Back in the Black

Your To Do List For Reducing Costs & Increasing Profits

Let’s face it, a business’s first priority is to turn a profit. While many independent retailers have top products, are passionate about paint, and exercise plenty of hard work, operating a profitable business can be difficult to do. Whether your store is experiencing a cash crunch, you’re trying to stay afloat, or you’re simply looking to increase sales profits and grow your bottom line, there are always ways to improve. Check off a few items on the to do list and start trimming costs and turning profits today.

Reduce Cost & Increase Profits

TO DO: CUT EXPENSES

Review your business expenses and determine which costs you can cut without compromising custom service or quality. List all the expenses the store incurs and see how you can reduce spending. While some are essential, others are unnecessary but nice to have. Take inventory of these expenditures and compare their cost to the value they give your store. If you no longer use a service and it’s not important to your business interactions, cancel the monthly fee.

A simple phone call to negotiate better rates is a great place to start. Request lower monthly fees for credit card processing and telephone and utility bills and consider calling competitors to ensure you’re paying the lowest possible price for internet and web hosting. A reduction in regular monthly expenditures can easily equal more money staying in your account.

Office supplies, equipment, and shipping is another area to trim extra costs. Consider cutting receipt paper and go all-in with electronic receipts and invoices. Review health plans and business insurance to make sure you’re getting the best coverage without paying top dollar. It doesn’t hurt to ask. And if you have the extra space, buy products in bulk. Every little bit adds up.

TO DO: REVIEW PRICING STRUCTURE

It’s never easy to raise prices, but a small increase in your asking price can make a considerable impact on your gross profit. Review the cost of your products and run the numbers to ensure they’re in line with your competitors, the state of the economy, and the loyalty of your customers and adjust your prices accordingly. Remember, many of your patrons are paying for more than the top-quality product -- they’re paying for your store’s exceptional customer service and product expertise, something which many customers consider invaluable. If you’re hesitant about a price hike, test the increase on a few products before rolling out the higher prices across all products.

TO DO: LEVERAGE VENDOR RELATIONSHIPS

Capitalize on great business relationships by renegotiating with your vendors and suppliers and utilizing the benefits of the ALLPRO group. ALLPRO negotiates lower rates, promotions, discounts, and freight with all supplier partners. Attend ALLPRO shows and events, and leverage the personal relationships and additional sales and discounts offered, another perk of being an ALLPRO member. Check in with vendors to see if there are upcoming sales or if they have other plans that could save your store money. Just like you’re working hard to keep your customers happy, so are your suppliers.

TO DO: STREAMLINE OPERATIONS

If you find yourself or some of your employees overworked, wearing several hats, or straight-up doing it all, it might be time to streamline your operations to improve the efficiency of your retail store. Simplify important tasks, eliminate unnecessary work, and put people in the places they make the most difference. Put new, inexperienced staff beside seasoned pros during busy times so one can learn from the other. One trick is to calculate the average productivity per employee to determine who generates the most sales. Then schedule people or teams into time slots to leverage their skills for top sales and the store will start reaping the rewards.

Another way to reduce costs is to invest in automation. Anything from data entry to inventory management, accounting, payroll, and administrative duties can be moved to a more automated process, freeing your people up to contribute to the store in more meaningful ways.

TO DO: INCORPORATE E-COMMERCE

Any store that has moved to online sales knows how important - and lucrative - e-commerce is, especially in the midst of a pandemic. And it should be no surprise that online shopping is sticking around. A UPS Pulse of the Online Shopper Study found that more than half of consumers shop online, making it essential for retailers to have a digital presence.

E-commerce provides a faster and more flexible buying option for customers in comparison to in-store shopping. Because of the benefits, your store may appeal to both new and existing consumers who prefer the convenience of shopping online.

TO DO: GET ON SOCIAL MEDIA

Like online shopping, social media is here to stay. With savvy new social platforms, you can communicate precise messaging to a unique audience - for free! A business presence on popular sites such as Instagram and Facebook doesn’t cost money, however, advertising and other paid avenues on social media can take your branding, visibility, and business to the next level.

Use social media to engage with existing customers and draw a new crowd. Host contests, offer product and service expertise, elicit feedback from your audience, even generate sales directly via social platforms. Social commerce allows you to sell products within social media networks so it’s easy to engage Facebook and Instagram users and turn scrolling into sales. The sky’s the limit when it comes to growing your brand and your bottom line via a social space.

TO DO: REMOVE AND REDUCE INVENTORY

Unprofitable products could be getting in the way of your store turning a better profit. Examine which merchandise grosses the lowest profit margin and determine if the products should be removed from your stores or shelved until they can be marketed for better sales.

Controlling stock is a beneficial way to streamline business and boost cash flow. Not only will you have more space for the products that garner top dollar, you’ll have less funds tied up in slow-moving products and less losses due to expired inventory.

TO DO: STAY UP TO DATE WITH INDUSTRY CHANGES

Be on the cutting edge of everything paint related. Keep tabs on the latest and greatest in colors and applications by following trending social media accounts, reading industry magazines, and researching market trends.

TO DO: BENCHMARK AGAINST YOUR INDUSTRY

While comparison is usually the thief of joy, in retail it can be the key to cutting costs. Analyze your store’s metrics against others in the industry. If you can identify areas you’re spending more on, consider why and see if you can lower these expenditures to industry norms.

TO DO: OFFER INCENTIVES TO STAFF

Ask your employees for help with reducing expenses and reward them if they find ways to cut costs. Existing employees who feel valued are more motivated to stay on task and turn profits.