Posted: Tue 31st Mar 2020
Catherine Erdly shares seven things entrepreneurs running retail and product businesses can do right now to better cope with the impact of coronavirus.
1. Don't panic
There are two types of people - those who get stuck in fear and paralysis and those who are more proactive.
No prizes for guessing which group of people do better. So wherever possible, try and be in that action. Try and focus on one thing a day that you can do in your business.
Keep focused on action, rather than getting stuck in the fear. As Franklin D. Roosevelt said: "the only thing we have to fear is fear itself".
2. Focus on your product
Even during economic downturns, people do spend. They still have birthdays, babies are still being born, so they're still treating themselves and treating their friends.
There's even something called the "lipstick effect" after researchers noticed an upturn in lipstick sales during a recession because it is a cheap way to cheer yourself up. Small luxuries may even sell better than ever.
Selling products is always about seduction. It's always about finding the products that your customer really, really wants to buy. But during tough times, it's more important than ever.
Start by taking a look at your data. What are your best sellers? Then think about your products. Are you moving them on? Are you offering your customer something new? This is now the time for you to be really critical and honest about your products - is there anything you can do better?
3. Manage your stock
You want to make yourself as nimble as possible with only the stock you need.
If you've had something in your business for a while and it's finally sold, you don't have to replace it. You should only be re-buying in best sellers.
Ideally, every business should have cash reserves - money to see them through difficult times, and that is really hard to do if you put all your money into stock. If stock management was critical before it is absolutely vital now.
4. Avoid knee-jerk promotions
Sales are likely lower than they've ever been, because we're in very uncertain times and nothing is worse for sales than uncertainty.
If you knee-jerk and start running discounts to get sales going again, there is a danger that you will come out of this (hopefully temporary) situation having taught your customer that you are a promotion-driven brand.
In the future, they would be trained to wait until you go on promotion rather than buying at full price. You want to avoid this at any cost.
5. Have a really honest look at your numbers
It's time to have a really honest look at your sales forecast.
If you don't have the sales forecast, now is a great time for you to get one, because you need to understand how your cash flow will look over the next few months.
Knowledge is power. If you can map out the next few months based on a realistic and a worst case scenario, then that's going to be a lot less uncomfortable than ignoring the problem and hoping it goes away.
6. Be proactive
Think about what you can do to improve your business. Consider all of those areas of development that you've thought about previously but never had time to put into action.
Think about using this time to get yourself fit for the future. Things like your sales forecasting and your stock control are basic business management principles that you can work on and improve, but also look at your business and be proactive about what else you can improve.
7. Stay close to your customers
It's going to be bumpy. You're going to feel demoralised but don't retreat.
Think of selling as service. How could you help your customers? How can you meet them where they are right now? So if they're uncertain, or they're stressed, talk to them. The people who go out there and really connect with people and meet them where they are will be the ones who continue to make sales.
In summary, don't panic, focus on your products. Manage your stock. Avoid knee jerk promotions. Have a really honest look at your numbers. Have a really good look at your business and identify areas that you could work on to get ready to come out of this stronger than ever, and stay close to your customers.
If you are proactive and action focused, if you stay positive and you keep showing up, then the outcome will be so much better for you and for your business.