind enough to let us use his very thorough cash flow spreadsheet. It takes time, it’s boring, but it’s essential work. You can access the spreadsheet and instructions here.
The Toolkit also has a simpler cash flow sheet that breaks things down by the week: I would recommend you use both. This one for the short range and Tom’s for the longer range planning. (Thank you Management-One for this weekly spreadsheet).
Key #4 for your store’s survival -manage your Open To Buy
Controlling inventory levels will be critical for a retail shop’s pandemic survival. You need to have a tight open to buy plan and monitor it closely.
Between your store being closed and slowing demand once it reopens, it’s going to be easy to fall into the trap of having too much product on the shelves, and you can’t pay the rent with product. If you have an OTB plan, monitor it closely. If you don’t have one, it’s time to set one up.
Setting up an OTB plan will help you know just how much product you need in each category. it’s not hard to set up, just tedious and time consuming. You’ve got the time now, set up your OTB plan and it will save your business when things get going again.
Already have a plan? It’s time to revise your projections and plan how you are going to get it back on track
Want to set up your own plan? There’s a great link on how to do it in the Toolkit.
Want to use a program? We are testing out MyOTBPlan for our stores. So far we have been impressed with the ease of use and the unlimited free 10 hour a day support. It’s only $150 a month. Get more info in the Toolkit.
Want to have someone do it for you? You’ll still need to provide the data, but Management-One has a team of planners and algorithms that will give you a sophisticated reports and guidance. We have tried them in the past and found that they were expensive for what they provided. That said, I know many retailers that are happy with their services. You can find out more in the Toolkit.
Key #5 – generate what sales you can
Every little bit of revenue will help in your store’s survival. Can you call your top clients and see how they’re doing and if they need anything? Or try selling on social media but whatever you do watch your customer’s mood. As I write this, three weeks into the self-isolation period it’s too soon to reach out to our customers with a sales pitch unless you are selling essential goods.
If you have an online store, and if you think the timing is right, promote it to your brick and mortar customers. Promote it based on how you can help them, don’t promote it based on “we need your help”
If you don’t have an online store use the extra time you have now to get it set up. Just be careful not to invest too much money. Remember, you are trying to keep your expenses down. Options like Shopify that may cost you more in the long run are good choices. The job right now is to get to the long run.
You may not make much money on your website but it will boost your store’s profile, help a bit with your retail shop’s pandemic survival and put you in a good position should there be another round of lock-downs.
Key #6 – market your business
Good marketing means understanding your customers mindset. And for most of us retailers, our customers minds are focused on just getting through this. I know you’re just trying to ensure your retail shop’s pandemic survival, but trying to sell them now will not be helpful and may even create a negative impression.
Reach out to them on Social Media and be social. Share your best wishes, your favourite quotes, beautiful pictures. Be positive, be supportive.
Later you can have them reminisce about their favourite product from your store. Have them share pictures of the product. It would make for a fun contest.
Later still you can start showing them product. But for now, be supportive, be thoughtful and keep your connection.
Want a free pack of photos to use on social media? There’s weeks worth of positive images for Instagram and Facebook in the toolkit. We will be updating the images every week for as long as we can.
Survival is not enough – improve your business
This forced downtime is a great opportunity to improve your business. As independent retailers it’s easy to get lost in things we need to do to get through the day and not get to the long range things. Well now we have the time. Let’s use it to make improvements on how our store is run.
Improve procedures, fix the training manual, make a marketing plan. In you own the Retail mastery System, dive into it. Apply what you learn in the eleven modules to make your store better. There’s so much we can do with this time that will make our businesses run more smoothly. Let’s make those improvements so we are in a great position to take advantage of the better times ahead.
As an added bonus, taking the time to move your company forward will give you back a sense of control. The best way to defeat stress is with action. So get moving, get building the better store of your dreams.
Not sure where to start? There’s a retailer self-assessment in the toolkit that will help you understand where you are strong and what retail skills you can improve. Use this evaluation to build your skills and your store will run more smoothly once it reopens
The Retail Mastery System is an online program that features short training videos on the 11 essential retail skills. The information is specifically meant for independent retail. This is the best way I know of to build a better store. It’s been the key to our store’s success. I highly recommend it. (Just go for the monthly payments, you know, cash flow…). Find out more here: www.whizbangtraining.com
I hope some of the information in this post will help you navigate this difficult time. You will get through this and you’ll be a better retailer when you do.
Please let me know your questions or thoughts in the comment section below