As part of the retailcloud sales team, at least 2-3 times a week I speak with a business owner who tells me that their biggest issue is staying on top of the cash flow; in fact a not to uncommon statement is that we just had a great month but I don’t know where the money went.

Managing your Cash Flow and effectively converting inventory into cash are the most important things that small business operators do. With that in mind I thought I would put together a very high level post on some basic practices on cash flow management. If you want some complexity we have other posts on managing  cash flow, GMROI and sales to stock and cash to sales ratios that can take you to the next level but this for the basics.

Let’s begin by taking that money and putting it into some piles

Paying Sales Tax – this is often overlooked, but start first by running your sales tax settlement reports and put that aside for the tax man – there is no getting around that. While you are doing that, make sure that the amount you are reserving is in line with what your sales are – often items are not properly set up in your system and you may have neglected to collect the correct taxes.

Paying your Employees – Look at your time clock reports and forecast what you need to pay your employees, remember to carefully set aside withholding amounts and any other employer contributions. These are monies that you don’t want flowing into your operating accounts.

Keep your doors Open – Know what your fixed costs are (Rent, Utilities, Business Operation Fees) and prorate them so you are setting aside enough to cover these fixed expenses. Having accurate projections will allow you to forecast what your minimum sales are on a daily basis to cover overhead.

Replacing your Inventory – Finally set aside enough to replace your inventory,  if you are buying on account you will need to pay your vendors and if you are paying on delivery you need to keep your items stocked at optimum levels. While doing this, consider what you stock on hand is and determine if you are better off investing in complementary products. Have a look at our posts on Increasing per Unit Sales.

See what’s left over – This is for you if there is not enough to go around, you only have a few choices

These are 4 simple checkpoints – having these good practices will help you build a strong and profitable business. The majority of business failures occur due to poor cash management.

Increasing your units per transaction is often what determines success versus failure for the small to mid size retailer. How best to do this hinges primarily on understanding and engaging with your customers. This article identifies key practices to increase your units per transaction covering different aspects of your interaction with your customers.

Selling more is a direct reflection of you and your staff. Placement and signage are only so effective. The key is engaging with your customers starting with the interaction from your sales personnel on the floor. They are the first point of interaction a customer will have with your business. Besides hiring sales associates with experience and providing training, now they need the tools to build relationships with the customers. This not only will build the trust and result in additional add ons being purchased but also increase return visits.

How to Recommend Add Ons

Drop the “Would you like a … (scarf to go with your sweater)”, customer are so tuned to this that they have the “No thanks” formed before you have completed the sentence.

Try suggesting

Notice that these techniques do not ask the customer to buy the product but instead the sales associate is asking if they have tried, noticed, or been told about the item. The phases are conversational and encourage the customer to consider the option brought forth by the sales associate.

The Point of Sale

This is a prime opportunity to solidify your relationship with the customers. It’s no longer enough to complete the transaction, bag the merchandise and politely say good bye. You have a captive audience from your customer and one final opportunity to increase your units per transaction and ensure a repeat customer.

The customer is generally relaxed and impulse items are easier to sell. Your POS may have custom tailored recommended items prompts, similar to your Amazon on line purchasing experience. Ask your POS provider to add this vital feature, if available.

Does your POS has customer history, this provides another opportunity to reach your customer on a personal level.  By mentioning recent purchases, the sales associate can remind the customer that they may need to replenish the purchase or have a related product that enhances their experience with the original purchase. This type of personal interaction is reminds customers as to why they still shop in the traditional brick and mortar shops.

Create Sales Challenges

Focusing on a particular product line, or area for a week or a month can also help generate add on business. Sales Associates are motivated to recommend these items and the internal contest keeps it fun for the employees. You POS System should be able to track sales by employee so you can update your employees as the contest runs.

Retail Key Performance Indicators 

This blog covers a number of techniques to improve your UPT, but wouldn’t it be great to tie it all together with matrix so that you can see how effective these improvements are to your success. Focus on Key Performance Indicators (KPI) to track from a retail store perspective. Your POS System will provide reports and/or a mobile app so that you have immediate access and can tweak your approach to get the desired effect.

These positive sales experiences all hinge on your salespeople being able to build solid customer relationships built on authenticity. Your goal is for your sales associates to be seen as trusted advisors to your customers. Sales isn’t an art, it’s a science. Teach your sales associates the basics and with continued mentoring will tweak and develop their authentic approach. Use the tool provided by your POS system to give your employees access to the knowledge about your customers to further build that relationship.

A customer who is enjoying their experience in your brick and mortar store is easier to upsell and more likely to buy add-ons. That’s what raises your UPT – not promotions and discounts that might increase units sold but destroy overall profitability.

Today’s email which was the 5th of the series, and continued on yesterday’s theme of building customer awareness. It had a post on how to raise customer awareness of my brand by having “billboards” in their wallets and inbox.  

The POS solution has a gift card program, where in addition to the standard cards with my logo, you can also have customers buy and sell gift cards using mail, text and even facebook. I liked this and it made me think of how I had been neglecting my facebook business page.  I looked over the gift card company’s agreement and it seemed pretty simple, there were no monthly fees and i was able to order a 100 gift cards which I did.  The gift card company would contact me on how to activate the text and facebook ordering, and they were also able to put my cards in their online store for anyone to buy.  Seemed worthwhile as I only paid them if someone bought a card and a transaction fee when the redeemed. I was also able to use the send by facebook feature for promotions to attract new customers.

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