Happy New Year! At Independence Bridge Consulting, we believe there are only growing & declining businesses. We understand that growth can not be constant. There will be events out of your control. This blog will focus on actionable steps to remove headaches you may experience as a small or medium business owner through the use of business systems. Without adopting modern business systems, your business will always cause headaches for you and your employees.
Retail is a continuously changing industry, and customer preferences primarily drive buying patterns. COVID19 has devastated retail & hospitality businesses that relied heavily on in-person visits. Those businesses with digital capabilities were able to weather the storm; many managed to exceed expectations. Yet, digital transformation for SMBs remains slow due to historically low IT spend. Most SMBs lack the infrastructure or organization capabilities to implement, adopt, and train staff to use the technology solutions correctly.
The “New Normal”
Many SMB owners and executives have started to understand the importance of digital transformation in the new normal. While there’s a change in their attitude, it’s not easy to change operations at the drop of a dime. Operating the business takes precedence over implementing new solutions, but without a comprehensive retail strategy, the business will stagnate, and consumers will take their business elsewhere. It’s a sad reality, but the pandemic has triggered a rapid change in consumer buying patterns. That’s why SMBs need to constantly innovate by balancing operations vs. identifying and implementing new solutions that consumers use at more prominent brands.
Managing and eliminating headaches. In the context of business systems and areas that might cause headaches as a small business owner. If your business incorporates unstainable business practices, most noticeably not utilizing the business systems, they will not provide the intended benefits. The business system should facilitate daily operations, so information is stored centrally. This could mean many things, but if your POS can count inventory systematically, then employees should utilize the feature. If your ERP system supports minimum product count for never off-the-shelf products then the system should create & send a purchase order to the vendor without the involvement of your staff. Another crucial stumbling block is when the staff doesn’t know how to use the system and can’t correctly use the system’s various capabilities. Staff will require training before they are expected to start using the system. Following through this step will help your business run more smoothly and make everyone’s life easier.
Structure your small business like a franchise. Why do entrepreneurs purchase franchises? Because they scaled successfully! Franchises bring a systematic, system-based approach to their operations. The processes are repeatable, set up so anyone can learn, and fill in if need be. If you genuinely want your retail or hospitality business to grow in 2022, you need to spend the time and effort to evaluate the retail strategy. Have you implemented the appropriate systems, staff training, and quality control mechanisms to ensure that processes are repeatable and completed each time consistently? This isn’t an easy task and sometimes takes years. It is more about the mentality change than achieving perfection.
When you think about a franchise model and scale, business controls & process automation become core to their success. Implementing business controls play a crucial role in operating a profitable business. I wish all humans were honest, but this is not the case. There will be employees and customers who try to take advantage of your business. For any retail business, their inventory should carry the same weight as gold bricks. The ability to reasonably measure retail shrink is one of the most fundamental activities of running a retail business.
Yet so few can generate analytics and identify money pits. Measuring shrink starts with receiving your goods when they arrive at the warehouse or store and then consistently using scan guns to do inventory counts. Stores will also require a process to account for damaged, obsolete, or spoilt inventory. This means the store associates will need to record these cases, and your finance department will need to complete an accounting write-off, so shrink totals are not skewed.
Process automation was considered a competitive advantage five years ago. Today it is a necessity to keep employees and customers engaged. Never in the history of man has differentiating technology capabilities been more economical than today. Customers can’t see your back-office technology, but they recognize when it makes a big difference. As a general rule of thumb, you want to put your staff in a position to generate money, not do administrative, tedious work. I know I sound like a broken record on the previous point. Automation makes something else happen. It standardizes your business and ensures consistency, done the same way each time. Just like a burger from McDonald’s or Wendy’s.
This is a critical aspect of scaling any business. When you have differences in how things are done, it’s impossible to know what to expect. Make 2022 the year for your business to become a well-oiled machine. If you have questions or comments about this blog, please email us.
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