Retailers are faced with genuine cash management challenges. These include the constant need to maintain adequate cash reserves to cover merchandise replenishment, as well as the annual need to cover overhead during the slower selling seasons. Then of course there is also the need to have reserves available to cover the unexpected such as unanticipated declines in sales and more. For those who are starting a dollar store the challenges are no different. While they are no different, some are certainly magnified by the sheer volume of merchandise required to support the sales being made. In this article I present tactics to help your business weather the challenges so you are ready when the higher sales levels arrive.
Keep a cash reserve on-hand.
There are just so many cash flow challenges when opening a dollar store that cash management is imperative. One of the best ways to help cushion these challenges is to maintain a solid cash reserve. You can then deal with merchandise replenishment, pre-purchasing merchandise for upcoming higher selling seasons, and still handle the overhead during the annual ebbs and flows of sales and profits.
Always be conservative.
While we all appreciate the upbeat outlook of the eternal optimist, managing the finances of a business isn’t the right time to become overly optimist in your projections. Plan carefully. Don’t allow yourself to make assumptions about sales upsides or underestimated costs. Your business is at risk whenever you do. Be conservative, and then drive hard to achieve results that outshine expectations.
Manage debt carefully.
Add to your debt load with caution! Those opening a dollar store must carefully consider whether adding any business debt is the right move. There are many instances where adding debt to cover adding the newest tools and equipment might seem to make sense. Yet in business nothing makes sense if it means you are over-extended and don’t have the profits to cover the debt load.
Keep control over every cent you spend.
Be rigid in maintaining controls over all expenditures when starting a dollar store. Know your sales and profits. Keep firm control of all business related spending. Don’t allow any of your expenditures to get out of control. If sales drop adjust replenishment merchandise spending to instantly drop into alignment. Keep spending aligned to actual sales and profits.
To your success when starting a dollar store!
Post time: 09-18-2017